In many developing countries, the black market exceeds the size of the "legitimate" economy by many multiples. Monero just codifies what people already do with a currency that's out of control of the local government (and presumably inflates less).
Except that the same currency used in the black market is also accepted by banks and grocery stores. In other words, the black market operates with legal tender, not an illegal one (i.e. BTC or MNR if either are made illegal)
Again, there does not seem to be any intrinsic difference between anonymous cryptos and non-anon if cryptos are generally illegal and not a valid tender
We have heard a lot of similar news out of other jurisdictions. And seeing how slow many lawmaking bodies respond to any stimuli at all, we will for the foreseeable future...
The point of crypto currency is to do the exact thing money laundering laws try to prevent: to transfer large sums of cash untraceably across the globe, with no way for the government to do anything about it.
Recently it's become a game of baseless investment, but anyone actually wanting to use crypto currencies as payment should've seen this coming from miles away.
It's not just money-laundering laws. It's also more general "financial repression", i.e. being forced to hold local currencies while the government inflates them and/or holds the interest rate down. The two tend to blur into each other, I guess.
Not entirely. Capital controls and currency bans are distinct from AML.
South Africa's proximate problem is capital controls. Cryptocurrencies make those controls easier to circumvent. If you look at the countries that are responding forcefully to crypto, it's the ones who want a sovereign monetary policy and relatively fixed exchange rate [1].
Exactly. 350+ million people get screwed when the government triples the money supply, but relatively few people use crypto to buy coke and that’s suddenly what it’s all about.
We have many examples throughout history where dumping large amounts (multiples) of money into an economy causes inflation. And to my knowledge, we have no examples to the contrary (ie, it being a mirage).
What would make you think that this time it could be a mirage?
You can delay the consequences of bad currency management, but eventually the consequences will hit you, hard.
The normal rules are on hold because the USD is the world reserve currency. When USD are manufactured, a huge chunk of them is bought by wealthy foreigners to store value. That means that we haven't felt the consequences of printing lots of money because we've been sharing the consequences with a huge and growing number of wealthy foreigners.
But the only reason the USD is the world reserve currency is because there's nothing better. When something better enough comes along, all that USD will come flooding back and we'll suffer all the inflationary consequences of printing money for decades. Those consequences will be compressed to a very short amount of time.
>As for "baseless investment", you might want to read up on hard money properties.
How does hard money ensure that a decay in real investments does not erode the real value of the currency in the long run? It doesn't. You're relying on the rest of the world to make those real investments to maintain the real value of your currency. Having a currency be a store of value just shifts the medium of exchange function to a different currency. The idea that you make a profit off of making it harder to do real investments is absurd.
It's equivalent to letting a plot of land sit idle for 20 years while the population grows and then expect the future generation to work hard for it even though you did nothing to improve the value of the land, nor did you help people get higher paying jobs so they can afford your expensive land.
KYC only helps to an extent, right? My understanding of crypto is minimal, but if you run your own miner I assume you don't need to verify anything to anyone. You should be able to send out transactions to the network and have them be accepted anonymously, which is what most people who would be interested in money laundering would do.
It inhibits tax collection, which funds common goods. It also thwarts law enforcement, which is counter to public benefit.
We can debate whether taxes or laws or governments should exist. But they do, and most people seem to favor that. Debating a thing and actively subverting it are different. Just as subverting a thing and expecting such subversion to have no consequences or response are different.
If you have something that lets you "transfer large sums of cash untraceably across the globe, with no way for the government to do anything about it," it's going to make it easier to hide income and assets. That inhibits tax collection. (Same way cash does.)
I bet if we took all the legal and illegal offshore shenanigans and the laws written by the wealthiest that create more loopholes, the amount of "inhibiting" of tax collection by cryptocurrency in comparison is a rounding error.
Crypto doesn't let you transfer cash. Someone has to sell you the crypto for cash, and someone has to buy the crypto for cash... at both ends, taxes and law enforcement can act.
