Faculty of Commerce, Law and Management (ETDs)

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    Antecedents of blockchain adoption by South African listed companie
    (University of the Witwatersrand, Johannesburg, 2022) Mbeki, Luyanda; Boris, Urban
    Blockchain technology is not a new concept, it was first introduced in 1991 by Stuart Haber and Scott Stornetta and made popular more than a decade ago by Satoshi Nakamoto (a name not yet verified if a real person or pseudonym) as a crypto trading platform. However, the technology has not enjoyed much success in the corporate environment. This study seeks to gain a deeper understanding of the failure of South African corporates to embrace this technology by studying the “Antecedents of blockchain adoption by South African listed companies”. Although the technology has been around for decades, one argues that it is not a revolutionary or disruptive technology as it finds very limited adoption in the corporate space. Due to its high degree of scientific and technical novelty, it is considered radical technological innovation. Therefore, the sub-objective of the study was to investigate to what extent organisational context, individual context and innovation context influence a decision to adopt blockchain technology. This was a cross-sectional study that adopted a comprehensive theoretical framework; Technology-Organisation-Environment (TOE), Technology-Acceptance-Model (TAM) and Diffusion-Of-Innovation (DOI) to unpack blockchain adoption and followed a quantitative approach. Organisational context which is part of TOE was measured by top management support and technology readiness, while individual context which is part of TAM was measured by perceived ease of use and perceived usefulness and lastly, innovation context which is part of DOI was measured by relative advantage. Due to the highly technical nature of the technology, the study focused on the general opinions of employees who work in South African listed companies, specifically decision-makers (managers, senior managers, executives) and subject matter experts (IT professionals). The primary data was from a sample size of 71 which was collected using self-administered questionnaire adopted from scholarly papers. Many statistical analyses such as Pearson’s correlation, regression, ANOVA, and t-tests were conducted. The study noted that the null hypotheses predicting that organisational context and individual context will positively influence the adoption of blockchain technology were rejected. Moreover, III because the hypotheses were rejected and therefore the relation was of no significance. The extent of the influence of organisational and individual context and the interpretation of the variables in the equation could not be explained. However, the study failed to reject the null hypothesis which predicted that the innovation context will positively influence the adoption of blockchain technology. This finding can be attributed to the distinct features of the blockchain technology providing relative advantage such as data transparency, efficiency and security
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    Blockchain technology and international money transfers into the Nigerian Remittance market
    (University of the Witwatersrand, Johannesburg, 2022) Bah, Aicha; Khumalo, John
    Blockchain has been making a buzz for a moment now. The nascent industry based on a “distributed ledger technology” is being globally explored especially by innovative start-ups and financial institutions looking to benefit from the technology. Revolutionized by the usage of cryptocurrencies in its processes, blockchain algorism is believed to have the potential to indubitably agitate the financial world. The promises of blockchain pretty much touch any domains imaginable provided the necessary resources are allocated towards its implementation. From governmental tools in election processes to individual peer-to-peer transactions, blockchain is being targeted by various parties seeking to extract the obvious advantages, the technology offers. This study focuses on how blockchain technology can benefit the Nigerian remittance market and observes how it has the potential to completely reinvent the financial and money transfer industry. Peer to peer money transfer methods have traditionally been done through financial institutions such as a bank or Western Union. In many regions around the world, especially on the African continent, the charges related to these transfers represent a high cost for the individuals performing them. Additionally, the regulations and required verifications on each step of an operation account for longer processing time. The main objective of this research is to explore an alternative financial solution for cheaper and more efficient remittance transactions internationally. The method used is a combination of desk research and qualitative field research that involves preliminary research on information already available about Blockchain technology, but also interviews with expert on the financial world. This research concluded that Blockchain technology and the use of cryptocurrencies into everyday transactions represents a real chance at entirely transforming the way individuals exchange money. A few limitations were observed in regard to regulations and control over its functioning. Either way, it is expected that both governmental entities and private corporations will lean towards exploring the “true” capabilities of this technology
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    Cryptocurrencies and the Risks of Money Laundering and Terrorist Financing: Proposals for a Regulatory Regime
    (University of the Witwatersrand, Johannesburg, 2023) Masuku, Owen Jabulani; Kawadza, Herbert
    Rapidly emerging new technology and payment methods are gradually replacing traditional payment methods and sovereign legal tenders as viable substitutes in the global economy. The emergency of cryptocurrencies on the world’s economies has brought with it excitement, frustration, and uncertainty in equal measures. Cryptocurrencies are decentralised convertible virtual currencies that rely on the use of blockchain technology and the math-based peer-to-peer reference without the reliance on a central controlling authority to administer, monitor, regulate and exercise oversight control. Cryptocurrencies offer many potential benefits, such as speed of payment settlement, reduced costs of doing business, speedy cross-jurisdictional reach, and accessibility, as well as the anonymity of the users compared to the traditional payment methods. The integrity of the financial systems is at danger due to these same benefits and advantages. The risks and dangers of money laundering, terrorist financing, fraud, tax evasion, and other unlawful actions are associated with cryptocurrencies. The first cryptocurrency, Bitcoin, was created in 2008. The internet and globalization have allowed cryptocurrencies to enter South Africa. These currencies are not accepted as legal money in the South African legal system at this time. The objective of this desk-top research is to consider, amongst others, the following: what cryptocurrencies are, why cryptocurrencies are a Money Laundering and Terror Financing (ML/TF) risk, the red flags in ML/TF through cryptocurrencies transactions, structural and regulatory weaknesses associated with ML/TF through cryptocurrencies and the recommendations for structural and regulatoryenhancements and changes to combat the ML/TF risks from cryptocurrencies. This thesis recommends the need for regulatory intervention in South Africa. It argues that there is a need to regulate cryptocurrencies through the amendments to the relevant legislations such as the Financial Intelligence Centre Act, the Consumer Protection Act, Financial Advisory and Intermediaries Act, amongst others
