South African Reserve Bank Sees Potential For Real Bitcoin Growth

South African Reserve Bank Sees Potential For Real Bitcoin Growth

Bitcoinist_Bitcoin Growth

It is always good to know how several banks around the world feel about Bitcoin, even though the outcome will be identical in most cases. The South African Reserve Bank does not consider Bitcoin and cryptocurrency legal tender, although that doesn’t make usage of these currencies illegal.

Also read: Bitcoin Price Moves Forward: $457 and Rising

South African Reserve Bank Creates Bitcoin “Grey Area.”

Bitcoinist_Bitcoin Growth South African Reserve Bank

A recent whitepaper by the South African Reserve Bank explains how Bitcoin and cryptocurrencies are not deemed legal tender in the country. However, contrary to popular belief, this does not mean the usage of Bitcoin is illegal in South Africa, as it only means cryptocurrencies are not issued by a bank.

But that is not the most exciting part about this whitepaper, as the terminology used to define legal tender as tender creditors have to accept according to the law leaves wiggling room. This would, in theory, mean any vendor only willing to accept Bitcoin would be obligated by statute to accept fiat currency as well, given a consumer’s desire to use that form of legal tender.

Although that may not sound out of the ordinary per se, the whitepaper also states how there is “potential for real growth of Bitcoin in its current operational environment.” This seems to indicate the South African Reserve Bank has no negative feelings toward Bitcoin, as they merely seek to establish some ground rules and warn customers as to how it is issued.

What is of real interest is how the South African Reserve Bank defines taxation of Bitcoin:

“FinSurv would not be in a position to report on the “flow” of DCVCs [cryptocurrencies] because the transactions would not be reported on the FinSurv Reporting System. It follows that payments using DCVCs in respect of imports or the receipt of export proceeds would not be detected and as a consequence FinSurv would not be able to report thereon.”

There are two consequences to such a statement. First of all, there is no need to report foreign trade payments made in Bitcoin or digital currency, regardless of how large these amounts are. Secondly, cryptocurrency can be used for money transfers around the world, as long as the annual total does not exceed 4 million rand per person. Quite a lenient stance towards Bitcoin to say the least.

A mention regarding the VC landscape in South Africa is made as well, as the Reserve Bank says how they do not supervise or regulate these activities. Anyone is free to invest in Bitcoin and cryptocurrency, but there is no legal protection if a company or individual would steal someone’s funds.

What are your thoughts on the Bitcoin stance by the South African Reserve Bank? Let us know in the comments below!

Source: News24

Images courtesy of South African Reserve Bank, Shutterstock

Jp Buntinx

Jp Buntinx

JP Buntinx is a freelance Bitcoin writer and Bitcoin journalist for various digital currency news outlets around the world. In other notes, Jean-Pierre is an active member of the Belgian Bitcoin Association, and occasionally attends various Bitcoin Meetups in Ghent and Brussels

  • The white paper was released a year or two ago….dont think anything has changed since then.

  • Donald Madzinga

    They don’t seem to have an idea about what to do about Bitcoin here in SA but at least they Haven’t brushed it off as something of no value or discouraged the public from exploring and using Bitcoin.

  • Donald Madzinga

    I wonder if the government or reserve bank has bought some bitcoin or are mining it, I just wonder.