One of the most pressing concerns of crypto enthusiasts and entrepreneurs is the stance that regulatory bodies will take towards the technology.
The crypto community is eager to receive clear guidance from regulators with regard to what they can and cannot do, especially with regard to crypto mining, ICOs, and taxation.
This lack of regulatory clarity has been cited as one of the key reasons that mainstream cryptocurrency adoption has been so slow to blossom. Most people want to obey the law, which can be difficult to do when it’s not clear what the law requires.
South Africa is set to flourish with new crypto investment due do its almost unprecedented clarity and openness in embracing crypto regulation. A recent Ecobank report found that most African nations lack such clear guidance. Avesta will make such concerns obsolete by forming legal partnerships around the globe.
South Africa’s Superb Crypto Regulation
In many African nations, people find themselves working in a legal “grey area,” where their activities are not explicitly illegal but have not been declared legal, either. This results from a lack of guidance concerning crypto regulation from institutions that are tasked with creating related laws.
In South Africa, however, the situation is more positive for those working with cryptocurrency. Guidance issued from important financial bodies like the South African Reserve Bank (SARB) has indicated a “hands-off” approach.
For example, the SARB does not recognize crypto as legal tender, meaning merchants can refuse payment in Bitcoin, Ethereum, or any other cryptocurrency. The SARB does, however, recognize crypto as a store of value.
This means that in South Africa, users are free to trade amongst themselves using crypto. It also means that proceeds from the sale of digital assets for fiat currency fall under the same tax laws as that of any other asset. But what about other African nations?
Ecobank Report Examines the State of African Crypto Regulation
A comprehensive analysis of crypto regulation in Africa was recently compiled courtesy of Ecobank. Published on August 1st, 2018, the 10-page report on African crypto regulation provides great insight into how Africa is treating this new technological innovation.
“ As in many other parts of the world, African governments and central banks are mostly adopting a ‘wait and see’ approach when it comes to regulating cryptocurrencies…
…To date there has been no discernible regional regulatory trend, whether favourable or unfavourable. Only one country, Namibia, has banned cryptocurrencies outright. In contrast, neighbouring South Africa and nearby Swaziland offer two of the most favourable regulatory stances in Africa. But with the exceptions of Cameroon, Rwanda and Senegal, no other Francophone government or central bank has made a policy statement on virtual currencies. “
The Ecobank report states that 21 out of 39 jurisdictions examined have yet to make firm decisions on crypto regulation within their borders. Three notable exceptions include
- Namibia, which has outright banned the use of digital currencies
- South Africa and Swaziland, which have adopted “a generally favourable and permissive stance.”
This unwillingness to issue firm guidelines is thought to result from African nations’ desire to learn from their neighbors. Instead of leading the way, it appears that Africa as a whole (except the three nations just mentioned) wants to wait and see what happens abroad before deciding on crypto regulation.
Avesta and a New Era of Crypto Regulation
Avesta aims to solve the problem of regulatory concerns by partnering with legal entities around the world. Avesta users will not only be able to interact with a platform that is much more intuitive and user-friendly to use, but they can rest easy knowing they are doing so without violating any vague laws or regulations.
While interacting with crypto and crypto-related businesses is relatively safe in South Africa, business and transactions associated with Avesta will be compliant with all relevant laws and regulations. The common concerns that plague the average crypto user or business today will cease to exist.