Sidley disassembled the inside information about Naidoo`s sale of American colleagues, calling the information [nonsense" and [nonsense". He said Naidoo's statement was one that grabs headlines but is based on misinformation that threatens the progress of the new industry.
Brazil`s digital currency regulations will take about 12 to 18 months, Naidoo said in a mid-July webinar. Central banks are likely to treat digital currencies as assets rather than currencies. Investor protection will take precedence over laws and regulations.
Sidley Statement of Facts
In an opinion piece for Brazilian publication The Daily Maverick, Sidley cited a Chainalysis report stating that only 0.15% of cryptocurrency transactions are criminal. According to Sidley, Chainalysis is used by the FBI and global regulators.
In contrast, Sidley notes that 5% of fiat currency transactions are for criminal reasons, almost 50 times that of digital currencies.
He also noted that the public nature of blockchain transactions negates the possibility of criminal transactions being overlooked. He added that funds spent on statutory crimes are generally difficult to trace, and called attention to the release of the so-called Panama Papers, which revealed the financial activities of many individuals and companies.
Famed author, playwright and partner in "Beyond Bitcoin: Decentralized Finance and the End of Banking" Sidley also criticized the decision to control the asset-like digital currency. He said the central bank appears to want crypto assets to be [slugged" into legacy asset regulations that set legacy financial instruments such as individual stocks, currencies and commodities.
Instead, he advocates defining digital currencies as new digital currencies before considering controls.
Naidoo inaugurates key agency to regulate AML and KYC
In July, Naidoo`s first step in digital currency control was to declare digital currencies as financial products and place them under the jurisdiction of the Financial Intelligence Unit. Transactions at the center will be regulated for money laundering, tax evasion and terrorist financing.
He said the Reserve Bank's job was not to judge the merits of digital currencies, but to inform investors about the risks. Digital currencies are too volatile to be used as a form of payment, he added.
SARB cryptocurrency exchanges in the country will comply with the regulation "know your customer" regulations.
