The South African "brains trust" being the South African Reserve Bank (SARB) and the National Treasury have been thinking again which is always a worry for those of us in crypto. When the people creating the regulation money laws do not understand crypto which clearly they do not which is actually a very good thing in an around about way we still need to pay attention. I believe they make these absurd announcements to stay relevant and to justify the work they are doing.
Remember their crypto regulation proposal a good 5 or 6 months ago with those idiotic ideas that those leaving and entering the country had to declare their crypto portfolios? There was the threat that one would have to divulge their keys to their cold wallets and crypto investments which obviously received a strong public backlash not only locally, but worldwide.
Well the same brains trust has put out another proposal which again clearly highlights their lack of knowledge and brain power. One would love to be a fly on the wall in these meetings because we know for many in positions of power there are many weaknesses and education is a major factor so we have to work with what we have. Who can forget our appointed Minister of Finance who lasted all of two weeks and the reason why he was selected for this role in the first place. This Minister of Finance had done an accounting course on line and had not even finished this course, but was the only eligible one amongst the ruling party who may understand figures. I kid you not this is the state of how things are run and decided in this country and why things do not run as they should.
I am digressing again from the topic as what we have to put up with is actually unbelievable and sadly it is all true. The "brains trust" has been investigating cross border crypto transactions saying that all crypto transactions offshore need to be declared through authorized providers. The transactions which are then reported to the SARB financial investigative arm FinSurv which will then deny or approve those transaction. Again red tape slowing things down when companies are seeking transactions to be executed in a timely fashion and now they have to ask for permission to spend their own money. The difference here is they are buying crypto and not FOREX and could already have the crypto in their wallets so they already may have the currency required for the transaction. They are basically asking for permission to spend what they possible have already.
The payment limits have been kept to stay within the current foreign exchange control limits of R 2million which is about $122K for the single discretional allowance and R10 million being $610K for the foreign investment allowance. This would all be sent via a local exchange that is on the list of locally approved service providers.
The point that has received the backlash from all of this is businesses will be restricted from using stable coins for their transactions due to the cap on allowances. R10 million when buying product from overseas goes nowhere due to the weakness of the Rand. Ultimately this proposal means businesses have no alternative but to stick to the current system and that is using banks for their cross border transactions. This kind of tells you who is sitting in on these "brains trust" meetings and are protecting what we already know and their days of controlling FOREX are numbered.
What anyone with a brain and understanding of crypto will tell you is all they are doing is pushing the transactions off shore and there will be an avoidance of locally regulated service providers because they do not offer the services needed.
The banks controlling the FOREX is not business friendly and know of many stories where businesses have had to do illegal things to service their local clients needs. A close friend of mine ordered and paid for goods overseas for a large client and that client added another urgent order whilst he was waiting for that delivery. The bank refused any more FOREX until that order had been delivered which meant he would or could lose the second order so we had to become inventive and find another solution which was highly illegal, but worked. If there was a friendly crypto cross border payment system then it would have helped without this stupid FOREX limitation rule. This is holding businesses and the economy back all to keep the banks in control and nothing else.
The point that I took from all of this is if you are already off shore not tied to a local CUSP or regulated crypto service provider then you are already out of the loop. I would not know who the official licensed service providers even are as I have never used them. I guess getting into crypto early has more than the obvious advantages as this allows you to stay ahead of the regulatory wave that is following.
