Globally, although enjoying more mainstream publicity, cryptocurrencies or digital currencies are still very much unregulated. In South Africa, the South African Reserve Bank is conducting regulatory experiment; it is no longer a question of whether such currencies, including Bitcoin, should be regulated or not, but rather who will be doing the regulating.
Decentralisation is paramount in the ecosystem of cryptocurrencies and its strengths – the core principle is that no one institution or authority is responsible for the operation, function, or governance. This is in sharp contrast with any traditional banking system or currency.
Furthermore, Bitcoin has in May 2017 entered into a Bitcoin Scaling Agreement. This agreement set in motion the Bitcoin “fork” of 1 August 2017. According to Govender – “simply put, this was an agreement that the Bitcoin community would move to a separate, parallel currency to increase efficiency such as transaction times.” Furthermore, according to Govender, the scaling agreement has two very important lessons for the currency in South Africa – (i) how the decentralised network makes decisions, and (ii) where the decision-making power lies.
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