SA Treasuries Cryptocurrency Misunderstanding Threatens Industry Growth
South Africa's National Treasury is trying to regulate cross-border crypto transactions by publishing a draft manual. The manual sets out rules for licensed crypto asset service providers (CASPs) and aims to strengthen oversight of cross-border financial activities. However, industry players argue that the regulations are based on a fundamental misunderstanding of blockchain technology.
David Porter, compliance director at AltCoinTrader, says that blockchains do not move assets across physical boundaries, but update a globally distributed ledger via cryptographic keys. He argues that treating crypto assets like banknotes will 'suffocate domestic innovation' and risks severely damaging South Africa's crypto industry.
Farzam Ehsani, CEO of VALR, warns that the current draft is prejudicial to crypto assets and licensed CASPs, and would be better served by abolishing exchange controls altogether. He adds that if South Africa chooses to retain capital controls, they should apply them in a technology-neutral way.