mobile menu mobile search

What SARB thinks about Bitcoin

What SARB thinks about Bitcoin

The South African Reserve Bank (SARB) has warned against the risks posed by cryptocurrency, Bitcoin – noting that it has no legal status or a regulatory framework.

The SARB’s position on Bitcoin follows the news that Standard Bank had been running a Bitcoin trial, which it later stated would not be launched to customers.

As defined by Reuters, as a crypto-currency, bitcoin is passed between two parties digitally and can be traded on exchanges for real-world currencies. Its value fluctuates according to user demand but it is not backed by any government or central bank.

Bitcoin’s platform has begun to gain real traction in recent months forcing governments and regulators to look for the best way to respond.

“Bitcoin has no legal status or a regulatory framework.  Thus it poses a number of risks for those that would choose to transact with it such as the lack of guarantee of security, convertibility or value,” said Hlengani Mathebula, head of group strategy and communications at the SARB.

“The South African Reserve Bank (SARB) is actively monitoring the developments around virtual currencies to inform any future regulatory approaches that may become necessary within the South African jurisdiction,” Mathebula said.

The SARB and the National Treasury (the Ministry of Finance) together constitute the monetary authority in South Africa.

A bitcoin is currently worth about $264 (Mt.Gox, 19 February), with its value fluctuating widely amid increasing visibility. Last September, a bitcoin was worth around $150, and by late December the value was near the $1,000 mark.

Israel said on Wednesday that it was considering regulation of bitcoin and warned citizens that using such decentralized virtual currencies was risky, Reuters reported.

Israel, home to pioneering firms in hi-tech fields such as cryptography, has emerged as a bitcoin hotspot.

In the US, meanwhile, Robocoin is set to install the first automated teller machines that enables users buy and sell bitcoin.

According to CoinMap, a few South African companies have already started to accept Bitcoin, predominantly in the Western Cape.

They include a paintball shop, a taxi service, Fire & Ice – Fire dancers Cape Town,  an internet marketing company, and a tax consultancy.

In recent weeks, bitcoin was hit by attacks from unknown computer hackers that led to problems at two exchanges.

More on Bitcoin

The world’s most popular digital currencies

Cyber currency here to stay

Standark Bank throws out Bitcoin idea

Bitcoin up and down as withdrawals halted

US regulator mulls Bitcoin rules


BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
Join the Conversation
  • Stroebs

    Let’s not forget about LandmarkPC who also accept BTC.

    • jason banfield

      And who is (the most) actively involved of all current BTC accepting retailers.

      • Riaan Swart

        huh? …actively involved in what? the promotion of Bitcoin?

        • jason banfield

          You sound surprised?

          • SpotOn3512

            Hahaha awesome!!

          • Landmark Computers

            Yip, that’s my car 🙂 In my personal capacity I am (with the help of some brilliant people) setting up The Bitcoin Foundation of South Africa that should be established within the next 2 months. We hope to represent Bitcoin as best we can by informing people and businesses on the benefits of BTC, helping businesses integrate Bitcoin into their online payment as well instore payment gateways and run events with guest speakers. Exciting times ahead.

          • Riaan Swart

            No, I was asking you to clarify your statement. To say they’re “the most actively involved” is nonsensical. You need to learn to finish your sentences, Jason. You still haven’t answered my question, so I’ll ask it again: actively involved *in what*?

          • jason banfield

            Oh sorry I see your point… let me clarify: He is the leader of the Cape Town bitcoin meetup and is the founder of the south african bitcoin foundation. Simple googleing and the reporter should have at least mentioned him…

  • kalemanzi

    Quote: “Bitcoin has no legal status or a regulatory framework. Thus it poses a
    number of risks for those that would choose to transact with it such as
    the lack of guarantee of security, convertibility or value,” – Actually, that is part of the strength of bitcoin. It is much more solid than inflated paper currency that is not backed by a real commodity and it’s not “regulated” and thus controlled or pie sliced by some arm of government. That’s my opinion in any case, and I regret that I did not already get bitcoins in the beginning.

    • Professor X

      To be fair Bitcoin isn’t backed by a real commodity either.

      • jason banfield

        But it does have intrinsic value. I’d say it has value in undeniable proof / evidence of ownership. As well as not having to wait 3-5 working days for a transaction clearance. And queues and bank stuff ups.You get to be your own bank. No need for international wire transfers or other payment methods between paypal’s 3% and moneygram’s 10%…

      • Bernd Jendrissek

        Neither is the Rand, or the Dollar, if that’s what you’re alluding to. It’s backed by something more awesome than a commodity: people’s voluntary choice to use it. To use it because it’s more convenient for them, or more cool, or more aligned with their values, whatever, rather than because Big Brother insists that you pay taxes with it.