"It also thwarts law enforcement, which is counter to public benefit." not in all case. but also is enabling purchase of goods and services outside of government allowence? people who want psychadelic to treat ptsd, sex work, repressive regime that bar purchase of certain material all circumvented. only a tool, can be good or bad.
> We can debate whether taxes or laws or governments should exist.
It is pointless to debate the need for taxes with the corrupt governments and their taxmen. They make the laws, they have a monopoly on the use of force and they do not want to relinquish their power. The only possible move is to subvert them.
> Debating a thing and actively subverting it are different. Just as subverting a thing and expecting such subversion to have no consequences or response are different.
We know there are consequences. That is why technology must take that into account. They make their ridiculous laws, we make it impossible for them to be effectively enforced. They'll have to stoop to ever increasing levels of tyranny in order to maintain the same level of control they previously enjoyed.
Is there a limit? I don't know. I fully expect them to try to link cryptocurrency to terrorism or something.
It was decided it was a bad thing when the US coerced the rest of the Western world into the war on terror. If you are not with us, you are against us etc.
Yes, let's be real. The vast majority of people who use cryptocurrencies for payments use them because they have no legal alternative. It's the same problem that all privacy focused technologies "suffer" from. When the law is wrong then you have no choice but to break the law but there is no way to distinguish people escaping from an oppressive government and people laundering money from criminal sources. The oppressed and the criminals both take the same bus.
Yes, although on a volume basis money laundering for criminal (as in organized crime) is likely much larger than refugees fleeing their country & attempting to take some of their money with them.
>but there is no way to distinguish people escaping from an oppressive government and people laundering money from criminal sources
Is there a difference? Which governments aren't oppressive so their definitions of criminal sources don't count? I think they are exactly the same thing. A meaningful split might instead be funds derived from violent crime vs victimless crime.
The whole crypto is bad, reminds me of the crypto wars where governments to this day try to outlaw encryption technology because bad guys can use it also.
You know ransomware encrypts data to make it inaccessible - we should ban encryption also.
Funny how it even shares the name with cryptocurrencies
Completely agree. Money laundering laws are just the financial version of global surveillance. This cryptocurrency debate is just the financial version of the crypto wars. History just keeps repeating. I find it interesting how the government is a lot more heavy handed when money is involved...
Good question! I am not sure! I had a brief look at their 2020 and 2021 report but I havent been able to see how they got the data and reached their conclusions.
Its worth noting that their entire business is built around detecting blockchain based illicit activities.
Your honor, can the prosecution please be compelled to demonstrate where the bitcoin physically exists? Oh on this computer? Well, the key is memorized and there are several copies saved all over the world in cloud computers. Can the prosecution show the court, physically, where in the computer the asset exists?
"This is a fairly recent “announcement” and many people are upset about the Reserve Bank making up seemingly hostile and uninformed rules regarding something that has no notion of borders and is practically impossible for the regulators to control in terms of owning and transferring. Something that arguably does not even exist in any one location..." So now, a memorized key or password means you are transferring "right to capital" and therefore cannot leave South Africa? I'm fairly certain that Apartheid was thoroughly shot down back in the 80s.
The law isn't new and expecting cryptocurrency to get a free pass. The guidelines for how to follow those laws make sense. If there is anything to be upset with, it is the law itself which is something that South Africans have had a long time to get changed.
It isn't clear if its illegal to use ones Single Discretionary allowance (SDA) (1m ZAR per annum) or applying for and using a Foreign investment allowance (FIA) (further 10m ZAR per annum) for crypto.
If exchange control was applied fairly as was the interpretation up until recently, then staying below those amounts in ZAR terms would be fine. However, that may not be the case any more.
> can compel the bank directly, no one can "force" the blockchain do to anything that's not programmed to do
This doesn't work with banks outside a court's jurisdiction. That doesn't stop enforcement.
We already have tools that informally designate tainted versus untainted wallets. Incorporating that into the law wouldn't be that difficult nor, I suspect, controversial.
but did stop enforcement... swiss banks were for many years never disclosing and it had stopped enforcement in many case... this only has been changed in recent years... birkenfeld disclosures led to no more american clients out of american regulation, swiss signing FACTA, similar thing.
