South Africa is at the forefront in Africa when it comes to Bitcoin. With its thriving economy, advanced technology, and the law-friendly environment for Bitcoin, South Africa leads the continent in Bitcoin trading.
In this article, we focus on the legality of Bitcoin in South Africa and how to buy Bitcoin in South Africa instantly.
There has been no specific ban on Bitcoin trading in South Africa, so it’s safe to say that Bitcoin trading is legal in South Africa. However, the South African Reverse Bank (or SARB) has come out on several occasions to warn investors of the potential risks of Bitcoin trading following a mega Bitcoin scam in South Africa in 2019.
Brandon Topham, an executive in the financial regulatory body in South Africa, explains that even though Bitcoin is intangible and only floats on the web, there’s a need to classify it as a financial asset as people use it daily to make transactions.
Therefore, earnings from Bitcoin trading are subjected to taxation according to the South African tax laws. Any defaulter is liable to penalties as per the Tax Administration Act of 2011.
Bitcoin & Crypto Trading in South Africa
South Africans have had it easy trading Bitcoin and other crypto-assets as the government hasn’t placed any restrictions on it. That explains the exponential growth of the BTC/Rand transactions. Paxful, a peer-to-peer Bitcoin marketplace, revealed a significant rise in the amount transacted within one year compared to other years.
However, the lack of strict regulation has led to the rise of many unsecured platforms meant for Bitcoin trading. Such platforms pose a threat to many unsuspecting investors. Even so, Bitcoin trading has remained the most lucrative business for South Africans, as it contributes largely to economic growth.
The government is keen on ensuring cryptocurrencies bought from outside the country remain within the country. For example, as an investor, you’re allowed to buy Bitcoin worth up to 1 million South African Rand from any part of the world. However, you can be charged with criminal offense if you sell the Bitcoin outside SA unapproved by the Treasury.
This only means that the government recognizes the value Bitcoin trading adds to its economy and cannot compromise this value at all costs.
There is no regulation of Bitcoin in South Africa as yet. However, Brandon Topham says that preparations are underway to issue a regulation on the services involving Bitcoin and the players in the cryptocurrency sector.
The proposed new regulations will be instilled by the Financial Sector Conduct Authority (FSCA) to protect the South African Investors from fraud and malpractices witnessed in the Bitcoin sector.
The regulatory body will register all crypto-assets providers and display this information where all investors can see it. This will help them to relate with registered exchanges only and stay away from those unregistered.
Register with the Financial Intelligence Centre (FIC) as an “accountable” financial institution.
Collect all verifiable customer data to curb incidents of terrorism funding and money laundering through the exchanges.
Set up a risk management program that is implementable and maintainable.
Accountability for these crypto-assets providers means that the provider:
Conduct KYC and verify all the data collected.
Carry out Customer Due Diligence (CDD).
Keep records appropriately.
Continuously monitor suspicious financial activities on the site.
Report any suspected case to the FIC.
Keep the customer’s information safe.
There’s a lot of push for the regulation of Bitcoin following a major loss from investors through the Mirror Trading International (MTI) scam. The regulation should protect South African investors from future scams.
Best Places to Buy Bitcoin & Crypto in South Africa
With the increasing appetite for Bitcoin among South Africans, it’s ideal for wondering where you can legitimately buy Bitcoin in SA. We got you!
This article discusses two of the best places to buy Bitcoin & Crypto in South Africa and how to do it. These two are eToro and Coinbase.
How to Buy Bitcoin in South Africa through eToro
eToro has extended its services to South African investors, with many people find it easy to use and a good choice for Bitcoin trading, especially beginners. Its CopyTrader feature raises it a bar high in comparison to other platforms.
Top-tier financial authorities heavily regulate it, so you don’t have to worry about your funds’ safety. Plus, deposits are secured by the latest SSL technology.
On signing up, you get a personalized Bitcoin wallet where you can hold the coins you purchase. You can also trade them in the market or loan them out to get more profits.
Step 2 – Deposit funds into the account using any of the different deposit options available.
Step 3 – Buy Bitcoin and store it safely in your wallet.
How to Buy Bitcoin in South Africa through Coinbase
Coinbase is a great choice for investors because of the features that come with it. Having been established in the USA, Coinbase enjoys a broad audience as more customers sign up every day.
They have tight security on the platform and track all activities you engage in using your Bitcoin. If your activities are suspicious or involve payments for adult services, gambling, contraband goods, resale to unregulated exchanges, etc., Coinbase will close down your account instantly.
That means instances of fraud are minimal on Coinbase, and you can buy and hold your Bitcoin without worry.
On the day of this writing, March 2021, the price of Bitcoin read as follows:
1 Bitcoin equals 815,334.99 South African Rand. This is the current Bitcoin price in South Africa.
This price often fluctuates because of market volatility. Please check for the updated price in South Africa.
