financemagnates - 12/3/2019 5:16:13 AM - GMT (+0 )
The South African Reserve Bank (SARB) is planning to bring new laws controlling the digital currencies to stop their usage to evade currency controls.
Reported by the Business Report on Monday, Kuben Naidoo, the deputy governor of the SARB, last week revealed that the new rules will be enforced in the first quarter of next year.
The upcoming rules will primarily put a restriction on the amount of South African rand can be allowed to send outside the country by both individuals and companies.Creating a closed economy?
Currently, the central bank allows the citizens of the country to send 1 million rands (around $68,200) across the border without any declaration while for foreign investment purposes, the limit is set to an additional 10 million rand (almost $681,800), but permission from the South African Revenue Service is needed for this.
Due to these restrictions, many are utilizing cryptocurrencies to transfers funds from South Africa to foreign countries.
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The announcement of the central bank had already created an environment of tension with the crypto businesses operating in the country and also the financial institutions in business with such companies.
First National Bank (FNB), a local bank in the country, had already closed all its ties with crypto businesses for which it was providing business banking accounts.
“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,” the bank said in a statement.
The crypto companies operating in the country are now in stress as AltCoinTrader, one of the clients of FNB stated: “We are disappointed that a financial institution would succumb to international pressure like this, with banking services being denied to individuals and industry players around the globe.”