Bitcoin-linked businesses in South Africa are criticizing the government for its slow approach towards implementing clear and amenable regulation for the industry. The firms are threatening to orchestrate a mass exodus if things remain the same, according to a Bloomberg report on March 9, 2021.
Regulatory Uncertainties Stifling Growth
Just like Nigeria, the most populous black nation in the world, South Africa has an active crypto trading ecosystem. However, regulatory uncertainties and draconian government policies are threatening to bring the industry to its knees.
In the latest development, some South African businesses have made it clear that they are fed up with the government’s lackadaisical attitude towards formulating clear-cut and friendly laws to govern the nation’s cryptocurrency industry, a situation that is now threatening to trigger a mass exodus of these firms to better jurisdictions.
Per sources close to the matter, Revix, a South Africa-based cryptocurrency investment startup has described the regulatory approach of South African regulators as “incredibly slow” and the firm is now looking to move abroad.
Africa Lagging Behind in Crypto Innovation
Commenting on the unfortunate situation, Sean Sanders, CEO of Revix has made it clear that the current regulatory dark clouds in the South African crypto industry make it very difficult for legitimate businesses to flourish, as banking partners are hard to get and customers patronize them with much skepticism.
In his words:
“South Africa seems to go in the opposite direction of some of the more developed market pioneers and innovators in this space. For regulators to apply nearly obsolete securities regulations to the novel crypto asset class seems quite lazy.”
Financial authorities in some parts of Africa have barred banks from servicing crypto-related businesses and this has made it almost impossible for people to buy bitcoin (BTC) and altcoins with their local fiat currencies on centralized exchanges, leaving them with no other option than peer-to-peer (P2P) channels.
As reported by BTCManager in February 2021, the Central Bank of Nigeria released a circular, reminding financial institutions and crypto enthusiasts that transacting in cryptocurrency is illegal and as such, offenders may face strict punishments.
At press time, the price of bitcoin (BTC) is hovering around $54, 102, with a market capitalization of $1.01 trillion, as seen on CoinMarketCap.