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    Understanding the attributes and characteristics of cryptocurrency ownership: A South African study
    (University of the Witwatersrand, Johannesburg, 2023) Jetha, Hesita; Brahmbhatt, Yogesh
    Background: This study investigates the attributes and characteristics of cryptocurrency investors in South Africa and the attributes of cryptocurrencies that drive investment or non-investment. Objectives: This study aims to explore the demographics and sociodemographic factors of cryptocurrency investors as well as the emotions and biases that impact investors’ decisions to invest in cryptocurrency in order to investigate the individuals who invest in cryptocurrency and the reasons why they invest in cryptocurrency. Methods: A sample of 298 South African residents aged 18 and above completed an online survey that assessed their cryptocurrency ownership, demographics, motives for investment, attitudes toward cryptocurrency, and other relevant variables. Descriptive statistics and logistic regression analyses were conducted to examine the relationship between these variables. Results: The results showed that cryptocurrency investors are more likely to be males, under the age of 35, who are currently employed and have higher income levels. The individuals’ main motives for investing in cryptocurrency were the opportunity to obtain high returns and the new technology that cryptocurrency encompasses. In addition, the results showed that attitudes toward cryptocurrencies significantly impact their decision to invest in cryptocurrency. Conclusion: These findings suggest that more information relating to the risks involved in cryptocurrency investment as well as the potential of cryptocurrency to be used as a medium of exchange is required among individuals to protect themselves against losses and simultaneously allow them to take advantage of the lucrative benefits that cryptocurrencies offer. Furthermore, policymakers, the government, and businesses require more information regarding cryptocurrencies in order to have the necessary policies in place and to stay competitive
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    Reconsidering the debate relating to the proposals for the regulation of cryptocurrencies in South Africa
    (University of the Witwatersrand, Johannesburg, 2023) De Sousa, Michaella Alexandrine; Kawadza, Hebert
    Words cannot express my gratitude to my supervisor, Professor Herbert Kawadza for his vital patience and feedback. His guidance and vast knowledge in commercial and banking law was the main reason I hoped to have him as my supervisor for the completion of my LLM Research Report, without him I would still be lost in my drafting. I am extremely grateful for the guidance and encouragement of my two very close colleagues and mentors, Daven Dass and Alicia Raymond, their encouragement and conversation pushed me through writer’s block and self-doubt. I certainly could not have undertaken this journey without my strong support system and the most important people in my life, my father, Rui de Sousa; my sister, Claudia de Sousa; and partner, Nicholas Elliott. Their belief in me and ongoing patience in reading and rereading every iteration of this LLM Research Report will always be appreciated. This degree would never have been completed without them. As the adage goes, I am because they are, and I will always be indebted to them. Lastly, this LLM degree is for my late mother, Carla de Sousa, without her guidance and belief I would not be where I am now, and I will always be grateful to her
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    The tax implications of crypto assets as per the income tax act 58 of 1962 from a South African perspective
    (University of the Witwatersrand, Johannesburg, 2022) Marek, Andrzej
    Crypto assets have characteristics akin to those of virtual and financial products. They are currently utilised in payment transactions, financial instruments, investments, and corporate coupon bonds1 (The World Bank, 2017; HM Treasury et al., 2018; FCA 2021). These types of assets can be thought of as intangible digital assets whose creation, sale, or transfer are controlled by cryptographic technology and are shared electronically via a distributed ledger (Bartolucci & Kirilenko, 2020). Crypto assets are purchased for different reasons, such as speculative investing (a perceived increased future value), as a medium of exchange in facilitating transactions for goods and/or services, or for access to specific products, services, and utilities (Intergovernmental Fintech Working Group, 2021). Guidance on crypto assets issued by the Financial Conduct Authority of the United Kingdom (Financial Conduct Authority of the United Kingdom, 2019) categorises crypto assets into three different classes, namely Utility, Security and Exchange Tokens. The report aims to gain a comprehensive understanding of the commercial and economic substance of crypto assets and use this as a guide on how crypto assets should be taxed from a South African perspective. Further to this, the report analyses the separate classes of crypto assets available to taxpayers, namely, asset backed tokens, utility tokens and security tokens, and provides insight into the tax treatment of these specific classes. South Africa has adopted a stance in which the tax implications are dependent on the intention of the taxpayer. If the taxpayer regularly sells crypto assets, the presumption is that the taxpayer’s intention is to make a trading profit and taxable as a revenue profit (Haupt, 2022), whereas, if the taxpayer neither sells, exchanges nor spends the crypto asset, the indication is that taxpayer is holding it as a store of value and therefore as a capital asset (Haupt, 2022) and this is subject to Capital Gains Tax
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    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