Cryptocurrencies have taken the world by storm in the past few years and that has led to larger countries like Russia and China imposing bans on their trade.
While those superpowers flex their muscles to the detriment of various virtual currencies, emerging markets are starting to catch on to the wave and their governments and financial institutions seem slow on the uptake.
As a relatively young democracy, South Africa is one of those countries. Ongoing political dramas have hammered the South African rand and have led to recent credit downgrades- which has seen wealthy South Africans look to take their money out of the country.
No rules, no problem
Economist Dawie Roodt has warned other South African’s to do just that amid the recent political and economic instability in the country. Speaking to Cointelegraph, Roodt believes Bitcoin and other cryptocurrencies could be an easy way for South African’s to do just that.
Roodt said:
“It’s not necessarily a safe haven but it’s certainly a way of getting your money out of the country. The moment you buy Bitcoin, you internationalize your money. It’s not in South Africa anymore.”
What makes this more feasible for South Africans is the fact that there is almost no legislation on Bitcoin trade in the country.
“It’s in no-man’s land. There is no proper legislation, no real rules or regulations around these private currencies.”
The well-known economist also hit out at governments that have banned the use of cryptocurrencies and Blockchain, citing a lack understanding of the potential power the technology has.
Roodt said:
“Any country that bans Blockchain must be really stupid because it’s a new technology. It’s like going back 150 years and banning electricity. The issue here is not with Blockchain, it’s the creating of private currencies like Bitcoin. Those countries will be forced to allow Bitcoin, countries like Russia and China. The Japanese tried that; they banned Bitcoin only to rescind in the end to unban it. That is what will happen because it’s not practically possible to ban the flow of information. That is essentially what it is - the flow of information.”
Caught napping
Cryptocurrencies and Blockchain technology has really only come into the mainstream consciousness in the past few years and it has seen governments and financial institutions make knee-jerk reactions in response.
Roodt believes that will be the case in South Africa in the next couple of years.
“Most authorities globally simply do not understand this and in the case of South Africa, the politicians don’t have a clue. There are a few bureaucrats that know a little bit, like at the Reserve Bank. That is traditionally an institution that is well informed but even they are behind the curve. I don’t think the bureaucrats and politicians realize the shitstorm that is about to hit them. They are going to get caught with their pants down; they haven’t got a clue about the power of this technology and how it will change the way we live. SA is ideally positioned to capitalize and implement this sort of technology which will eventually put the power where it should be - and that is in the hands of the individual.”
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