Although usually behind the global curve, South Africa seems to be keeping pace with the current Bitcoin trend. This is positive, as we are living in an increasingly digital world with it only being a matter of time before currency too, became digital.

The big question on everyone’s lips however, is twofold: How will cryptocurrency be taxed by the South African Revenue Service (SARS) and what will the exchange control standpoint of the South African Reserve Bank (SARB) be.

SARB has been the first of the two bodies to comment. Its view is that cryptocurrency does not fall within the ambit of their regulatory compliance. The Position Paper on Virtual Currencies 2014 is the last position paper issued by SARB on this topic and it has maintained that cryptocurrencies are Decentralised Convertible Virtual Currencies (DCVC’s) which are not regarded as legal tender.

This does not mean that simply moving money in and out of South Africa for Bitcoin trading will be permitted. Certain requirements will still apply. Those who do not comply are likely to fall foul of the Reserve Bank (not necessarily today, but the likelihood is high in years to come) and will find themselves paying penalty upon penalty.