SHOULD REGULATION BE WELCOMED?
Personal Finance|August 2022
What do upcoming cryptocurrency regulations mean for your investment?
JUSTIN ASHER
SHOULD REGULATION BE WELCOMED?

IT WAS inevitable that, at some point, the South African authorities would start regulating cryptocurrencies. While the South African Revenue Service (SARS) has long treated earnings from cryptocurrencies as income tax, the government has made it clear that it believes more interventions are needed.

In its 2022 Budget Review, it proposed regulatory bodies aimed at safeguarding crypto owners and the South African fiscus. In turn, these regulatory bodies will follow the interventions suggested by the Inter-governmental Fintech Working Group (IFWG) and treat crypto asset providers as accountable institutions, declare crypto assets as a financial product, and enhance the monitoring and reporting of crypto asset transactions.

There is, at this stage, no set date when these regulations need to be implemented, but it's intended that they're in place before the end of the year.

While the intent behind these regulations should undoubtedly be applauded, it's worth asking what they mean for ordinary investors.

Reducing risk

The first two of those moves should, at least, be welcomed by investors. By including crypto asset service providers as accountable institutions within the Financial Intelligence Centre Act 2001 (FICA), the government hopes to address concerns about crypto assets being used for money laundering and terror risk financing.

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