> This is a fairly recent “announcement” and many people are upset about the Reserve Bank making up seemingly hostile and uninformed rules regarding something that has no notion of borders and is practically impossible for the regulators to control in terms of owning and transferring. Something that arguably does not even exist in any one location...
Actually it's pretty simple. By "owning" Bitcoins, you own money/capital. But it's in the "blockchain", or alternatively, the possession of such money happens inside South Africa. Once you do a transaction that transfers that capital (or the power of control of such capital) outside of South Africa (ie: a foreign exchange), you are breaking the law. If you are sending it to another friend in South Africa, you should be fine. (ps: Just reading into the substance of such a law, why it was made, I'm not a lawyer and this is not a legal advice).
> And by the way, this exact rule is the reason many South African startup founders incorporate in Delaware instead of locally, because it is extremely difficult to attract foreign investment if the investors know they will not be able to get the return on their investment (or share of the IP) out of the country again. It essentially turns our country into an economic Black Hole.
All these Entrepreneurs are breaking the capital AND the fiscal laws of the country. Since I assume they won't report their holdings (because of the capital controls).
> First of all, we are dealing here with existing (very old) legislation that is fairly unique to South Africa. No “new rules” have been made. Not many countries deal with the type of restrictive exchange controls we have, in fact this specific clause was promulgated in 1961.
Most countries do have controls on the "transfer" of capital outside of a country border. (or into the country too). But since you are using the banking system, you do not notice such regulation.
> Anyway, the Reserve Bank is now in a position where it must either continue supporting a 60 year old, unenforcable rule, or focus on updating legislation to align with 2021 realities.
The thing is, countries have a payment balance. They put these rules because they usually have a few big export companies (usually natural resources) or tourism. Allowing these companies to take their money out, will destabilize their balance of trade. They could ignore the crypto-kids (their size is negligible for now), but they can't afford a loophole for the system. And for that reason, the law is unlikely to get patched.