A Few South African Cents' Worth on Bitcoin

Nieman, Annamart

doi:10.4314/pelj.v18i5.25

Cited by 10 publications

(6 citation statements)

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“…Despite the growing body of research on online trading platforms, there is still lack of understanding about the impact of perceived security risk, perceived privacy risk, perceived financial risk and perceived fraud risk on investor trust as well as the intention to invest in online trading platforms in Africa. Precisely, within the South African context previous studies have conducted their studies in various contexts by focusing on the relationship between foreign direct investment and economic growth in South Africa (Masipa 2018); a few South African cents' worth on Bitcoin (Nieman 2015); the relationship between the exchange rate and the trade balance in South Africa (Chiloane, Pretorius & Botha 2014); responsible investing in South Africa (Viviers & Els 2017); familiarity bias among individual investors (De Vries, Erasmus & Gerber 2017) and a South African perspective on the investment performance of ethical funds compared to conventional funds and investor behaviour as regards ethical funds (Patel 2016). This shows that there is scant evidence of studies focusing on how perceived security risk, perceived privacy risk, perceived financial risk and perceived fraud risk impact investor trust and the intention to invest in online trading platforms in South Africa.…”

Section: Introductionmentioning

confidence: 99%

Navigating selected perceived risk elements on investor trust and intention to invest in online trading platforms

Maziriri

Mapuranga

Madinga

2019

J. econ. financ. sci.

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Orientation: In the contemporary global business environment, online trading is a new distribution channel and trading platforms are products of investment and financial services companies.Research purpose: This study determined the influence of perceived risk elements on investor trust and the intention to invest in online trading platforms among students at a selected university in South Africa.Motivation for the study: The significance of how perceived risk elements may influence an investor’s trust and the intention to invest in online trading has largely been overlooked in previous research. Therefore, the principal objective of this study was to address this research gap.Research approach, design and method: A structural equation modelling (SEM) procedure was applied to perform the hypotheses testing using the AMOS (version 25.0) package.Main findings: All the perceived risk elements had a positive and a significant impact on investor trust as well as the intention to invest in online trading platforms.Practical/managerial implications: This study provides fruitful implications to practitioners. The collective knowledge on dimensions of perceived risk will be advantageous to managers in understanding consumer risk perception and how students attempt to reduce these risks. Hence, this will also help managers to implement risk-reduction strategies in order to increase the prospect of students investing in their online trading platforms.Contribution/value-add: This study stands to add new knowledge to the present body of investment management and financial management literature in Africa – a context that has not received much research attention in developing countries.

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Section: Introductionmentioning

confidence: 99%

Navigating selected perceived risk elements on investor trust and intention to invest in online trading platforms

Maziriri

Mapuranga

Madinga

2019

J. econ. financ. sci.

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“…The Bitcoin is accepted as a means of payment by many retailers (Chuen, 2015; Nieman, 2015; Blau, 2017) and it is clear that the Bitcoin is a medium of exchange (Chuen, 2015; Franco, 2015). This is made clear by:…”

Section: Literature Review Taxation Themes and Formulation Of The Research Instrumentmentioning

confidence: 99%

“…2.1.4 Application. In addition to being used as a means of payment (Nieman, 2015;Blau, 2017), the Bitcoin is also used for investment purposes because its low correlation with other asset classes (such as bonds or shares) (Franco, 2015;Narayanan et al, 2016). Another side of this is trading off the volatility of the Bitcoini.e.…”

