Last night I did a post on the new proposed crypto regulation for South Africa and it was a scary read. I have been trying to get my head around this and it cannot be done as none of it makes any sense. I have not been thinking in rands for many years now due to the local currency having no value and at all costs have been avoiding holding any significant amounts due to depreciation of the currency.
South Africa has strict capital outflows for it's citizens and these limits are far from practical. R2 million per person is the equivalent of $121.016.30 before you require a tax clearance and then with a tax clearance ie permission one can send another R10 million for foreign investments. The problem with all of this using the current institution set up via ban to bank transfers is you are letting the government tax man know you will be paying taxes on your foreign investments at some point in the future.
The government is desperate to keep these measures in place and the new crypto proposal blocking capital outflows is proof of that. This is just at the proposal stage and what is scary is that what is being considered is even a proposal. None of it makes any logical sense and one would have to be a fool to go and offer them suggestions as you are letting the authorities know you have crypto.
I have always been wary from day one what this government is capable of and what has been proposed is exactly what I would have expected. The less anyone knows about your crypto portfolio the better and why these things should be kept private.
I had to look up the value of 1 Bitcoin in South African rands which is R1 286 054. What I find hard to comprehend is firstly the crypto is already offshore or is in your possession via acold wallet. How is this affecting the capital outflow as who is going to cash their crypto in South Africa. This crypto portfolio value is not part of the local currency and is valued in Dollars. If your crypto is staked or on an exchange it is already outside the country and is for you to decide on what happens with it.
This capital outflow would according to the crypto proposal relate to the laws which would mean one could "send or take 1.55 Bitcoin with them overseas or send 7.75 Bitcoin. The problem is you are not sending it as you already have it so that example is a hard one to try and comprehend.
The other part of the proposal was about how much crypto you are allowed to hold which again makes no sense. If you had a million shares in a certain stock then why are you not being told to sell as you have too many shares as the government would like you to have less. This is what they are saying about crypto and there is no logic to this.
If you were lucky enough to own 100 Bitcoin how could anyone tell you to sell them because you have too many? The value changes continuously so according to their rationale if you were allowed x amount because that is the Rand value it represents and during the course of the week drops or rises by 20% then what happens?
My mind is saying this proposal is a worst case scenario and it will be changed once reviewed. If they try and implement what they have proposed they will end up with way less than they think because no one would be that stupid to hand over their keys which was also part of the proposal if you refuse to comply. My future does not lie here and will be leaving which looking at this nonsense cannot come soon enough as those people in charge are that ignorant. If this was an April Fools joke then it would not be believed as the entire concept is absurd and stupid with no logic if you know crypto.