Electronic Theses and Dissertations (Masters)

Permanent URI for this collection

https://hdl.handle.net/10539/37939

Browse

Browsing Electronic Theses and Dissertations (Masters) by Author "Bahadur , Kiara"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    The Proposal for the Regulation of Cryptocurrencies in South Africa and the Possible Impact on the Financial Sector.
    (University of the Witswatersrand, Johannesburg, 2023) Bahadur , Kiara
    The global pandemic engendered a shift in traditional banking activities, forcing the banking and finance sector to adapt, due to technological advances, in the past few years. The pandemic conditions accelerated the demand for a digital banking environment and e-commerce transactions. The white paper titled “Bitcoin: A peer-to-peer electronic cash system”, authored by Satoshi Nakamoto around 2008, outlined the fundamental elements of Bitcoin. While describing the core elements of cryptocurrencies, it did not furnish a definition. The distinctive features of a centralised and decentralised exchange can discern what type of cryptocurrency individuals are dealing with.Once the type of cryptocurrency can be identified, the advantages and disadvantages can beevaluated. Advantages include the ease of entry, the increased efficiency of payments, anonymity, independence from third parties, and the lack of traceability. The disadvantages include untraceable transactions, anonymity, and increased speed of payment which can create an environment that is more conducive to being susceptible to illicit and illegal activities. Given the irreversibility of transactions and level of anonymity, holding wrongdoers accountable can be challenging. An assessment of the risks must be conducted, as not only is there a loss of direct contact with the client, but also a loss of a third intermediary which alters how the financial sector operates. To mitigate risk for individuals, this dissertation will explore preventative measures such as regulatory suggestions and KYC mechanisms. It further aims to examine the regulation of cryptocurrencies within South Africa, accessing its potential impact on the financial sector and highlighting the gaps in the regulatory framework. This dissertation will further focus on the legislative instruments such as the Financial Intelligence Centre Act No.38 of 2001, the South African Reserve Bank Act 90 of 1989, and the Financial Markets Act 19 of 2012. Additional consideration will be given to the African Reserve Bank Position Paper on virtual currencies, along with the Position Papers on crypto assets published by the Intergovernmental Fintech Working Group in 2020 and 2021. In providing comparative insights, this dissertation explores the regulatory approaches of the United States and China to elucidate potential strategies for effective regulation in South Africa and identify areas of improvement. Furthermore, it will employ qualitative research methods to explore the possible impact on the financial and banking sector