        • Professor X

          Yes I said either, as kalemanzi already noted paper currency isn’t backed by anything. The only real money in the world is gold and silver. People will learn that the hard way.

          • Bernd Jendrissek

            Gold and silver aren’t any more “real” as money than platinum or rubies, yet we don’t use those as money today. Our choice of currency is a social construct, not a necessary consequence of the material’s type.

            Ultimately it doesn’t matter what the currency is made of – as long as more or less everyone in the economy agrees on what to use. Bitcoin is weak there today, but clearly it’s so superior in some ways for some people that its use is growing anyway.

          • Professor X

            Agreed. Only problem is that rubies aren’t uniform and platinum is too limited plus it has too many alternate uses. Gold has been used as money for thousands of years. What people agree on differs from year to year.

          • bengine

            Gold is used because

            a) It is rare
            b) It is costly to produce (extract)
            c) It is durable – it does not tarnish or rust.
            d) (removed)

          • bengine

            Don’t we – then how come whenever there is finanical uncertainty in the markets the wealthy run to property and gold?

            Because it is a finite resource – and they know that anything backed by a finite resource will increase in value the more underlying goods and services it represents.

            “Ultimately it doesn’t matter what the currency is made of”
            True – it is how MUCH of it is there is and who has the power to make MORE of it. That is the key point to consider when evaluating BTC

      • andr01d

        It’s backed in terms of CPU cycles / Electricity x Miners. That’s certainly a real commodity?

      • bengine

        Oh yes it is – it is a limited resource used to convert goods and services into tradable commodoties. The more goods and services enter the market the more BTC will gain value – there are only 21+Millioin BTC possible – so as more goods and services are traded against BTC the greater the value of BTC.

        The problem with fiat currencies is that banking institutions can simply create more to their benefit and detriment of everyone else thereby dilluting the existing value that currency represents.

  • Wonder where they got the BTC $ value from as it’s out by a few hundred dollars

    • The value was taken from the largest Bitcoin exchange, Mt.Gox, on 19 February. We added the date and place retrieved. Interestingly, BTC is currently trading at an average of $219 on Mt.Gox.

      • slimslyde

        Gox is … undead.

      • SpotOn3512

        MtGox is not a very good reference for the Bitcoin price at this stage. Why not reference our very own local exchange?

        • Haroun Kola

          Sounds like a journalist who’s coached in the traditional forms of economics but out of touch with the bitcoin market

          • felgate

            Politely put 🙂

      • Francois Paul

        Better to get the price from Coindesk Price index http://www.coindesk.com/price/ or for the South African market http://bitx.co.za/market

      • Didn’t know MT Gox had it that low, I had to go double check if my exchange had the correct value or if yours was better. Seems that most exchanges list it as over 600$

        Even our local guys list 1 coin as over R7000 🙂

      • Riaan Swart

        Quinton, you realise that we have local exchanges that you could have used as a price reference? I doubt very many South Africans trade on mtgox.

      • Bernd Jendrissek

        Even a cursory search of the Internet would’ve shown you that MtGox is in very bad shape. Not sure where you got the idea that it’s the “largest” Bitcoin exchange, although I’ll grant you that it once was, and that the information available from a quick search of the Internet may be a bit dated.

  • SpotOn3512

    Why not reference the current price on BitX, our local Bitcoin exchange? The price seems to be way more stable there than on MtGox which appears to be shutting down.

  • Gene de Murro

    “While Bitcoin is an impressible speculative asset, as usable money, it’s a joke – a unit of account so volatile that nobody can remember what it’s worth, and so prone to sudden price spikes that nobody wants to spend the stuff.”

    “Bitcoins fail the most fundamental test of any useful currency: stability in comparison to the sort of things you might want to buy. The irony about Bitcoins is that they were initially embraced by people with a fear that traditional currencies were about to suffer hyperinflation. They haven’t. Bitcoins have suffered hyperdeflation, though. Nice for those who bought in early. But, in a real currency, that isn’t a feature: it’s a deadly bug.”

    http://timharford.com/2013/12/of-bitcoins-bubbles-and-bq-vouchers/

  • Realist

    LOL… coming from the SARB this is rich… the ones who single-handedly trashed (and still are trashing) the value of the Rand… maybe they’re just worried that the value of Bitcoin is doing better than Rand… AND they will not be able to get their fingers in that pie… I for one would rather have Bitcoin than the sorry assed ‘RONT’

  • Haroun Kola

    Bitcoin, or more accurately crypto-currencies are revolutionising the way we transact and I’m looking forward to the innovation that happens in this space as more people decide to take ownership of their own currency.

