Latest news with #SebagaMatabane
IOL News
4 days ago
- Business
- IOL News
South Africa's crypto market faces regulatory reckoning amid tax demands
The Financial Sector Conduct Authority introduced licensing requirements for crypto asset service providers under the Financial Advisory and Intermediary Services Act, aiming to strengthen consumer protection by classifying crypto assets as financial products. Image: Independent Newspapers/File AS South Africa's cryptocurrency sector hurtles through a turbulent regulatory and tax landscape, evolving rules and heightened scrutiny are forcing investors and service providers to scramble for clarity. As regulatory authorities tighten their grip, questions loom large: How do capital gains taxes apply to crypto disposals? What exactly are the obligations for those simply holding digital assets? While cryptocurrencies may not be legal tender, the SA Revenue Service (Sars) has made one thing clear — it is treating them as taxable intangible assets, triggering capital gains tax upon sale or disposal. The Financial Sector Conduct Authority (FSCA) introduced licensing requirements for crypto asset service providers under the Financial Advisory and Intermediary Services (Fais) Act, aiming to strengthen consumer protection by classifying crypto assets as financial products. Meanwhile, the Gauteng High Court's recent ruling on cryptocurrencies and exchange control regulations sparked significant debate, with the SA Reserve Bank (Sarb) appealing the decision and maintaining its stance that crypto is not legal tender. As the Sarb continues to shape its regulatory approach, crypto investors and service providers face ongoing challenges in adapting to this evolving landscape. Adding another regulatory layer is the Financial Intelligence Centre (FIC), which enforces anti-money laundering and counter-terrorism financing compliance, mandating registration and reporting duties for crypto providers. This dynamic regulatory environment seeks to balance innovation with investor safety and financial stability. To get more insight on this, the Sunday Independent spoke to Sebaga Matabane, the chief executive of a leading Crypto Firm as well as a derivatives and fintech expert. Matabane is also a recognised key opinion leader in Africa's fintech and digital assets space and an FSCA-approved key individual. She brings together deep regulatory insight, strategic foresight, and operational leadership. Sebaga Matabane is a derivatives and fintech expert and a recognised key opinion leader in Africa's fintech and digital assets space. Image: Supplied Sunday Independent (SI): How does the capital gains tax framework apply to cryptocurrency disposals for individual investors in South Africa? Sebaga Matabane (SM): When an individual in South Africa sells or otherwise disposes of cryptocurrency — whether by trading, converting to fiat, or using it for purchases — it triggers a capital gains tax (CGT) event. The first R40 000 of gains annually is excluded, after which 40% of the net capital gain is included in the individual's taxable income. For those in the top tax bracket, this translates to a maximum effective CGT rate of 18%. Timing and accurate record-keeping are key, especially as Sars sharpens its focus on digital asset transactions. SI: What are the tax implications for South African crypto investors who only hold their assets without disposing of them? SM: If you're merely holding crypto without selling, converting, or using it, there's no immediate tax liability — but that doesn't mean it flies under the radar. Sars requires all crypto holdings to be declared in your tax return, even if no taxable event has occurred. Think of it as financial transparency now, to avoid compliance issues later. SI: What licensing requirements does the FSCA impose on crypto asset service providers under the Financial Advisory and Intermediary Services (FAIS) Act? SM: The FSCA now defines crypto assets as financial products, which means any business offering crypto-related services — such as exchanges, trading platforms, or wallet providers — must be licensed as a Financial Services Provider (FSP) under the FAIS Act. This includes appointing approved key individuals, meeting fit and proper requirements, having compliant governance structures, and aligning with ongoing conduct obligations. The intention is to create market integrity, promote professionalism, and ensure consumer protection. SI: How does the FSCA's classification of crypto assets as financial products impact consumer protection in the crypto market? SM: This classification is a game changer. It brings crypto under the same protective framework as other financial instruments, enabling the FSCA to monitor and act against misconduct, misrepresentation, and unfair business practices. Consumers can now benefit from advice from licensed providers, recourse mechanisms, and better disclosure standards. It sets the stage for a more trustworthy and accountable market. SI: How is the SARB approaching the regulation of cryptocurrencies, given that they are not recognised as legal tender? SM: While the SARB maintains that crypto assets do not qualify as legal tender, it acknowledges their growing influence. Its approach is cautious but strategic: it collaborates with other regulators through the Intergovernmental Fintech Working Group (IFWG), explores use cases via sandbox environments, and keeps a close eye on systemic risk, monetary sovereignty, and exchange control circumvention. The Reserve Bank's messaging is clear: crypto is not a threat to ignore, but neither is it a form of money just yet. SI: What is the significance of the Gauteng High Court ruling regarding cryptocurrencies and exchange control regulations, and how might SARB's appeal affect this? SM: The Gauteng High Court's decision that cryptocurrencies are not subject to exchange control regulations has major implications — it effectively