Over the years, South Africa has shown a growing interest in the crypto market, with many individuals investing in the crypto industry. The concept of Crypto is not new to the world and developed strong roots in the African continent as well.
What do Regulators Say About Crypto?
South Africa is strongly collaborating with the United States in the fields of Health, education, and environment and the digital economy is not an exception. With time, the country gradually grew interest in cryptocurrency with a supportive regulatory environment. In addition, the confirmation from the South African Reserve Bank (SARB) has ensured that Crypto is not going to be banned or restricted in the country.
In the years 2021 and 2022, a combined effort of the Financial Sector Conduct Authority (FSCA) and SARB, developed a consultation paper to offer regulations associated with cryptocurrency. With around 6.04 Million crypto owners, South Africa also enjoys a vibrant community of entrepreneurs and blockchain developers.
In October 2022, the FSCA developed the crypto assets, named “a digital representation of value” economic product and subject to FSCA regulations. Under the regulations, every cryptocurrency provider needs to be authorized by the FAIS to operate the business and apply for such a license. It is also informed that existing service providers need to apply for the same before the end of 2023.
The process of examining and documenting the crypto assets in South Africa began in 2014. In a joint initiative of the National Treasury, the SARB, FSCA, the South African Revenue Service (SARS) and the Financial Intelligence Centre (FIC) granted a public statement alerting the public to the challenges of crypto assets. Furthermore, Digital assets are subject to taxation in the country and any gains from selling or buying cryptocurrencies are subject to tax. The SARS assumes cryptocurrency as an intangible asset for tax motives and requires the buyer or trader to declare crypto asset gains and losses to the government. The income between 1 ZAR to 216,200 ZAR will be taxed at 18% and up to 45% applied on the income of above 1,656,601 ZAR.
Where to Buy Crypto?
Apart from the rules and regulations, the Country also offers cryptocurrency exchanges and trading platforms, allowing users to buy, sell, and trade cryptocurrencies including Bitcoin, Ethereum, and Litecoin.
Some of the popular South African-based cryptocurrency exchanges are Altcoin Trader, Valr, and iCE3X. Individuals are allowed to buy, sell, and trade cryptocurrencies using ZAR. Creating an account of the respective exchange, and completing the verification and funding is a simple process to follow. In addition to this, South Africa also offers users a Bitcoin ATM to buy Bitcoin using websites like CoinATMRadar. Peer-to-peer marketplace including Hodl Hodl or Paxful also works well for Bitcoin purchase.
Conclusion
South Africa welcomed cryptocurrency and is all set to boost the economy using digital assets. Cryptocurrency is permitted and taxable in South Africa and can be purchased, sold, and traded from crypto exchanges.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
