1. Big Interest in Africa for Bitcoins and its Siblings
What the Treasury found out in their investigation is that there is no doubt about the attraction that cryptocurrencies have on the people of Africa, and most especially for South Africans. More and more people are investing in them and the government realises that it is time to look into regulating within the country. In the meantime, people can buy these virtual devices through trading platforms, without any rules.
What the Ministry of Finance announced during the press conference, is that there are over two million investors, in South Africa, who have bought some of the cryptocurrencies that are available in the market. It stated that there are twelve big ones that have taken over most of the market, while the most powerful one, Bitcoin, is still leading in terms of valuation. This new interest has been growing for five years now, but has accelerated in the last twelve months.
2. Is there enough information for buyers?
The conclusion is clearly “no” as it believes that more than 50% of investors don’t really know what they are investing their money in, when it comes to Bitcoins and similar assets. Therefore, it increases the level of risk that they are in, simply because they do not understand the principles of how they work, and what they were created for.
This led them to another conclusion, which is that they will eventually have to create specific regulations for these types of assets. The Treasury made it clear that there are three ways they can act. The first would be to ban cryptocurrencies from the country. The second would be to stay in the status quo and see what comes next, within the country but also around the world. The last, but the most likely option would be to regulate. That means dealing with wallets (where cryptos are stored) and exchanges. However, their concern is that if they regulate, which they don’t want to do, the public will think they approve of these currencies.