DigiMag Glacier_Q4_2017 - Page 14

TECHNOLOGY can all see details of the diamond’s origins, and when and where the diamond was lost or stolen, combatting short-term fraud. Smart contracts can automate processes and payments. • Syndicated loans Syndicated banks can significantly reduce the complexity and efforts required to comply with local taxation and regulatory rules. Local disbursements are accounted for in the distributed ledger. This enables real-time reporting and allows multiple users to simultaneously hold accurate records updated in real time. • Proxy voting As a shareholder, you can vote on a resolution via the blockchain without being present in the meeting. In addition to the secure nature of the blockchain, it avoids fraud, manipulation and mistakes. Votes submitted electronically require manual intervention in capturing the data, introducing risks. • Digital identity The blockchain is immutable and tamper-proof, so you can safely store your identity on it. You can then give your bank permission to see your ‘know-your-customer’ details on the blockchain. Civic and Consent, two blockchain start-ups, can authenticate and verify your identity on the blockchain – with your permission. Tax implications for bitcoin in South Africa ‘Transactions or speculation in bitcoin is subject to the general principles of South African tax law and taxed accordingly,’ SARS says. This applies to income generated from trading cryptocurrency. Owning bitcoin may be regarded as an asset and if you hold bitcoin as an investment, capital gains tax (CGT) may be applicable at the disposal of this asset. SARS has not, to date, specified the tax requirements for specific bitcoin-to- rand transactions. In the USA, only 8 000 people have declared bitcoin as an income since its inception. As a result, Coinbase, one of the biggest digital asset exchanges in the world, has been taken to court by the Internal Revenue Services (IRS), forcing it to reveal its records for all users between 2013 and 2015. R