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It has been more than three years since SARS’s media statement on cryptocurrencies. In this statement, SARS said that it would apply 'normal income tax rules' to cryptocurrencies when assessing whether a gain is revenue or capital in nature, and that crypto assets are not seen as currency for income tax purposes.
On 20 November 2020, the Financial Sector Conduct Authority (FSCA) published a draft Declaration (Draft Declaration) and a statement in support thereof which sets out its proposal to bring crypto assets within the ambit of the definition of 'financial product' in Section 1 of the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act).
Cryptocurrencies, such as Bitcoin and Ethereum, have become well known for their volatile value. In contrast to this, 'stablecoins' are cryptocurrencies that have been specifically designed to have a stable value.
Boards and management teams are, or will soon be, compelled to consider the implications of the direct impact of cryptocurrencies on their businesses, and the potential indirect impact from several angles. In addition, there is considerable potential for new business models, which are starting to emerge in many areas.