They cam force the those who control access to specific assets on the chain to do something in the exact same way they can force a bank to do something.
They can't compel a bank outside their jurisdiction. If your crypto is in Coinbase and you convert it to USD and then send it in to South Africa when you need to convert to the local currency & buy something, it seems like you'll be okay.
I suppose the issue will be getting you paycheck $$ from South Africa into Coinbase (or wherever)
A crypto wallet is a handful of bytes. Perhaps a string of words if you are using passphrases as mnemonics. Where does that exist? A bank or exchange does have a physical location and would exist somewhere, but a crypto wallet really has no defined location unless specifically being held in a defined place on a defined server as per business rules. Its like saying "you cannot leave South Africa because your body is worth, like, um 50,000 USD in harvested organs..."
The claim is that location of the asset is literally impossible to prove short of having the only copy of the key on a drive in possession of the prosecution. An example crypto asset, in this case, perhaps one that is less than the threshold for this law, but used in court can be easily used to show that the asset either exists in multiple places at once, or nowhere at all, and can even exist, ephemerally, in the mind of someone or multiple people.
you could probably use CRISPR to literally trans-code it into base pairs and inject it into your genome, but the cost of synthesizing the oligonucleotide might be more than the wallet holds in some cases.
> And by the way, this exact rule is the reason many South African startup founders incorporate in Delaware instead of locally, because it is extremely difficult to attract foreign investment if the investors know they will not be able to get the return on their investment (or share of the IP) out of the country again.
Except that in the USA you also need to declare transfers over $10,000 to the Internal Revenue Service (IRS). And this is done to find people trying to avoid paying taxes. It is the same for the European Union. And it is the same for any other country.
Quite often the answer to all this articles is "the world does not work as you think it works", crypto-currencies are not special, it is just that the bureaucracy of countries need to catch up.
> Except that in the USA you also need to declare transfers over $10,000 to the Internal Revenue Service (IRS). And this is done to find people trying to avoid paying taxes. It is the same for the European Union. And it is the same for any other country.
Re-read the article. Foreign investors literally cannot move their money* from South Africa to another country, period, if the law is followed strictly. It's not money laundering or tax issues, it's literally wealth portability.
In the USA it is at least merely a CRT report the bank has to file. It looks like in South Africa they're going to need permission first rather than simply providing the government with the ability to track capital movements.
Just remembering what someone from the trade directorate of the EU told me a some years ago about Bitcoin: "If it starts to have a real impact on the ability to collect taxes and control money transfers we are simply going to make it illegal".
Except by then the cat is out of the bag and significant % of the population/institutions holds it and you can't hurt your own population without swift opposition. It's pretty clever if it works out.
The inversion of monetary control is the biggest reason my mind boggles that governments haven't clamped down harder.
The only explanation I can come up with is that institutional banking / government regulation is so stodgy that they haven't played out the decade+ repercussions.
Because after viable value is established, it's going to be a hard genie to put back in the bottle.
It's much harder to make something that appears to have value, not. Than it is to keep something that appears to not have value, not having value.
> institutional banking / government regulation is so stodgy that they haven't played out the decade+ repercussions
Crypto is massively profitable. Wall Street hasn't seen margins like these in a long time. There aren't clear and present harms accruing to the electorate. That leaves no incentive, in countries without capital controls, to bother with it.
I don't think we've hit that critical mass yet though. And increased regulation can simply kill it by inches so there's no sudden cliff to drop off of that gets people too upset.
To me, the Coinbase IPO was a major milestone in achieving critical mass, if you look through their numbers, it has already achieved pretty massive scale compared to it's age. Jury is still out, but I'm confident the cat is more or less out of the bag.
1) Most people on Coinbase are speculators, and...
2) Coinbase follows government regulation
...so it's not really much of a step towards "[having] a real impact on the ability to collect taxes and control money transfers."
I think Coinbase (and Robinhood) offer pretty good avenues towards...
