Regulating cryptocurrency and other blockchain related markets would be a win-win for government and the emerging industry, blockchain mogul Tumelo Ramaphosa says.
As the CEO of the world’s first wildlife-based cryptocurrency, StudEx Wildlife, Ramaphosa said he wanted to see more engagement between emerging currencies in the blockchain industry and government in order for the correct regulatory measures to be adopted in South Africa.
This was in response to a Business Day report yesterday saying that Minister of Finance Tito Mboweni was to begin researching the industry in order to come up with ways to regulate the largely under-the-radar world of trade in cryptocurrencies.
Government was expected to produce a research paper at the end of this year on its fact-finding mission.
In a parliamentary answer to Freedom Front Plus, Mboweni said this would be done in order to develop a cohesive governmental response to cryptocurrencies and a unified intergovernmental regulatory framework.
With more than eight years’ experience in the blockchain space culminating in the launch of StudEx last year, Ramaphosa said he has seen regulations working within the industry where he is based in San Francisco, California.
“We have worked a lot with the Securities Exchange Commission in the US. They are the regulators for currency exchanges and all of that and being in this space we work a lot with them.
“Being an investor and also an owner in this space, it is always very interesting to see what regulators are doing. In the States, cryptocurrency is being taxed now under capital gains tax laws which is very good. In our exchange, we have to pay tax and we have to register all our clients.
“We have our own customer checks and we have anti-money laundering checks so we regulate ourselves as well.”
Chankura Exchange, a crypto-currency exchange platform that lets its users earn money, trade, store, send and receive cryptocurrencies, conducts its own customer checks, such as anti-money laundering laws, as well as ‘know your customer’ checks, to comply with the Security Exchange’s commission, which regulates digital exchanges and financial markets, explains Ramaphosa.
In Mboweni’s parliamentary answer, he noted that the working group would include the Financial Intelligence Centre, Financial Sector Conduct Authority, Treasury, the Reserve Bank and the SA Revenue Service (Sars).
Ramaphosa said he hoped government would make a concerted effort to involve industry players as much as possible in this process, adding that he would like to see blockchain specialists and companies lead government to help them understand blockchain and cryptocurrencies.
“I want them to let us lead them in the technical aspects as well. We are the people to answer these questions.
“We do want to be regulated. We don’t want to be operating in this dark space and I think it will make it easier for us to grow our companies and there will be a higher adoption rate if there is more involvement from regulators.”