The development of cryptocurrencies, especially in countries like South Africa, has seen the question on their future posed to government ministers, with Finance Minister Malusi Gigaba tackling the question positively.
Currently, cryptocurrencies are not regulated in South Africa, but a number of private businesses operate within their sphere of influence and Gigaba has said that the government is in conversation with these businesses.
Gigaba was replying to an opposition party’s question on Bitcoin when asked what the government's position on the developing market for cryptocurrencies was, and whether he intended to regulate the market.
“As noted, the relevant authorities continue to monitor and assess the use of virtual currencies and consult with private sector stakeholders in this regard. Further guidance or regulations may be issued, should the need arise,” he said.
“While the above position still applies, the National Treasury together with the SARB, FIC and FSB have also established an Intergovernmental Fintech Working Group in December 2016, to develop an approach and potential revised policy stance towards fintech, including cryptocurrencies, and to deal with fast-emerging fintech matters in the financial sector, like crowdfunding, robo-advice, machine learning and alternate payment platforms.”
“A balanced approach is being taken, which is supportive of the objectives of enhanced innovation, competition and financial inclusion in the financial sector, while also reviewing risks related to financial customer protection, money laundering and financial stability.”
Similar to the Internet
Gigaba went on to state that fintech is still in its early stages and with that there is a lot of excitement and volatility, much like the Internet when it first started to take off.
Thus, the government is looking to find the balance in these turbulent times between innovation and protection of customers.
The finance minister sees the strongest of the digital currencies that withstand the early volatility of this boom co existing alongside fiat currency.
Of course, there has been a lot more excitement for governments and companies in the underlying Blockchain technology, as it has many applications, and is not a disruptive force like digital currency.
“The underlying Blockchain technology also has a lot of potential to be used for purposes other than creating cryptocurrency. Blockchain technology is a cheap, effective and increasingly safe way to do transactions as well as to transfer money from one person or institution to another.”