Cryptocurrency Scams in South Africa
South Africa has suffered what crypto enthusiasts call the biggest crypto scam so far. It’s the Mirror Trading International, which got away with over $500 million worth of Bitcoin from tens of thousands of unsuspecting investors.
The deal was good, just not too good to raise eyebrows. With many passive income opportunities mushrooming, MTI took advantage and presented itself as one, offering up to 10% returns on invested crypto monthly.
They positioned their offices in Johannesburg and Stellenbosch and actively engaged customers since June 2018. Half of the investors in MTI came from South Africa, while others came from other crypto bigwigs like the USA, UK, and Canada.
The investors were required to deposit BTC worth $100 and wait for MTI’s artificial intelligence software/trading robot to do its magic and multiply the money. Algorithmic trading is not new in the crypto market and has become abasing for most scams.
After its launch, many people speculated that it’s a scam. The FSCA (Financial Sector Conduct Authority) came out to warn investors of the possible scam in MTI, and people started withdrawing their money.
The authority went further to file charges against the platform after discovering that it had falsified documents and sneaked its way into the crypto arena. After the charges, investors could no longer access their money, and the MTI CEO vanished.
Investigations are ongoing, and investors are warned to be careful when investing in their cryptocurrency. If doubt is raised on the legitimacy of the platform they are investing in, it’s better to pull out your money you can. An alarm has been raised over De-Fi platforms, and it’s always better to be on the safe side.
Bitcoin Mining in South Africa
Bitcoin mining is like traditional gold mining. As time goes, the more expensive it is to mine it, as it requires more specialized equipment to reach it. With Bitcoin, the expenses incurred during mining are almost the worth of one Bitcoin.
In South Africa, it is much more expensive considering the high cost of electricity and the costly Bitcoin-mining machinery. For example, the most used Bitcoin miner is the ANTMINER S9 11.85TH/s costs about $1450 if you buy from the manufacturer, but the price doubles if you get it from a retailer store.
The mining machine consumes electricity at a rate of 1.5kW/h and has to be running 24 hours every day. If you calculate the amount of electricity you’d use in a month, it’s about 1080kWh. With the average cost of electricity in South Africa, which is about 147.50 c/kWh (fluctuates with time), you’ll be spending over R1600 monthly on electricity.
The mining machines become faulty fast because of the continuous running, so you’ll have to keep replacing them. Before you realize it, you’re losing more than you’re gaining.
But, if you’d want to be a Bitcoin miner, don’t be discouraged because many are making it big despite the challenges. They have created mining pools to join and remit your payments as a percentage of the Bitcoins you mine. One of such pools in South Africa is the F2Pool.
The profit you get also depends on the value of Bitcoin at that time. If the value skyrockets as it has happened in early 2021, then Bitcoin mining is all worth it.
One of such factors is the advanced technology in South Africa. Bitcoin is all about technology and the internet. The good technological structure in South Africa favors Bitcoin, and therefore, more people choose it.
Another factor is the easy access to Bitcoin through P2P platforms and crypto exchanges. There are no complicated procedures for accessing one as the government allows free exchanges between banks and the Bitcoin marketplaces.
The decentralized nature of Bitcoin sets no boundary limits, so investors can send and receive money in Bitcoin from anywhere in the world. It’s a cheaper option compared to the high charges you pay while sending money outside South Africa.
The COVID-19 pandemic has paralyzed many countries’ economies worldwide, and South Africa is no exception. With such a weakening economy, most South Africans resort to Bitcoin as it is not affected by a country’s economic status or political intolerances.
Where Can I Use Bitcoin in South Africa?
As more people adopt Bitcoin, they wonder where they can use it to meet their daily needs. South Africa has opened its doors fully to Bitcoin, so many merchants accept it as a payment method. The list keeps growing, but we have listed a few for you.
They include bidorbuy.co.za, Aphrodata, Bitrefill, Checkout, Future Light, Gotaclick.com, Modlito River Lodge, House of Sacks, NameCheap, Monstrance Digital Art studio, OkCupid, Shopify, The Blockchain Academy, TenBits, The Sun Exchange, and many more.
With the new regulations underway, we can only hope that they don’t limit Bitcoin usage across the country but promote their use. More places will accept Bitcoin, and that will make it easier for most South Africans.
South Africa has nine Bitcoin ATMs accourding to CoinATMRadar. It tops the list in Africa, as one with the most Bitcoin ATMs. They are distributed across the country in the four cities as follows.
Capetown – 4 BATMs
Pretoria – 1 BATMs
Durban – 1 BATMs
Johannesburg – 2 BATMs
Port Elizabeth – 1 BATMs
Most people use these ATMs to withdraw their Bitcoin in the form of Rands (ZAR), but there’s an option to deposit. However, investors shy off from the deposit option because of the high conversion rates (8% -14%).
The ATMs allow you to withdraw up to R5000 without any identification. If you wish to withdraw more, you will be required to fill out a KYC form for identification.
Summary - How to Buy Bitcoin in the South Africa Instantly
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