Francois E. Groepe, deputy governor of the South African Reserve Bank (SARB), said that it does not consider digital coins securities or currencies. He suggested that SARB does not prefer to use the term “cryptocurrency.” The latest comments are in line with South African Revenue Service’s (SARS) April statement, which stated that the word “currency” is not a part of the country’s Income Tax Act.

Groepe said that the central banks prefer to call cryptocurrencies “cyber tokens” or just “tokens” as they are not legal tender and do not qualify as securities. In South Africa, digital currencies are not widely accepted, keeping the adoption rates low. SARS also doesn’t count these coins for income tax purposes or capital gains tax.

In an April statement, the agency said:

“In South Africa, the word currency is not defined in the Income Tax Act. Instead, cryptocurrencies are regarded by SARS as assets of an intangible nature. It has prescribed the inclusion of these assets in Gross income.”

While cryptocurrencies are fighting strong regulator pressures in different companies around the world, South Africa presents a regulatory vacuum, which remains conveniently oblivious of their use. In an economic sense, these coins do not fall under traditional requirements of “money,” as explained by Groepe. They are not stable means of exchange or a stable unit of value due to volatile prices. They can also not be used as a unit of measure.

He noted:

“There is a bit of a regulatory vacuum.”

As cryptos do not fall under any financial legislation of the country, the official policy for their use or taxation is still unclear. However, SARB is working with other regulators to review its 2014 position on digital coins. For now, the central bank suggests that investors are participating in their crypto markets at their own risk.

Meanwhile, an Intergovernmental Fintech Working Group (IFWG) is reviewing the country’s stance on digital assets. Established in 2016, the group is composed of SARB, the Financial Intelligence Center, National Treasury, and the Financial Sector Conduct Authority.

Cryptos Are Neither Currencies nor Securities, SARB Deputy Governor Says was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.

Similar to Notcoin - TapSwap on Solana Airdrops In 2024

origin »

257 +