South Africa's cross-border crypto ban proposal sparks backlash
South Africa's cross-border crypto ban proposal sparks backlash
Individuals can still transfer crypto abroad under personal allowances – up to 2 million rand (~$120,000) annually without pre-clearance and up to 10 million rand with tax authority clearance. Everyday cross-border remittances are capped at 5,000 rand.
Absa, one of South Africa's largest commercial banks, sees the rules as long-awaited, with Rob Downes, who heads up digital assets at the lender's corporate banking division, saying bringing crypto platforms under exchange control rules creates clear rules.
Still, he acknowledged that the proposed ban on corporate cross-border stablecoin transactions would "naturally limit immediate opportunities" but said the proposal was intended as a phased rollout that could open up corporate stablecoin transfers down the line.
Public comment on the draft rules closes at the end of September.
The View From Nigeria
On July 31, Nigeria ordered all digital asset traders and exchanges to register for a tax identification number or face fines and a possible prison term, cracking down on tax evasion in its growing cryptocurrency market.
Under new guidelines published by the Nigerian Revenue Service, profits from trading cryptocurrencies, stablecoins, and digital tokens will attract income tax. According to Chainalysis, Nigeria received about $59 billion in crypto-asset inflows between July 2023 and June 2024, ranking second globally on its 2024 Global Crypto Adoption Index.
The policy is part of a broader Abuja drive to raise tax collections from about 13% of GDP to 18% by 2030.
Tiisetso's view
South Africa is building barricades against a global tide of digital dollars. Banning corporate cross-border stablecoins shields Pretoria's currency controls at the direct expense of corporate productivity.
For one thing, it forces businesses to rely on slow, expensive bank processes. That smacks of an unwritten tax on trade, widening the competitiveness gap between local firms and global peers. South Africa cannot defend its standing as Africa's preeminent financial gateway by locking its companies out of 21st-century payment systems.
Room for Disagreement
South African Reserve Bank Governor Lesetja Kganyago said exempting crypto from capital controls would create an unfair distortion. "The fact of the matter is that South Africa has a system of capital flow measures," he told the central bank shareholders at the annual meeting last week. "But, if we have these rules, we cannot simultaneously have weak regulatory frameworks for crypto assets alongside a rigorous system of reporting and permissions for everyone else. That is not a level playing field. What we are trying to do is get common rules here for everyone."
This article has been published in "Yahoo.com" via Yahoo News.
South Africa's cross-border crypto ban proposal sparks backlash
Pretoria’s attempt to pull borderless digital tokens into legacy exchange control risks isolating businesses and driving volume offshore.
finance.yahoo.com
