The South African Reserve Bank (Sarb) is apparently planning to introduce rules regarding the use of digital currencies, or cryptocurrencies, in a bid to stop them from being used to evade currency controls.

According to reports, Sarb deputy governor Kuben Naidoo told journalists last week that the rules would be put in place in the first quarter of next year. Naidoo was not immediately available to verify this, and other Sarb officials could not comment.

But local banks such as FNB have already started clamping down on virtual currency companies and last week closed all business banking accounts for companies dealing in cryptocurrencies.

“FNB considers this to be a prudent course of action following a comprehensive review of the potential risks currently associated with these entities, particularly given that appropriate regulatory frameworks are not yet in place,” it said in a statement.

South Africa has limits on how much money individuals can send outside the country. The limit without declaration is R1million, and with special application to the South African Revenue Service citizens can send a further R10m out of the country for foreign investment purposes.

This limits South Africans to a total of R11m that they are allowed to send across the border, and high-net-worth individuals looking to protect their wealth against the rand’s devaluation are looking to alternative methods to send their money offshore. This leaves cryptocurrency as the most popular method of sending money anywhere in the world due to the borderless nature of virtual currencies.

The news that the Sarb is planning to introduce such rules has sent shockwaves throughout the South African crypto asset and blockchain industry.

South Africa’s largest blockchain community, SA Crypto, said in a statement it had previously written to the Sarb urging the regulator to adopt progressive statutes when approaching crypto assets.

SA Crypto said conservative regulations would not only hinder innovation in South Africa, but also repel investment into the country.

“With a market cap of $210 billion (R3.07 trillion) in the cryptocurrency market alone, the industry is driving significant economic growth in countries adopting such progressive regulation, due to the investment many blockchain and crypto asset companies are attracting worldwide.”

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