South Africa is taking a path that some countries such as India and China have failed to follow. In South Africa, financial regulators are seeking to understand blockchain and crypto before issuing any directives or regulations to govern the same.
To quench their thirst on what blockchain and cryptocurrency really is, the country’s ministry of finance has set up a working group that will, among other things, concentrate on the regulatory aspect of crypto before the same can be passed as law.
According to BusinessDay, a local media outlet, the move is meant to provide a comprehensive outline of cryptocurrency regulations.
Tito Mboweni, South Africa’s finance minister, said that:
It is anticipated that, following broad industry comment and participation, the crypto assets regulatory working group will be ready to release a final research paper on the subject during the course of 2019.
As noted by Mboweni, the virtual currency regulatory working group will comprise members from the country’s revenue authority, the apex bank, the Financial Intelligence Centre, the Treasury, and the Financial Sector Conduct Authority.
Further, the minister noted that a lack of clear guidelines has caused the country’s revenue body, the South Africa Revenue Service (Sars), to inaccurately:
Trace the number of declarations pertaining to capital profits on cryptocurrencies as the existing income tax return forms do not make provision for taxpayers to specifically declare capital profits regarding cryptocurrency trades.
But, according to Tito, the missing sections on the tax return forms are set to be included on this year’s tax return forms. Currently, South Africa uses the same income tax guidelines on virtual currencies.
With such a move, do you think having an in-depth knowledge of blockchain and crypto before regulating the same will help ignite growth in the South African crypto market?
Let us know your thoughts in the comments section below.