Faculty of Commerce, Law and Management (ETDs)
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Item 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, AndrzejCrypto 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 TaxItem Essays on cryptocurrencies and traditional assets in emerging market economies: dynamic modelling, connectedness, and spillovers(2021) Omane-Adjepong, MauriceThe last decade has experienced notable changes and unique innovations in the global financial system. In particular, the introduction of cryptocurrencies, pioneered by Bitcoin and later other alternative coins (best known as altcoins) by libertarian cryptographers after several efforts in the 1990s to usher in electronic currencies foundered, has been lauded and likewise received enormous attention worldwide, raising many concerns for governments, monetary authorities and other regulatory bodies. Originally designed as electronic cash for decentralised peer-to-peer online financial transactions, secured by cryptographic algorithms, cryptocurrency, a specialised kind of digital currency, in barely a decade of existence, is challenged with an identity crisis. The debate as to what cryptocurrency is, or has become looms in the minds of the general public, and it has been the subject of media commentary. At the same time, the limited amount of research on the topic has only raised more questions than answers. For instance, not only are the existing studies not attacking the root of the deepest questions posed by the rise of cryptocurrencies to date, but also they are not robustly studied methodologically. The depth of analysis is shallow, and the scope of the studies published on the subject matter so far is very limited, both in space and time. Additionally, the extent of the relatedness of the new digital currency market to traditional assets, especially in frontier and emerging economies remains a virgin field. This naturally raises additional concerns: does the emergence of cryptocurrencies offer any relevant economic benefits to these emerging market economies? What implications does this evolution hold for established financial systems? Answers to these questions, and many more are crucial for monetary policy effectiveness, legislation and regulation, financial system stability, the future of cryptocurrencies, and overarchingly, to illuminate the blind spots of the enthusiastic libertarian public, as well as the general investor community. In light of the above, this thesis makes a bold attempt at addressing some of the weaknesses of extant research, extend the frontiers of knowledge in this new financial instrument, and shed insights on cryptocurrencies in emerging market economies, proxied by those in the G20. The study produced interesting juxtapositions in three essays. The first essay examined the evolving characteristics of cryptocurrencies under five sub-themes, and presents a map for analysing the cryptocurrency market. We find that Bitcoin and the largest long-lived altcoins are collectively unique instruments that share features of paper money, security assets (mostly equities), and commodity money (such as gold and oil), making the digital currencies a “trinity-hybrid” financial instrument which could best operate under the private sector to complement emerging currencies and assets. For emerging market economies, cryptocurrencies, in our view, is a three-in-one financial instrument, if and only if its role is limited to exchange of goods and services, and helping facilitate transactions of various kinds. This, in turn, raises a number of possibilities for recalibrating the current financial architecture while addressing the regulatory changes that ought to be in place for a well-functioning diversified economy. The second empirical essay found evidence in favour of an extremely weakly correlated market, and later, multifaceted economic benefits of cryptocurrency in times where emerging market economies’ assets wander in distress. This positions the new currency market to the advantage of heterogeneous groups of emerging market investors. However, we caution that expectations of such derived economic benefits need to be examined further on a case by case basis, and in a measured manner, especially given that the cryptocurrency market is still at its embryonic stages of evolution. The third and final essay allays the fears of investors and market participants, and reveals for the first time that the cryptocurrency market is less influenced by existing highly integrated instruments, and has little effect on emerging markets, and consequently pose, for now, a negligible danger. At their current level of development, some economies are not yet exposed to the variety of developments in the world of electronic commerce and payment systems that make the algorithms that power the peer-to-peer decentralised ledger platforms seamless. This may change in the future. For now, we are sure that the coming into being of cryptocurrencies is an inevitable consequence of the financial sector paradigms of the last few decades, however, the distributional consequences across regions, countries and among different market participants are largely asymmetric. The insights gleaned from this study, therefore, open doors for policymakers to properly fine-tune their economies to maximise the upside potential presented by this asset class and minimise the downside risks, in the light of what has been learned about the role of cryptocurrencies so farItem An application of goal programming model to a bank balance sheet management(2021) Chiwandire, Denise D MThe research presented the application of a goal programming model to the balance sheet management of South African Banks in segmented markets based on multiple goals such as asset accumulation, total liability, shareholders wealth, profitability, earnings and total goal achievement. The significance of the study can measure the effectiveness of policy decisions and plan future investments effectively. The model determined the optimal structure of the balance sheet based on the fulfilment of strategic objectives. Data collected from annual financial reports covered the period 2011 to 2019. The solutions showed the achievement of all goals and possible improvements in target values for optimization