> And increased regulation can simply kill it by inches so there's no sudden cliff to drop off of that gets people too upset.
...by doing something like blocking bank transfers/credit card transactions to offshore exchanges and blocking cryptocurrency transfers to random addresses by most users from Coinbase/Robinhood. That would kneecap the ability to use cryptocurrency to bypass government regulations but still allow the average Joe to speculate.
Ah Coinbase...where apparently you can't even exchange dollars for dollars (USD for USDC) without paying a hefty fee, and where I was only able to buy Tether and not USDC for...some reason.
That wouldn't be a big hurdle to overcome. They will just outlaw self-custody and make it illegal for you to own your own wallet/private keys without some kind of money license. The institutions will be unaffected if they still want to play with crypto for whatever reason, but other folks are going to be screwed because they won't be able to move their money in and out of fiat.
Who is "they"? Nobody universally and single handedly decides rules and regulations. For every person that will advocate for what you're suggesting, there will be even more fierce advocates for the reverse of that.
Free market... "No person shall, except with permission granted by the Treasury and in accordance with such conditions as the Treasury may impose — take out of the Republic goods, including personal apparel, household effects, and jewellery which have a value in excess of 600 Rand (approx $40) or of such greater amount as the Treasury may determine;"
When it was this fringe, nerdy digital coin i could transfer to my friends to pay my bar tab. Yeah - Venmo/paypal/ a billion other systems that did the same thing, but to my friends btc and eventually eth was cooler.
I could stake coins, provide liquidity, mine random coins from my laptop - It was fun. The concept of a global computer was awesome, interesting and nerdy. I've never used an exchange, but i could watch my coins go up and use them to play a couple random Play-To-Earn games, which was also fun.
Now we got all these 'Scam' Coins. But they aren't scams because they literally come out and say they are scams but still achieve billions of dollars in market cap because everyone is just trying to make a quick buck/ have constrained liquidity.
I think the SEC needs to come in and regulate this space, it would be a very welcome change to what crypto has become. Make stablecoins have 24/7 auditability of their investments and have some vetting mechanism to trade on exchanges. That would make it nerdy and cool again.
Every single crypto was and is called a scam in every single chat and thread about it. Pivoting to that as your rationale for whats different is very inaccurate.
It was soooo cringy and I think that's why i liked it.
Going to the old BTC or crypto meetups was like going to a warhammer turny. No one showered, everyone smelled like shit and you always had those wannabe prophets preaching about a 'New World Order'. Everyone laughed along and never took it too seriously. Same thing now but people act like those prophets have something interesting to say because they are in a $10k suit and screaming "Fuck Elon" on stages haha.
Haha, I agree that the behavior of those people is a major turnoff.
Communities in the space should be wary of encouraging cult-like behavior. Those who that are cult-like will probably have a hard time attracting talented people who can make valuable contributions, since they're usually attracted by the prospect of making new things possible for the first time, rather than some weird cult with a manifest destiny ("to-the-moon") narrative.
SEC regulation would make the space nerdy and cool again?
I agree that there are many ill-informed people are buying into scams in "crypto" because they think they're "getting in early on the next bitcoin".
e.g. I have a close friend who is quite non-technical who is taking a naive approach by putting a significant portion of his funds into a "cryptocurrency" (not even a utility token) with a very cultish following and pyramid/ponzi scheme mechanics. I've looked into it, and the only buzz seems to be coming from the project core team patting themselves on the back with paid PR releases that overstate their "significant partnerships", bots, and people who want to retire off its "holder incentives". There is notably no buzz from actual developers or similarly credible people.
While I think it makes sense to try to protect people like that from making big mistakes and likely losing significant portions of their net worth, I worry that heavy-handed regulation of the space could block the natural emergence of new use cases and projects that could have very worthwhile public benefits. Or worse, could make people who still believe in the potential of things like web3 and defi– and choose to continue working on projects that violate new and likely unfit regulations –"criminals".
We should be wary of discouraging talented people with good intentions from contributing to the exploration and development of projects around web3 and defi (which depends on exploring different types of application and governance tokens, since these are what allow a decentralized project to economically incentivize its participants to act in a way that serves the project, and in a coordinated manner).