opens the door for freer movement of crypto across borders, which could impact capital flows, financial surveillance, and offshore structuring. However, the Sarb is appealing the ruling, signalling its intent to retain oversight. If the appeal succeeds, crypto flows may be subjected to stricter monitoring and reporting, reshaping how exchanges and OTC desks operate. It's a legal pivot point to watch. SI: What challenges do crypto investors and service providers face in navigating the evolving regulatory and tax landscape in South Africa? SM: The biggest challenge is regulatory ambiguity coupled with rapid change. Investors are grappling with complex tax reporting, unclear treatment of cross-border transactions, and a lack of practical guidance. Meanwhile, service providers must juggle licensing deadlines, AML/CFT compliance, FIC registration, and a mounting expectation of institutional-grade conduct — all while trying to remain agile and innovative. Ultimately, navigating this space requires a blend of legal foresight, tax expertise, and operational discipline. It is clear that the country's cryptocurrency sector stands at a critical crossroads, caught between the forces of innovation and regulation. Yet within this turbulence lies opportunity. The regulatory reckoning now underway could very well lay the foundation for a more secure, transparent, and mature crypto market. But success will depend on the ability of players to adapt swiftly, comply fully, and anticipate the next wave of regulatory evolution. In this high-stakes game of compliance and innovation, one thing is certain: the rules are being written — and those who understand them, shape them, or break them will define the future of crypto in South Africa, and Africa as a whole. Get the real story on the go: Follow the Sunday Independent on WhatsApp.
IOL News
04-07-2025
- Business
- IOL News
BlackRock's tokenisation: A game changer for Africa's financial systems
Sebaga Matabane is a seasoned financial executive and derivatives expert and the founding patron of the Give to Live Foundation, which supports abused women and children across Africa. Image: Supplied IN a landmark move earlier this year, BlackRock — the world's largest asset manager — launched its first tokenised fund on a public blockchain. With more than $100 million (about R1.7 billion) in US Treasuries issued via tokenised assets, this is not just a fintech experiment. It's a signal: the traditional financial system is moving on-chain. While this development unfolded in the halls of Wall Street and crypto exchanges in the US, its implications extend far beyond Western markets. In fact, for Africa — home to the world's fastest-growing youth population and one of the highest rates of mobile money adoption — this moment could be pivotal. What is tokenisation and why does it matter for Africa? Tokenisation refers to the process of converting rights to real-world assets, such as bonds, real estate, and fiat currencies, into digital tokens on a blockchain. These tokens can then be traded, transferred, or split into smaller units in a way that dramatically reduces friction, increases transparency, and enhances liquidity. For Africa, tokenisation is not just a technological advancement; it is a financial lifeline. Here's what this could unlock: Fractional Access to Global Assets — Africans can invest in U.S. bonds or real estate with as little as $10, removing the entry barriers created by traditional capital markets. Africans can invest in U.S. bonds or real estate with as little as $10, removing the entry barriers created by traditional capital markets. Digitised Government Infrastructure — Imagine local municipalities issuing tokenised green bonds to fund solar projects, attracting global investors via blockchain-backed transparency. Imagine local municipalities issuing tokenised green bonds to fund solar projects, attracting global investors via blockchain-backed transparency. Enhanced Remittance and Trade — Using tokenised stablecoins or assets, intra-African trade and diaspora remittances could be settled near-instantly with lower costs and greater reliability. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Why should South Africa lead this movement? South Africa, with its progressive regulatory approach and advanced financial sector, is perfectly positioned to become a tokenisation gateway for Africa. The Financial Sector Conduct Authority (FSCA) has already declared crypto assets as financial products, creating a precedent for regulatory innovation. However, the rise of on-chain finance via giants like BlackRock now demands bolder action: Establish a Regulatory Sandbox for Tokenisation — South Africa must launch pilot projects that test tokenised government securities, commercial real estate, and even township infrastructure bonds. South Africa must launch pilot projects that test tokenised government securities, commercial real estate, and even township infrastructure bonds. Develop Custodianship Frameworks — Safe, locally governed custodial solutions are essential to protect African investors and attract institutional confidence. Safe, locally governed custodial solutions are essential to protect African investors and attract institutional confidence. Expand Public-Private Collaborations — Crypto-native firms and traditional financial institutions must be encouraged to co-develop tokenised solutions that address African economic realities. What BlackRock has initiated is more than a fund — it's a preview of the future financial architecture. If Africa remains passive, it risks exclusion from systems being built without its input. Tokenisation can: Democratise investment Accelerate infrastructure finance Boost trade and cross-border payments Provide transparency in public finance However, this requires vision and leadership, not just in technology adoption, but in regulatory clarity, education, and public awareness.
