Central banks of many countries with considerable Bitcoin usage are in the process of drafting cryptocurrency regulations. The South African Reserve Bank is one among them. According to recent reports, the country’s central bank has decided to go ahead and test these regulations before making them permanent.
The trial of a number of new regulations is expected to start in the next few months. A report on one of the South African business magazines states that the government is working closely with some of the players in the country’s cryptocurrency and blockchain ecosystem to come up with legislation to govern the usage of cryptocurrencies in the country. The report states Loerien Gamaroff, the CEO of Bankymoon — a blockchain solutions provider saying that their company is in talks with the central bank to implement the new regulations in a sandbox -mode.
In other words, Bankymoon will try to implement and follow the new regulations on a trial basis and offer feedback to the government about its effectiveness and suggest improvements if any is required. The company’s relationship with the South African Reserve Bank is not new as Bankymoon has already conducted workshops and seminars on cryptocurrencies, its usage and the importance of blockchain technology on many occasions.During the course of which, it has maintained contact with the country’s central bank.
Gamaroff, mentioning the new regulations and his company’s role in the trials said,
“All we are doing at this point is seeing how far this relationship will go on with this sandbox… This is because the Reserve Bank is very hesitant to give a stamp of approval on anything that comes out. The sandbox will only be Bitcoin-focused during this initial phase, but is focused on applying broad regulations to all cryptocurrencies.”
South Africa and other nations in the African continent have a significant cryptocurrency penetration. Many alternative financial services are currently using Bitcoin and other altcoins to bridge the gap left by the traditional financial service providers. The growth of cryptocurrency usage without proper oversight could lead to a rise in frauds and scams, causing massive losses to individuals.
The South African Reserve Bank seems to be handling the situation in the right way, by testing the regulations before implementing it. It will not only make sure the rules are beneficial to the end user but also ensures that legitimate businesses stay unaffected.
Ref: BusinessTech | Image: NewsBTC