I think at the pace that talented developers are flocking to web3, we should start to see applications with mainstream appeal that provide viable, decentralized but well-coordinated, disintermediated alternatives to applications that have overpowered gatekeeper problems, e.g. those in social media, ecommerce, and many other spaces.
The only thing i can truly say about that is there's a reason biden tapped gary. I have faith in Gary. But there needs to be a light hand here, cause it's getting weird.
> I've looked into it, and the only buzz seems to be coming from the project core team patting themselves on the back with paid PR releases that overstate their "significant partnerships", bots, and people who want to retire off its "holder incentives". There is notably no buzz from actual developers or similarly credible people.
What irks me most is how it's useless for day to day transactions. Ethereum has an average fee right now of over $6.50. Nobody is going to use these things seriously as a currency with fees this high.
If this was just about the law and didn't say anything about cryptocurrency or bitcoin these comments would be a lot more sensible.
It seems like simply including cryptocurrency in an article triggers an in-group vs out-group where people dive right into attacking positions.
Making it illegal to move more than 40 USD of value out of South Africa without written permission from the treasury is absurd. Every tourist has done this, I've done this. I'll do it again without any fear of being charged for this crime.
You can prove somebody has access to a registry on a blockchain, you cant prove nobody else does. This has been one of the hurdles for custodial regulations to adapt to. South Africa has the entire concept wrong though.
> the Reserve Bank making up seemingly hostile and uninformed rules regarding something that has no notion of borders
The whole point of being a government organization is the ability to make up rules and define notions of things like borders.
Sure, the rules may or may not be hostile and uninformed, but it seems silly to criticize a government for doing literally the primary thing it is designed to do.
> This is a fairly recent “announcement” and many people are upset about the Reserve Bank making up seemingly hostile and uninformed rules regarding something that has no notion of borders and is practically impossible for the regulators to control in terms of owning and transferring. Something that arguably does not even exist in any one location...
Actually it's pretty simple. By "owning" Bitcoins, you own money/capital. But it's in the "blockchain", or alternatively, the possession of such money happens inside South Africa. Once you do a transaction that transfers that capital (or the power of control of such capital) outside of South Africa (ie: a foreign exchange), you are breaking the law. If you are sending it to another friend in South Africa, you should be fine. (ps: Just reading into the substance of such a law, why it was made, I'm not a lawyer and this is not a legal advice).
> And by the way, this exact rule is the reason many South African startup founders incorporate in Delaware instead of locally, because it is extremely difficult to attract foreign investment if the investors know they will not be able to get the return on their investment (or share of the IP) out of the country again. It essentially turns our country into an economic Black Hole.
All these Entrepreneurs are breaking the capital AND the fiscal laws of the country. Since I assume they won't report their holdings (because of the capital controls).
> First of all, we are dealing here with existing (very old) legislation that is fairly unique to South Africa. No “new rules” have been made. Not many countries deal with the type of restrictive exchange controls we have, in fact this specific clause was promulgated in 1961.
Most countries do have controls on the "transfer" of capital outside of a country border. (or into the country too). But since you are using the banking system, you do not notice such regulation.
> Anyway, the Reserve Bank is now in a position where it must either continue supporting a 60 year old, unenforcable rule, or focus on updating legislation to align with 2021 realities.
The thing is, countries have a payment balance. They put these rules because they usually have a few big export companies (usually natural resources) or tourism. Allowing these companies to take their money out, will destabilize their balance of trade. They could ignore the crypto-kids (their size is negligible for now), but they can't afford a loophole for the system. And for that reason, the law is unlikely to get patched.
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[ 4.1 ms ] story [ 178 ms ] threadAgain, there does not seem to be any intrinsic difference between anonymous cryptos and non-anon if cryptos are generally illegal and not a valid tender
Recently it's become a game of baseless investment, but anyone actually wanting to use crypto currencies as payment should've seen this coming from miles away.
