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.
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