SARB defines cryptocurrencies as tokens, not money

Jamie McKane

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SARB defines cryptocurrencies as tokens, not money

South Africa’s central bank chooses to call digital currencies such as Bitcoin “cyber-tokens” because they don’t meet the requirements to be classified as money.

“We don’t use the term ‘cryptocurrency’ because it doesn’t meet the requirements of money in the economic sense of the stable means of exchange, a unit of measure and a stable unit of value,” Reserve Bank Deputy Governor Francois Groepe told reporters in Pretoria on Thursday.

[Bloomberg]
 

lucifir

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SARB defines cryptocurrencies as tokens, not money

South Africa’s central bank chooses to call digital currencies such as Bitcoin “cyber-tokens” because they don’t meet the requirements to be classified as money.

“We don’t use the term ‘cryptocurrency’ because it doesn’t meet the requirements of money in the economic sense of the stable means of exchange, a unit of measure and a stable unit of value,” Reserve Bank Deputy Governor Francois Groepe told reporters in Pretoria on Thursday.

[Bloomberg]

And the rand is a stable 'unit of value' :crylaugh:
 

garp

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Fine. Then why does SARB want foreign exchange reporting on offshore crypto transactions? It's either a currency or not - you can't say it isn't a currency and then try and impose foreign exchange controls on it. If it's not a currency, it's none of their business.

I know full well that if you send ZAR offshore to buy crypto on a foreign exchange (or do anything really) that obviously triggers a reporting requirement, but in recent communications they're also implying that you need to report sending crypto out. Which is dubious if they're also claiming it's not a currency, just a token.

If they're ultimately going to insist on treating crypto with the same rules they do currency, then SARS and SARB need to duke it out - because there is no tax implication on gains in foreign currency for private individuals. They can't have their cake and eat it.

What is becoming clear is that contrary to SARS assertions that all normal tax rules apply, cryptocurrency doesn't fit neatly into any of their paradigms. Some other countries have eventually arrived at this conclusion and have separate treatment for cryptocurrency. In the long run, I think it's all academic. They can throw whatever regulation they want at it, and initially it will work as people are conditioned to government intervention. But with time, as parallel crypto-economies develop along with increasingly private and anonymous crypto systems, it will become apparent that they actually have no control over it nor the ability to help themselves to people's bank accounts.
 
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