Not entirely. Capital controls and currency bans are distinct from AML.
South Africa's proximate problem is capital controls. Cryptocurrencies make those controls easier to circumvent. If you look at the countries that are responding forcefully to crypto, it's the ones who want a sovereign monetary policy and relatively fixed exchange rate [1].
[1] https://en.wikipedia.org/wiki/Impossible_trinity
Not necessairly if those people have a lot of debt, or the inflation fears turn out to be a mirage.
We have many examples throughout history where dumping large amounts (multiples) of money into an economy causes inflation. And to my knowledge, we have no examples to the contrary (ie, it being a mirage).
What would make you think that this time it could be a mirage?
Because people have been wailing about hyperinflation fears for the last decade at least, and it hasn't happened.
The normal rules are on hold because the USD is the world reserve currency. When USD are manufactured, a huge chunk of them is bought by wealthy foreigners to store value. That means that we haven't felt the consequences of printing lots of money because we've been sharing the consequences with a huge and growing number of wealthy foreigners.
But the only reason the USD is the world reserve currency is because there's nothing better. When something better enough comes along, all that USD will come flooding back and we'll suffer all the inflationary consequences of printing money for decades. Those consequences will be compressed to a very short amount of time.
As it has been for more than 50 years. Entire people's lives happened between those "consequences".
On the long term, we are all dead.
As for "baseless investment", you might want to read up on hard money properties.
How does hard money ensure that a decay in real investments does not erode the real value of the currency in the long run? It doesn't. You're relying on the rest of the world to make those real investments to maintain the real value of your currency. Having a currency be a store of value just shifts the medium of exchange function to a different currency. The idea that you make a profit off of making it harder to do real investments is absurd.
It's equivalent to letting a plot of land sit idle for 20 years while the population grows and then expect the future generation to work hard for it even though you did nothing to improve the value of the land, nor did you help people get higher paying jobs so they can afford your expensive land.
No. That's not the point of cryptocurrency.
> to transfer large sums of cash untraceably across the globe
Wrong again. You can trace all transactions across the globe with cryptocurrency.
> with no way for the government to do anything about it
Why is that a bad thing?
* Assuming KYC laws are enforced and account holders are listed
When things start moving to proof of stake, less so.
It inhibits tax collection, which funds common goods. It also thwarts law enforcement, which is counter to public benefit.
We can debate whether taxes or laws or governments should exist. But they do, and most people seem to favor that. Debating a thing and actively subverting it are different. Just as subverting a thing and expecting such subversion to have no consequences or response are different.
If you have something that lets you "transfer large sums of cash untraceably across the globe, with no way for the government to do anything about it," it's going to make it easier to hide income and assets. That inhibits tax collection. (Same way cash does.)
It is pointless to debate the need for taxes with the corrupt governments and their taxmen. They make the laws, they have a monopoly on the use of force and they do not want to relinquish their power. The only possible move is to subvert them.
> Debating a thing and actively subverting it are different. Just as subverting a thing and expecting such subversion to have no consequences or response are different.
We know there are consequences. That is why technology must take that into account. They make their ridiculous laws, we make it impossible for them to be effectively enforced. They'll have to stoop to ever increasing levels of tyranny in order to maintain the same level of control they previously enjoyed.
Is there a limit? I don't know. I fully expect them to try to link cryptocurrency to terrorism or something.
It was decided it was a bad thing when the US coerced the rest of the Western world into the war on terror. If you are not with us, you are against us etc.
Yes, although on a volume basis money laundering for criminal (as in organized crime) is likely much larger than refugees fleeing their country & attempting to take some of their money with them.
Is there a difference? Which governments aren't oppressive so their definitions of criminal sources don't count? I think they are exactly the same thing. A meaningful split might instead be funds derived from violent crime vs victimless crime.
You know ransomware encrypts data to make it inaccessible - we should ban encryption also.
Funny how it even shares the name with cryptocurrencies
Cash is still king when it comes to crime. Crypto can help make it harder for criminals.
Its worth noting that their entire business is built around detecting blockchain based illicit activities.
