Posted 2 years ago | by Ben Armstrong
New South African SARB Rules to Curb Cryptos' Role in Currency Control Crunch
South Africa’s central bank, SARB (The South African Reserve Bank) has a plan to introduce a new set of rules that will disable the use of cryptocurrencies to elude currency controls.
The rules that are reportedly to be put in place by the first quarter of 2020, that is according to Kuben Naidoo, who is the deputy governor at SARB. The said rules will enable the central bank to restrict just how much Rand can be sent outside the country.
South Africans are presently limited to sending a total of 11 million rand outside the country. Amounts in excess of 10 million rand require a special application sent to the South African Revenue Service and 1 million rand that does not require declaration.
Alarm Over the SARBs Move
South Africa’s blockchain community, SA crypto said that the central bank’s plan to enact restrictions is alarming and far fetching. They also added that conservative regulations would not only repel investment into the country but also hinder innovation.
South African local banks have not been left behind as well, seeing as just two weeks ago the First National Bank (FNB), after considering the risks said that it will seize serving major local cryptocurrency exchanges. This include LUNO, ICE3X and VALR.
Interest Rising in Cryptos
The plan to bring in new rules comes at a time when Africa’s interest in cryptocurrency has increased. Seeing as trading platforms such as peer-to-peer are boasting of adding on 800,000 wallets in the past year. This has been driven by growth in African countries such as Kenya, Nigeria and Ghana.
John Dantoni, a research analyst at The Block had recently mapped out the African blockchain ecosystem and found that across 11 different sub-categories there are 64 cryptocurrency and blockchain firms. This including wallets and exchanges.
Tired of Bad Policy
The move by the SARB is in-line with the the rising tide of economic controls that we have seen arise over the last few decades. As the global economy becomes evermore controlled, people will look for ways to maximize the value of their capital, and perhaps even break with local laws that govern the monetary system.
While many people may point to criminal activity as a form of this movement, in reality, it has also helped people in tyrannical dictatorships to survive (see Venezuela for more on this theme). It is easy to side with a government when it comes to laws and their enforcement, but in this world, those laws can be used by ill-meaning sociopaths to further their own mad dreams of power.