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Central Bank Of South Africa Will Now Create A Self-Regulatory Body To Control Cryptocurrency

Apr 07, 2018 Posted /  507 Views

Central Bank Of South Africa Will Now Create A Self-Regulatory Body To Control Cryptocurrency

Central Bank Of South Africa Will Now Create A Self-Regulatory Body To Control Cryptocurrency

South African Reserve Bank will set up a self-regulatory association to regulate cryptocurrencies and fintech advancements.

The SARB as of now does not direct or control digital currencies, but in the light of a legitimate concern for guaranteeing investor protection and avoiding risks, it has selected to build up an investigative unit for administering improvements in the industry.

Central bank’s director of banking practice, Bridget King said:
“Regulating cryptocurrencies prematurely could have the negative consequence of throttling the growth and innovation of the industry. In addition, if laws are drafted based on existing technology, which is still in its growth phase, there is a risk that the technology may have moved so much by the time the legislation is enacted, that the legislation is obsolete or requires updating almost immediately to align with the latest technology."

Project Khoka, the investigative unit will start by looking at the utilization of DLT (Distributed Ledger Technology) as a strategy for handling secure electronic payments. For that reason, the bank is propelling a proof of concept (PoC) to recreate interbank clearing and settlement utilizing Quorum, a framework in light of Ethereum Blockchain.

SARB expressed:
“The aim of this project is to gain a practical understanding of DLTs through the development of a PoC in collaboration with the banking industry. The objective of the POC is to replicate interbank clearing and settlement on a DLT which will allow the SARB and industry to jointly assess the potential benefits and risks of DLTs.”

Last year, the South African Revenue Services (SARS) reported it would investigate strategies for tracing crypto exchanges in order to prosecute tax evasion.

This year in January, the SARB reported that a fin-tech team will survey the bank's position toward private digital currencies and address administrative issues, including clearing and settlement dangers, fiscal approach, financial stability and trades control suggestions.

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Tags: Central Bank Of South Africa Self-Regulatory Body bitcoin cryptocurrency Cryptocurrency Regulation Cryptocurrency Regulation South Africa blockchain

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