South Africa’s slow regulation might hinder Bitcoin adoption

South African cryptocurrency firms are considering moving from the country if the government and local regulators cannot offer more clarity on regulation within the region.

Sean Sanders, the CEO of Revix – a local cryptocurrency firm, said to Bloomberg that the government in South Africa has been “incredibly slow” to offer any clarity regarding guidelines and restrictions in the cryptocurrency space. His response to the slow speed of the South African government is that it’s going to result in businesses heading to an international space instead of waiting it out to find out about regulations in the country.

He added that the country regulators seem to go against the grain of other regulators:

“South Africa seems to go in the opposite direction of some of the more developed market pioneers and innovators in this space. For regulators to apply hundred-year-old securities regulations to the novel cryptocurrency asset class seems lazy.”

Buying local cryptocurrency

Other cryptocurrency firms in South Africa also suggest that the financial institutions in the country seem unwilling to integrate banking services. According to Marius Reitz, the general manager of Bitcoin trading firm Luno, this makes it difficult to offer the trade and transaction of cryptocurrency in the country with the local currency. He suggested that the lack of service support from the banks will suffocate adoption in the country.

Adoption in the country has already been hindered by the potential for scammers and schemes trying to use cryptocurrency to solicit funds from vulnerable investors. Over the past few months, amid the bull rally in the market, the financial authority in the country has noted that there has been an increased number of scams in the market. The South African Financial Sector Conduct Authority warned investors to avoid being pressured to fall into investment as a result of FOMO or “going with the flow“.