Kuben Naidoo, the deputy governor of the South African Reserve Bank (SARB), stated recently during a webinar that the government of the nation is prepared to create a clear regulatory framework that includes provisions to assist crypto innovations in the nation.
According to Mr. Naidoo, a new law could be adopted within the next 18 months. This new law will treat cryptocurrencies as a financial asset rather than a payment method, allowing them to be used in the mainstream economy.
“Since you can’t just walk into a store and use it to make a purchase, we have no intention of regulating it as cash. Our perspective has since shifted to include regulating cryptocurrencies as financial assets. It needs to be regulated and integrated into society,” the deputy governor said.
The deputy governor made a subliminal point about the need to outlaw the hype-driven aspect of cryptocurrency ventures, which is a common tactic used to advertise crypto assets. Better regulations, according to him, should be in place to strike a balance between marketing hype and the requirements for investor safety.
The Deputy Governor’s remarks during the webinar indicated that although there will be an opportunity for the usage of cryptocurrencies in payment systems, they will not be considered legal cash.
Naidoo also pointed out that some specific cryptocurrency projects have made some significant technological advancements that might be enhanced and integrated into the payment system.
Despite being outlawed by the Nigerian government, cryptocurrencies are widely used there, therefore the ban hardly has any impact.
The Nigerian cryptocurrency community has instead turned to peer-to-peer trade or doing business directly with one another.
According to Chainalysis, a few significant factors are causing adoption to rise in Kenya, Nigeria, and other developing nations.
Due to a lack of accessibility to centralized exchanges, it is said that Nigerians use peer-to-peer cryptocurrency exchanges as their primary entry point into cryptocurrencies. Additionally, Nigerians utilize cryptocurrencies to send and receive remittances, carry out business transactions, and safeguard their money against currency depreciation.
With the statistics, it would only be wise for the Central Bank of Nigeria to move for regulation rather than ban of cryptocurrencies by adopting it as a financial asset.
That way, users can still enjoy some of the benefits of carrying out transactions using crypto and the CBN as well as other African Central Bank can have some level of control and benefit from VATs on transactions.
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