Section: R3mentioning

confidence: 99%

Taxation of the Bitcoin: initial insights through a correspondence analysis

Ram

2018

MEDAR

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Purpose The Bitcoin has experienced wide popularity in academic and commercial spheres during the years following 2012. Research has been conducted in respect of information technology, finance and reporting paradigms, but there has been little research into the taxation of the Bitcoin. The purpose of this paper is to present a conceptual approach for developing a taxation policy for the Bitcoin, using a multi-jurisdictional analysis. Design/methodology/approach An interpretive mixed-method approach is followed. The traits of the Bitcoin are determined through a review of the literature, followed by the determination of key taxation themes using a multi-jurisdictional view where the jurisdictions were determined using the largest Bitcoin exchanges. These form the row and column headings of the correspondence table research instrument, respectively. The correspondence table was completed by 40 tax experts. Correspondence analysis (a multivariate statistical technique) was then used to determine correlations between the Bitcoin traits and taxation themes, further used to present initial insights into developing a taxation policy for the Bitcoin. Findings The correspondence analysis reveals that, contrary to current tax laws, the manner of acquisition as opposed to the reason (intention) for acquisition is key in determining how the Bitcoin is to be taxed. For taxing purposes, Bitcoin is seen as being distinct from currency, given that transactions with the Bitcoin are seen as barter transactions. Finally, because of the unique characteristics of the Bitcoin, it is shown that exchanges and the Bitcoin need to be regulated in the same manner as a currency. Research limitations/implications This research focuses on income tax including capital gains tax and consumption taxes and was conducted with a sample of purposefully selected South African tax experts, given that the Bitcoin is experiencing enhanced popularity in South Africa. As a result, this research does not provide generalisable positivist conclusions and does not purport to represent the views of all tax practitioners. This paper does, however, provide an initial mechanism to develop taxation treatments for transactions not covered by existing legislation. Originality/value This paper is the first to provide normative recommendations on the taxation of the Bitcoin. Using correspondence analysis, this paper offers an innovative approach for developing taxation policies when a transaction is not specifically included in the extant legislation. Further value is added through the use of a third dimension in the correspondence analysis which enhances the exploratory potential of the research.

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“…See Internal Revenue Service "Notice 2014-21", 1, https://www.irs.gov/pub/irs-drop/n-14-21.pdf (accessed on 01 April 2019). 9 Nieman (2015Nieman ( :1981 explains: "VCs, similarly, are a proxy for value, can take on a variety of forms and are seeing use across the payment landscape (including air miles, credit card points, retail loyalty or reward points, coupons, bitcoins, litecoins, altcoins, free applications ("apps") and content, game-based and in-app VC purchases). Even time and personal data, when bartered to receive something in return, can be seen as VCs.…”

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confidence: 99%

“…12 For a discussion of the risks, see Financial Action Task Force "Virtual currencies key definitions and potential AML/CFT risks", 9-10; South African Reserve Bank "Position Paper on virtual currencies", 5-12, http://www.resbank.co.za (accessed on 13 April 2019); South African National Treasury "User alert: Monitoring of virtual currencies", http://www.treasury.gov.za/comm media (accessed on 13 April 2019). 13 See Ly 2014:587;Nieman 2015:1979. Breyer J, in Wisconsin Central Ltd v US (2018 585 US (21 June 2018):3, commented as follows about the changing face of money as remuneration: "perhaps one day employees will be paid in Bitcoin or other type of cryptocurrency".…”

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confidence: 99%

Cryptocurrencies: Do they qualify as “gross income”?

Moosa

2019

JJS

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This article argues that, for purposes of the Income Tax Act 58 of 1962, Bitcoin and cryptocurrencies operating in a like manner are incorporeal property with a comparable value in real currency. The fundamental basis for the advancement of the hypothesis that such cryptocurrencies give rise to protectable proprietary rights are: (i) the rights exist digitally in cyberspace; (ii) the rights have value to their users; (iii) the rights are capable of being owned as cyberproperty; (iv) the rights can be transferred electronically by a possessor of a unique public-private cryptography protected keypair, and (v) the rights can be proved by entries in a digital ledger that records the historical chain of ownership transfers. This article argues further that the average, fair market value of the cryptocurrency in South African Rands on the date of its receipt or accrual as a revenue asset must be included in a taxpayer's gross income. It is further argued that this value ought to be the average price of the cryptocurrency determined with reference to at least two pricing indices commonly used or accepted in the marketplace.

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A Few South African Cents' Worth on Bitcoin

Cited by 10 publications

References 0 publications

Navigating selected perceived risk elements on investor trust and intention to invest in online trading platforms

Navigating selected perceived risk elements on investor trust and intention to invest in online trading platforms

Taxation of the Bitcoin: initial insights through a correspondence analysis

Cryptocurrencies: Do they qualify as “gross income”?

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