If exchange control was applied fairly as was the interpretation up until recently, then staying below those amounts in ZAR terms would be fine. However, that may not be the case any more.
This doesn't work with banks outside a court's jurisdiction. That doesn't stop enforcement.
We already have tools that informally designate tainted versus untainted wallets. Incorporating that into the law wouldn't be that difficult nor, I suspect, controversial.
Enter the exchange control laws from the 60s that still limit capital flow out of SA.
1m ZAR per annum per person(~70k USD) this includes things like Netflix subscriptions, Amazon orders etc.
As you say, there was a delay, not a stoppage.
I suppose the issue will be getting you paycheck $$ from South Africa into Coinbase (or wherever)
Is the claim that courts the world over would be stymied by the supposedly novel concept of an intangible asset?
Except that in the USA you also need to declare transfers over $10,000 to the Internal Revenue Service (IRS). And this is done to find people trying to avoid paying taxes. It is the same for the European Union. And it is the same for any other country.
Quite often the answer to all this articles is "the world does not work as you think it works", crypto-currencies are not special, it is just that the bureaucracy of countries need to catch up.
Re-read the article. Foreign investors literally cannot move their money* from South Africa to another country, period, if the law is followed strictly. It's not money laundering or tax issues, it's literally wealth portability.
* Technically, minus ~US$69,000.
The only explanation I can come up with is that institutional banking / government regulation is so stodgy that they haven't played out the decade+ repercussions.
Because after viable value is established, it's going to be a hard genie to put back in the bottle.
It's much harder to make something that appears to have value, not. Than it is to keep something that appears to not have value, not having value.
Crypto is massively profitable. Wall Street hasn't seen margins like these in a long time. There aren't clear and present harms accruing to the electorate. That leaves no incentive, in countries without capital controls, to bother with it.
1) Most people on Coinbase are speculators, and...
2) Coinbase follows government regulation
...so it's not really much of a step towards "[having] a real impact on the ability to collect taxes and control money transfers."
I think Coinbase (and Robinhood) offer pretty good avenues towards...
> And increased regulation can simply kill it by inches so there's no sudden cliff to drop off of that gets people too upset.
...by doing something like blocking bank transfers/credit card transactions to offshore exchanges and blocking cryptocurrency transfers to random addresses by most users from Coinbase/Robinhood. That would kneecap the ability to use cryptocurrency to bypass government regulations but still allow the average Joe to speculate.
Also, I'm not suggesting that this should happen, I'm just saying that it would be pretty easy to throw a wrench into the crypto machine.
When it was this fringe, nerdy digital coin i could transfer to my friends to pay my bar tab. Yeah - Venmo/paypal/ a billion other systems that did the same thing, but to my friends btc and eventually eth was cooler.
I could stake coins, provide liquidity, mine random coins from my laptop - It was fun. The concept of a global computer was awesome, interesting and nerdy. I've never used an exchange, but i could watch my coins go up and use them to play a couple random Play-To-Earn games, which was also fun.
Now we got all these 'Scam' Coins. But they aren't scams because they literally come out and say they are scams but still achieve billions of dollars in market cap because everyone is just trying to make a quick buck/ have constrained liquidity.
I think the SEC needs to come in and regulate this space, it would be a very welcome change to what crypto has become. Make stablecoins have 24/7 auditability of their investments and have some vetting mechanism to trade on exchanges. That would make it nerdy and cool again.
I miss nothing about that.
Every single crypto was and is called a scam in every single chat and thread about it. Pivoting to that as your rationale for whats different is very inaccurate.
Going to the old BTC or crypto meetups was like going to a warhammer turny. No one showered, everyone smelled like shit and you always had those wannabe prophets preaching about a 'New World Order'. Everyone laughed along and never took it too seriously. Same thing now but people act like those prophets have something interesting to say because they are in a $10k suit and screaming "Fuck Elon" on stages haha.
Communities in the space should be wary of encouraging cult-like behavior. Those who that are cult-like will probably have a hard time attracting talented people who can make valuable contributions, since they're usually attracted by the prospect of making new things possible for the first time, rather than some weird cult with a manifest destiny ("to-the-moon") narrative.
