Crypto Regulations Coming To South Africa in 2022

After two pretty large crypto-based Ponzi schemes blew up in South Africa, Mirror Trading International, and AfriCrypt. This hasn't stopped the proliferation of bitcoin scams in the country with a few minor operations still on the go.

The South African government has used these unfortunate events to push for greater oversight into bitcoin and cryptocurrency. The new regulation is done under the guise of consumer protection, but it's really all about funneling new avenues for taxable income, which I understand.

If you are going to move into Rands and use their payment rails, you should pay the fee for their shitty system, that's simply the choice, and if consumers want to make that choice be my guest.

Adoption is growing in SA

The obvious failure of the rand is pushing South Africans to consider alternative means of investing, some are taking the bitcoin path the vast majority are taking the shitcoin path, as their goal is still to get more rands, a goal that has diminishing returns but they've yet to find that out.

The growth in the need for bitcoin has seen the market expand and South Africa now has 10 exchanges where you can trade South African Rands for Bitcoin as well as a sprinkling of Bitcoin ATMs by Anker finding their way into local malls and shopping centers.

South African stable coins

In the last year, we've also seen two local companies launch a South African rand backed stable coin, one called ZARP and one called xZAR, both pointless shitcoins that are still yielding negative returns even with an interest of 11% but again be my guest if you think its a good bet for you.

These stable coins are part of a growing digital ecosystem with South Africa also investigating a digital currency in the form of a CBDCs so they can better control the population, of which a large part are welfare recipients.

Regulation can be a trojan horse

People often applaud regulation, as if these regulators have any real say in the adoption or the improvement of the technology. Regulation is fiat thinking, that you need some kind of approval from a central entity and I couldn't care less about what they have to say, even if it's a positive outcome.

I think positive regulation is bad for bitcoin, as it lulls people into a false sense of confidence. If banks and centralized entities can hold bitcoin on behalf of customers, it opens up the realm for rehypothecation as self custody isn't there to pressure these institutions to be fully solvent.

Still operating in the dark

At the moment we don't know exactly what will happen with the regulation, will bitcoin and crypto be treated separately, what will the tax and privacy implications be like, and how it affects you as an individual.

I'd say for most shitcoiners it could be a problem since they love transacting between stable coins creating taxable events that could now be pursued after better regulation is put in place. South Africa has also tried to limit banking services to overseas exchanges forcing customers to local businesses which is why we see so many local exchanges now.

As for bitcoiners, I would say if you're a stacker, it would be best to consider consolidating your funds into the lightning network or liquid network and use coinjoin services to break the KYC on your UXTO set and ensure your holdings remain private.

Sure they can track how much you purchased and when you purchased and what it could be worth but when you're holding your own keys in wallets no one can assign to you, there's pretty much nothing they can do.

Source:

• businesstech.co.za

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