South Africa Appoints Working Group to Study Cryptocurrency

The South African government has established a dedicated regulatory working group to access cryptocurrency and Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term concepts, as per a report of the local news outlet Business Live.

The country’s finance minister Tito Mboweni revealed that the working group includes representatives from the Financial Intelligence Centre, Financial Sector Conduct Authority, Treasury, the Reserve Bank, and the SA Revenue Service (Sars).

According to Mboweni, the working group was formed to develop a cohesive response to the booming cryptocurrency industry in the country, and also to create a unified intergovernmental framework.

“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,” Mboweni stated.

Transparent Tax Laws

The South African government is also concerned about tax evasion by crypto traders. Mboweni stated that the country’s Revenue Service would add cryptocurrency in tax forms from next year.

“However, work is underway within Sars to consider the amendment of the tax forms for the 2019 tax season in order to cater for the description of other assets (which will include Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term) by means of a specific description field on the form,” he added. “Taxpayers who have made some form of declarations regarding cryptocurrency trades have captured such trade as a form of ‘other trade income’ or ‘other trade loss’, and have made reference to a description of digital/cryptocurrency trading (e.g. Bitcoin Cash, Litecoin (LTC), Ethereum (ETH), Zcash (ZEC) to name a few).”

Last year South Africa introduced the Taxation Laws Amendment Bill of 2018 which included the treatment of cryptocurrencies for income tax and VAT purposes. The proposed amendments will ensure that losses on cryptocurrencies may only be offset against profits.

The finance minister further clarified that cryptocurrencies cannot be classified as a personal asset for capital gains tax purposes and would treat cryptocurrencies as financial services for VAT purposes.

Crypto in Africa

Cryptocurrencies are getting very popular in the African countries including South Africa. Last year, African Bitcoin exchange Paxful reported $40 million in monthly trading volumes, a massive number when considering the technology penetration in the continent.

Ray Youssef, Paxful’s CEO, recently stated: “The adoption of Bitcoin across the globe re-affirms our belief that crypto will take its place as a mainstream financial system. As has been the case with other tech innovations, Africa is leading the peer-to-peer financial revolution. Our aim is to continue to partner with consumers to expand access to the global financial system,”