The South African Reserve Bank (SARB)

The South African Reserve Bank (SARB)

• New Digital currency regulations will be adopted at some point during the first half of 2020.
• Several banks are likely to begin clamping down on cryptocurrency exchanges and companies relevant to cryptocurrency.
• New regulations are likely to implement to prevent users from evading currency controls.

The South African Reserve Bank (SARB) — the central bank of the nation — is expected to impose new rules on the use of digital currencies to prevent users from evading currency controls.

Cryptocurrencies have proved popular in South Africa, with 10.7 percent of the country’s citizens owning crypto, the highest in any surveyed region. The instability of the South African rand, which is one of the most unstable currencies in the world, caused customers to search for money security.

Cross-border payments are a contributing factor in the country’s crypto popularity, particularly given that remittances are often sent to 15 other countries on the continent from countries like South Africa in what is known as the Southern African Development Community.

Most South African crypto exchange Luno saw an average daily trading volume of more than 80 million South African rand ($5.4 million) in August. Luno saw a significant increase in new users, hitting on its website a landmark of three million wallets spanning 40 countries.

Marius Reitz, Africa’s general manager at Luno, said this suggests increasing global acceptance and strengthens the company’s goal of “reimagining a financial system where cash is cheaper, faster and safer with transparent and equal access for all.”

Recent 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. It is only understandable, after all, given the policy mentioned above, that crypto actively used to send money outside the country.

The regulations will be adopted at some point during the first half of 2020, according to the SARB. How the SARB will be able to monitor cryptocurrency sent out of the country is currently uncertain. Still, they may try to limit the amount of rand that can be exchanged for cryptocurrency. So far, it seems that the South African cryptocurrency and blockchain group has not accepted the news. Nonetheless, a representative said conservative financial policies, such as enforcing currency controls, were bound to deter entrepreneurship while hindering the country’s international investment.

Unfortunately, it seems that the situation is only getting worse for South African crypto users. Recent reports also suggest that several banks are likely to begin clamping down on cryptocurrency exchanges and companies relevant to cryptocurrency. For example, the First National Bank has stated that after careful analysis of its current risk appetite, they will no longer serve and collaborate with the nation’s largest digital currency exchange.