South Africa, a nation with approximately 56 million people is taking a leap into the world of cryptocurrency as news has come from the South African Reserve Bank to trial a number of regulations to virtual cryptocurrencies. This is a massive shift to secure a regulatory framework for Bitcoin and cryptocurrencies alike.
It's about time that South Africa is picking up! It's known that, despite being an advanced economy, it's still been amongst the slowest ones to actually develop laws and regulation towards virtual currencies and Blockchain technology sooner.
What took so long, South Africa?
It turns out, Lorien Gamaroff, CEO of Bankymoon, a software and consulting firm that provides blockchain powered solutions and services was selected as the first business to trial the new regulations.
That's right. His company will be subject to SARB's regulations. Mr. Gamaroff had been conducting seminars with the SARB on potential use cases for cryptocurrency in the South African economy as well as having discussions on its regulatory standpoint. Gamaroff is also involved in government research into alternative currencies within South Africa. Such an initiative shows much potential for the growth and acceptance of cryptocurrencies. About time!
“All we are doing at this point is seeing how far this relationship will go on within this sandbox,” Gamaroff stated. “This is because the Reserve Bank is very hesitant to give a stamp of approval on anything that comes out. The sandbox will only be Bitcoin-focused during this initial phase, but is focused on applying broad regulations to all cryptocurrencies,” he said.
Gamaroff had mentioned that regulatory action is necessary and ultimately positive for cryptocurrency as it will be central to achieving acceptance and legitimacy for virtual currency use in South Africa. This comes from the stigma of those who engage in the trading of Cryptocurrencies as criminals or hackers partaking in illegal activity.
In February, SARB announced intentions to develop a NATIONAL VIRTUAL CURRENCY based on distributed ledger technology
Along with feasibility research on Cryptocurrencies and blockchain adoption in South Africa.
It seems like South Africa has finally begun taking its baby steps towards regulation. Michael Jordaan (not the basketball player), the former CEO of First National Bank had also stated his support recently regarding cryptocurrencies. Believing that it would rival fiat currencies.
Whether this is true will depend on the amount of recognition and research such cryptocurrencies receive. Though South Africa and other nations within the African continent have a significant cryptocurrency penetration. This is due to the fact that numerous alternative financial services currently use Bitcoin and altcoins to bridge the gap left by traditional financial service providers. Without proper oversight and usage of cryptocurrencies from its growth could lead to more crimes such as fraud and scams. But regulation is necessary and it's great to see SARB taking action and taking such steps forward.Bankymoon is pretty lucky to have been picked!