Bitcoin not a currency? South Africa to regulate crypto as financial asset
The South African Reserve Bank is set to introduce regulations next year that will see cryptocurrencies classed and treated as financial assets to balance investor protection and innovation.
Cryptocurrency use in South Africa is in a healthy space, with around 13% of the population estimated to own some form of cryptocurrency according to research from global exchange Luno. With more than 6 million people in the country having cryptocurrency exposure - regulation of the space has long been a talking point.
Companies or individuals looking to provide advice or intermediary services involving cryptocurrencies are currently required to be recognized as financial services providers. This involves meeting a number of checkboxes to comply with global guidelines set out by the Financial Action Task Force.
South Africa’s National Treasury budget review published in February 2022 formally introduced the move to declare cryptocurrencies as financial products. The state also plans to enhance the monitoring and reporting of cryptocurrency transactions to comply with exchange regulations in the country.
South African Reserve Bank deputy governor Kuben Chetty has now confirmed that new legislation will be introduced in the next 12 months, speaking in an online series hosted by local investment firm PSG on July 12. This will see cryptocurrencies fall under the scope of the Financial Intelligence Centre Act (FICA).
This is significant, as it will allow the sector to be monitored for money laundering, tax evasion, and terrorism financing which has been a heavily debated byproduct of the decentralized nature of cryptocurrencies and blockchains.
Related: South Africa finishes technical PoC for wholesale CBDC settlement system
Chetty highlighted
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