Economist Dawie Roodt warns South Africans could abandon local currency as crypto rules tighten

The push towards decentralized technology

South Africa’s continued use of exchange controls will push citizens towards cryptocurrencies And stable coins unless the system is dismantled, said Dawie Roodt, director and chief economist at Efficient Group. He said the blockchain Technology has already made it easier and cheaper for people to move money across borders while giving them more direct control over their assets.

The economist insisted that attempts by National Treasury or the South African Reserve Bank to restrict this change would ultimately fail, he said.

“Don’t these people understand that the world has progressed and that there are new technologies? They can’t stop me anymore,” Roodt remarked.

Roodt was commenting on the Treasury’s draft capital flow management regulations, which include new reporting requirements for crypto holders and provisions that critics say could allow the state to expropriate digital assets.

As previously reported Bitcoin.com News, under the proposed settlement, residents holding crypto above an unspecified threshold would be required to report it and could be forced to sell it to the government. The regulations will also allow officials to search and seize if they suspect a crime, while violators face jail time.

Roodt said such measures are unenforceable because regulators cannot force people to disclose private keys or access to self-managed portfolios.

“This is such a stupid idea. How are they going to come to my mind?” he said. “They want to force me to give them my passwords, and they want to force me to open my phone or my computer.”

He argued that the nature of blockchain technology is making traditional exchange controls obsolete. If South Africa does not abolish them, he said, people will increasingly move away from the rand.

“If we don’t do it, I will stop using the rand and I will continue to use other currencies, because there I have more control,” he said.

Financial inclusion versus state control

The economist said the proposed regulations reveal a government mentality focused on control rather than adaptation.

“The ideology is that they want to control everything, but it’s very clear to me that they don’t understand what we’re doing,” he said.

He recognized that crypto can facilitate criminal activity, but said the benefits – including low-cost international transfers and access to financial tools for people without banking services – far outweigh the risks.

“Imagine people who don’t have access to a banking system somewhere in rural Africa starting to use these services. stable coins“, he said. “Now all of a sudden they have very low transaction fees and they can send their money anywhere in the world, 24/7.”

Large institutions already use blockchain for wholesale transactions, he added, noting that Mastercard and Visa have started investing in stable coin infrastructure.

The National Treasury has rejected claims that the draft regulations are aimed at seizing private interests. crypto assets.

In a May 15 statement, Treasury said the rules “do not intend to criminalize the possession of crypto assets or apply the regulation retrospectively.”

A separate draft manual on cross-border crypto transactions will be published for public comment, outlining which activities are considered cross-border flows and what obligations will apply to authorized service providers.

The Treasury said concerns about forced disposals of crypto, gold or foreign currencies were misplaced, adding that such measures would only apply “in limited circumstances, for example where an offense has been committed”.