South African Reserve Bank Crypto Asset Friendly, but Bitcoin Is Not Money

The South African Reserve Bank (SARB) shared a discussion paper titled “Consultation Paper on Policy Proposals for Crypto Assets,” which comprises promising references and rules for crypto assets and firms using those assets in the country. Though, the bank has no plans to consider Bitcoin or other cryptos as a currency.

The Reserve Bank as well as the South African Government have maintained an open approach towards the crypto-blockchain industry. Regulations have been tested in a “sandbox environment since 2017.

This latest paper is an effort to bring more clarity to the Reserve Bank’s stance on cryptocurrencies in the African country. So far, the Reserve Bank has maintained a positive approach towards the crypto and blockchain industry. The rules, however, suggest the South African government to act with caution.

An interesting point in the Consultation Paper is that SARB does not have any plans to the attribute Bitcoin and other cryptos as “currencies.” In fact, they have christened them as “crypto assets.” In countries like the US, Bitcoin and Ether square are categorized as commodities” rather than foreign currency.

The SARB conjointly recommends that all crypto-related businesses should be registered with the Financial Intelligence Centre. SARB has aforesaid that it’s willing to amend legislation as the crypto space is evolving rather than wait for it to develop completely.

One significant point in the paper is that SARB won’t consider as “major” assets until the industry becomes around $1 trillion industry.

The overall approach of the paper is quite forward-thinking in terms of how it has dealt with the crypto-blockchain space. 

If other G20 nations also follow suit, it would give a great boost to crypto adoption in the continent.