I agree that there are many ill-informed people are buying into scams in "crypto" because they think they're "getting in early on the next bitcoin".
e.g. I have a close friend who is quite non-technical who is taking a naive approach by putting a significant portion of his funds into a "cryptocurrency" (not even a utility token) with a very cultish following and pyramid/ponzi scheme mechanics. I've looked into it, and the only buzz seems to be coming from the project core team patting themselves on the back with paid PR releases that overstate their "significant partnerships", bots, and people who want to retire off its "holder incentives". There is notably no buzz from actual developers or similarly credible people.
While I think it makes sense to try to protect people like that from making big mistakes and likely losing significant portions of their net worth, I worry that heavy-handed regulation of the space could block the natural emergence of new use cases and projects that could have very worthwhile public benefits. Or worse, could make people who still believe in the potential of things like web3 and defi– and choose to continue working on projects that violate new and likely unfit regulations –"criminals".
We should be wary of discouraging talented people with good intentions from contributing to the exploration and development of projects around web3 and defi (which depends on exploring different types of application and governance tokens, since these are what allow a decentralized project to economically incentivize its participants to act in a way that serves the project, and in a coordinated manner).
I think at the pace that talented developers are flocking to web3, we should start to see applications with mainstream appeal that provide viable, decentralized but well-coordinated, disintermediated alternatives to applications that have overpowered gatekeeper problems, e.g. those in social media, ecommerce, and many other spaces.
If I had to take a guess, Cardano?
This is the only regulation I would welcome. I'd rather have a wild west when it comes to the rest of the cryptocurrency space.
It seems like simply including cryptocurrency in an article triggers an in-group vs out-group where people dive right into attacking positions.
Making it illegal to move more than 40 USD of value out of South Africa without written permission from the treasury is absurd. Every tourist has done this, I've done this. I'll do it again without any fear of being charged for this crime.
You can prove somebody has access to a registry on a blockchain, you cant prove nobody else does. This has been one of the hurdles for custodial regulations to adapt to. South Africa has the entire concept wrong though.
The whole point of being a government organization is the ability to make up rules and define notions of things like borders.
Sure, the rules may or may not be hostile and uninformed, but it seems silly to criticize a government for doing literally the primary thing it is designed to do.
Actually it's pretty simple. By "owning" Bitcoins, you own money/capital. But it's in the "blockchain", or alternatively, the possession of such money happens inside South Africa. Once you do a transaction that transfers that capital (or the power of control of such capital) outside of South Africa (ie: a foreign exchange), you are breaking the law. If you are sending it to another friend in South Africa, you should be fine. (ps: Just reading into the substance of such a law, why it was made, I'm not a lawyer and this is not a legal advice).
> And by the way, this exact rule is the reason many South African startup founders incorporate in Delaware instead of locally, because it is extremely difficult to attract foreign investment if the investors know they will not be able to get the return on their investment (or share of the IP) out of the country again. It essentially turns our country into an economic Black Hole.
All these Entrepreneurs are breaking the capital AND the fiscal laws of the country. Since I assume they won't report their holdings (because of the capital controls).
> First of all, we are dealing here with existing (very old) legislation that is fairly unique to South Africa. No “new rules” have been made. Not many countries deal with the type of restrictive exchange controls we have, in fact this specific clause was promulgated in 1961.
Most countries do have controls on the "transfer" of capital outside of a country border. (or into the country too). But since you are using the banking system, you do not notice such regulation.
> Anyway, the Reserve Bank is now in a position where it must either continue supporting a 60 year old, unenforcable rule, or focus on updating legislation to align with 2021 realities.
The thing is, countries have a payment balance. They put these rules because they usually have a few big export companies (usually natural resources) or tourism. Allowing these companies to take their money out, will destabilize their balance of trade. They could ignore the crypto-kids (their size is negligible for now), but they can't afford a loophole for the system. And for that reason, the law is unlikely to get patched.