By Hlengiwe Ndlovu | 2018-05-27
MANY locals have lost millions of Emalangeni in cryptocurrency related scams.
However, it seems like there is no stopping this phenomenon as one of the first highly publicised cryptocurrency ATMs began functioning in Johannesburg three days ago.
Several South African publications reported that this ATM allows users to use Bitcoin, Ethereum and Litecoin with cash.
Business Insider reported that the ATM which was installed at a Spar outlet does not allow cash withdrawals.
Cryptocurrencies are not regulated by governments anywhere in the world, neither do Central Banks have control over their activities.
Whilst admittedly taking the world by storm, they are still viewed with skepticism and caution by many jurisdictions especially with lingering vulture scams which operate in the digital space.
South Africa is one of a few countries to have taken brazen steps in the cryptocurrency space as the South African Revenue Services (SARS) announced this year that it would now tax all gains made from digital currencies.
“Part of our definition of cryptocurrencies is that they are intangible assets meaning gains and losses made from them must be declared in the filing of tax returns,” SARS Legal Counsel Senior Manager said in an interview on SABC 2’s Morning Live show recently.
Even though Business Insider had reported that the Johanesburg cryptocurrency ATM was the first of its kind in South Africa, My Broadband disputed this claim by arguing that other similar ATMs had been installed prior to the Johannesburg one.
“While this is undoubtedly a forward-looking move, it is most certainly not the first cryptocurrency ATM to go live in South Africa,” My Broadband argued, adding: “My Broadband spoke to Bitmart CEO Jacques Serfontein, who confirmed there are multiple cryptocurrency ATMs live in South Africa – including a Douro cryptocurrency ATM at the retailer’s physical store in Nelspruit.”
Bitmart’s ATM was reportedly installed in September last year and supports multiple cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Dash, and ZCash.
Standard Bank Chief Executive Mvuselelo Fakudze twice sent warning messages on cryptocurrencies this year.
In a breakfast meeting with members of the editor’s forum, Fakudze advised that the best way to invest money was through traditional, time honoured institutions like banks, the property market etc as opposed to the digital phenomenon. He also warned that with cryptocurrencies being barely understood in many jurisdictions, it is not wise for people to invest in them especially because they remain unregulated by central banks.
In the meantime, African Tax Administration Forum (ATAF) Manager Resource Mobilisation told delegates attending a media training on African Tax matters in Johannesburg earlier this year that his organisation is currently not engaged in any work related to this phenomenon.
He admitted that in some jurisdictions, cryptocurrencies operate at par with national currencies, a development which calls for regulation.
“Many countries are still trying to figure out how to deal with cryptocurrencies. Frankly speaking ATAF has not yet done work on cryptocurrencies as our work is driven by our member countries’ needs,” he said further suggesting that a lot of work still needs to done to put in place national legislations which will regulate this new phenomenon.
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