South Africa is urging regulators to classify digital assets as onshore assets to boost industry growth. Currently, crypto exists in a regulatory gray area, unlike traditional assets such as local stocks and bonds (onshore) or foreign accounts and stocks (offshore).
Local laws cap offshore investments for retail investors at $54,500, with a higher limit of $545,000 requiring tax clearance. No such caps exist for onshore assets. Luno’s Africa GM, Marius Reitz, argues that this ambiguity deters institutional investors, while Luno’s legal head, Paul Harker, stresses, “Internationally, cryptocurrencies are now just another recognized asset class… Pro-growth and forward-looking decisions are essential.”
Transferring crypto from local platforms to international exchanges currently violates South Africa’s Exchange Control Regulation, risking fines or imprisonment.
This regulatory uncertainty has led to retail investors dominating 71% of digital asset activity, as per the Financial Sector Conduct Authority (FSCA).
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