The Deputy Governor of the Reserve Bank of South Africa has been criticized for promoting misinformation about the use of cryptocurrencies. Kuben Naidoo had said that 90% of crypto transactions are used for illicit purposes.
Steven Sidley, South African professor and author of “Beyond bitcoin: Decentralized Finance and the End of Banks », said the information was all spiel and nonsense. He described Naidoo’s statements as headline-grabbing but based on misinformation. And that, according to Sidley, threatens the progress of a fledgling industry. Naidoo, speaking in a webinar in mid-July, said cryptocurrency regulation in South Africa was 12 to 18 months away. He stressed that the central bank will treat cryptocurrencies as assets rather than currency, and will prioritize investor protection in regulation.
However, the professor estimates that only 0.15% of cryptocurrency transactions have a criminal element. Sidley said 5% of fiat currency transactions are actually done for criminal reasons. It is almost 50 times more than crypto. He pointed out that the public nature of blockchain transactions negates the likelihood of a criminal transaction going unnoticed. Sidley added that money used in fiduciary crime is often more difficult to trace, and pointed to recent leaked Panama documents that reveal the financial maneuverings of several individuals and companies around the world.
He also criticized the decision to regulate crypto-like financial assets, saying the central bank wanted to squeeze crypto assets into archaic asset regulations written for older financial instruments such as stocks, currencies and commodities. .