South African new legislation ban pension funds from investing in cryptocurrencies
A proposal from South African finance minister Enoch Godongwana bars pension funds from investing in digital assets and a deadline is November 12 for the same.
As per the Business Insider SA, Godongwana's deadline for public comment on the draught proposals indicates that he wants changes in place by the end of the year. prior to Godongwana's suggestions, South African pension funds saw cryptocurrencies as a grey area field in which they might invest up to 2.5% of their assets.
The new guidelines exclude cryptocurrency. Due to a lack of investor protection, South African officials have expressed persistent concerns about the risky nature of digital currencies, while also exploring the potential applications of distributed ledger technology. Regulation 28 uses the Pension Funds Act to regulate how funds can be invested and are intended to safeguard investors from over-investing in a single asset type.
Crypto assets are defined by the government of South Africa as any digital representation of value, “not issued by a central bank, but is capable of being traded, transferred or stored electronically by natural and legal persons for the purpose of payment, investment, and other forms of utility; applies cryptographic techniques and uses distributed ledger technology.”
Recent reports have indicated the South African financial regulators are preparing to speed up crypto regulation in response to retail investors being scammed by shady investment firms.
The South African Revenue Services changed its online tax filing system in a move targeting cryptocurrency arbitrage traders, as per Bitcoin.com news reported in July.
Similarly, in July, news reports claimed that the South African Revenue Services had changed its online tax filing system to target cryptocurrency arbitrage traders.
Finance Minister Godongwana's ministry utilizes similar justifications to back the draught plans, just like other South African regulators who have exploited consumer protection concerns to justify its actions against cryptocurrency. It claims that the proposed reforms will protect investors by restricting the amount of money that retirement plans can invest in specific assets or asset types.
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