Why South Africa wants to regulate cryptocurrencies

 

Why South Africa wants to regulate cryptocurrencies

 

 

South Africa has been on the rise as a financial market participant in the last decade. The growth of their economy, alongside the private equity indicator and their great financial knowledge is a proof that South Africa’s quality of life is moving upwards towards improvement.

However, it was a shock to everybody in the world, after the survey was conducted to find out which country has the most literacy. Results from the survey showed that in terms of literacy, South Africa may not be #1 in the list, though it happens to be the country with the largest possession of cryptocurrencies among its internet users by comparison.

Such a revelation has a very big impact on how the local government looks at cryptocurrencies as a whole. Thanks to technology’s feature of being anonymous, It was really very hard to determine the exact scale of the industry inside South Africa. The opportunities it brings, the market size as well as several problems for the local authority.

Loss of control over SA’s gambling market

The fear of loosing their local gambling market has put South African local Government into panic. South African government devotes quite a lot of time and attention to their local gambling market. The country has been doing relatively fine when it comes to keeping the industry under control, right from the time 1996 Gambling Act was enacted.

This was all accredited to the payment methods that could be tracked, and also the compulsory license that online operators mandated to apply for. Recently, seeing how cryptocurrencies are slowly gaining dominance of the online gambling market, SA’s government is so afraid of the loss of control over their local market.

According to experts from play.casino, Now the foreign gambling operators have the capability to cater for SA’s gambling population without applying for the mandatory license. According to experts from play.casino.

In fact, with cryptocurrency payment platforms they don’t even need to market it on SA exclusive platform, all they actually need to do is provide a cryptocurrency payment platform where the players would be able to access it without any issues and as well as make transfers without the government or anyone else ever getting the information because of the anonymous nature of crypto transactions.

SA is experiencing loss of local capital, customer base and almost no revenue from licenses and taxes which is definitely not beneficial for SA. But then, it will be difficult for the introduction of crippling regulations because of the potential massive influx of crypto companies within the country .

Potential for additional tax income

No government in this world that would refuse a new source of income, and South Africa is not an exception in any good move to financial stability.
Despite having their regulatory framework which allows the collection of taxes from the companies located within the country, but still very difficult when it comes to the collection of taxes on profits from crypto trading.

If companies are forced to disclose information about their customers’ trading and transaction activities including very tight regulations then it is pretty much sure that the volume will go down.

There are so many crypto exchanges that operate internationally which does not need to conform to such rules unless if they are directly confronted by local authorities.
SA crypto market is going to face a very strict and tight regulations. Its going to affect most of the new companies that are considering coming there to operate as they are changing directions due to this conditions. This will also definitely affect the trade volume with local operators as the volume will actually come down.

As a matter of fact, the South African government would be shooting itself in the foot as well , as this move becomes counter productive.

 

 

 

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Credit: – Byo24News, Techeconomy.

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