An overview of the regulatory developments in South Africa regarding the use of cryptocurrencies
Authors Eveshnie Reddy & Vivienne Lawack
Affiliations: Lecturer, University of South Africa, BCrim BCrim Hons (UKZN) (UNISA) PhD candidate (UWC). This article forms part of research undertaken towards the author’s PhD study; Professor, University of the Western Cape, BJuris LLB LLM (NMMU) LLD (UNISA).
Source: South African Mercantile Law Journal, Volume 31 Issue 1, 2019, p. 1 – 28
This article provides an overview of some of the key regulatory developments in South Africa regarding the use of cryptocurrencies. Developments have to date been limited to government-issued notices warning the public of the risks associated with the use of cryptocurrencies, the legal status of cryptocurrencies within the wider paradigm of money, and a recent notice by the South African Revenue Services (‘SARS’) regarding the taxation of cryptocurrencies. A recent consultation paper published by the South African Reserve Bank (‘SARB’) proposed a three-phase regulatory approach to cryptocurrencies, starting with the licensing and registration of all cryptocurrency service providers. Albeit an incremental step in the right direction, this article argues that the regulatory developments have thus far been segmented and do not address the issues emerging from the use of cryptocurrency such as consumer protection, and reparation for loss and fraud. This article argues that although cryptocurrencies are not a widespread medium of exchange, their use in South Africa is gaining traction and calls for some level of regulatory oversight.