  • Yes we do accept, and even encourage bitcoin payments for our services. Why would anyone prefer ZAR?? LOL

  • DeWet Lombard-Bovéy

    Please dont mention MTGox price here. As there are issues on that exchange. The average price is roughly 600-700 USD on the other exchanges

  • IAmThePope

    “The South African Reserve Bank (SARB) has warned against the risks posed by cryptocurrency, Bitcoin – noting that it has no legal status or a regulatory framework.”

    Comments like these just remind me how little governments understand of Bitcoin. This is the whole point of bitcoin. It is not supposed to be regulated, that’s the beauty of it.

    Also using MtGox for prices? Really? MtGox is currently, for all intents and purposes, dead.

  • “A bitcoin is currently worth about $264 (Mt.Gox, 19 February), with its value fluctuating widely amid increasing visibility.”

    Nope – no one really uses Mt Gox as a measure of Bitcoin’s price anymore, and haven’t for a while.

  • bengine

    “The South African Reserve Bank (SARB) has warned against the risks posed
    by cryptocurrency, Bitcoin – noting that it has no legal status or a
    regulatory framework.”

    Thanks for the warning – duly noted – now back off and let us get on with moving into the 21st C.

    ” Its value fluctuates according to user demand but it is not backed by any government or central bank”

    By design …

    “A bitcoin is currently worth about $264 (Mt.Gox, 19 February), with its value fluctuating widely amid increasing visibility”

    Currently trading at over $635 – this is sensationalist reporting – attempting to paint the picture that BC is in trouble because of its low exchange. No excuse for this xe.com is just a click away and currently trading BTC at $636.

    BTC is 5 years old with low penetration – volatility is not only expected – it is almost guaranteed.

    “Israel said on Wednesday that it was considering regulation of bitcoin
    and warned citizens that using such decentralized virtual currencies was
    risky, Reuters reported” – Interesting ….

    “According to CoinMap, a few South African companies have already started to accept Bitcoin, predominantly in the Western Cape.” – mmm wonder why that is.

    “In recent weeks, bitcoin was hit by attacks from unknown computer hackers that led to problems at two exchanges.” … erm no BTC was not attached the EXCHANGES were attacked. Don’t mix the two. People gave money to the exchanges pending an exchange to another currency and their BTC were stolen. Analogous to giving your bag of gold to a factor and the factor was robbed – the gold is not the problem. BTC remains secure and as long as you are trading BTC to buy and sell you should be safer than trading in cash. If you want to trade your BTC for paper money – that is where it gets risky – but there are exchanges out there that allow you to safely convert your BTC.

    Lets not forget the crimes that occur on a daily basis with fiat currency in spite of regulation – and who is behind many of those crimes. Enron, Lehman Brothers – people loosing life savings and pensions – regulation was present – blatent crimes were committed – no prosecutions.

  • Peter

    Shame, poor SARS, Reserve Bank et al crapping themselves because:

    1. They won’t have control over the printing presses. This means that they will not be able to print money and basically devalue and steal from the public whenever money gets “tight”.
    2. Every single transaction is publicly viewable and is forever and ever visible in the blockchain. So if a crime is committed, even 10 years later the use of the bitcoins can be linked back to a wallet/account/person. Would have been fun to see Zuma explain the movement in Bitcoin if all of those were publicly available, but these guys push around money illegally and force the public to be monitored.
    3. You will be able to send money in a few minutes to anyone in the world, cross border, without some douche trying to control “your” money. Finally, a free market…
    4. The costs of sending any amount of Bitcoin currently is about 20 South African cents….yep, you heard that right, and it takes about an hour to do so. Banks all over the world, by the time they have added their admin fees, forex fees blabla it would come to nearly R1000 to send R20 000 overseas (did it recently – what for? To buy Bitcoin, that’s right). Look at the fine print…they take their cut everywhere.

    PS, I work for a bank, take them from the inside out…

    This thing is viral and the game is on.

Join our newest FREE BusinessTech newsletter today!
×