South Africa’s central Bank, called South African Reserve Bank (SARB), is expected to enforce new rules on the use of digital currencies to prevent users from evading currency control measures.
Recent times have shown a tremendous growth of Cryptocurrencies usage in South Africa, with records showing 10.7 percent of the country’s citizens owning crypto, the highest in any surveyed region which could be attributed to the volatility of the South African rand, which is one of the most unstable currencies in the world. Predictably, customers must have turned to cryptocurrency to provide security for their monies.
Most popular South African crypto exchange Luno saw an average daily trading volume of over 80 million South African rand ($5.4 million) in August but saw a surge in the number of user, hitting its website with a landmark of three million wallets spanning 40 countries which according to Africa’s general manager at Luno, Marius Reitz, suggested increasing global acceptance and a strengthening of the company’s goal of “reimagining a financial system where cash is cheaper, faster and safer with transparent and equal access for all.”
Across-border transactions are also worth considering in the country’s crypto popularity, especially since countries like South Africa with their Southern African Development Community, send remittances to 15 other countries on the continent.
On this note, unverified reports indicate that the South African Reserve Bank (SARB) will soon introduce a cryptocurrency-related regulation aimed at stopping the use of digital currencies to control their currency.
Reacting to the situation, a representative of the South African Cyptocurrency and Blockchain Technology community says that enforcing such currency controls would not only deter entrepreneurship, but also hinder international business investments.
Banks are also likely to begin enforcing strict measures against cryptocurrency exchanges and companies relevant to cryptocurecy. The First National Bank, for instance, has stated that after careful analysis of its current risk appetite, will no longer serve and collaborate with the nation’s largest digital currency exchange. If fully enforced, these measures will spell doom for the South African cryptospace.