South Africa takes steps to regulate cryptocurrencies

The South African financial regulator has classed cryptocurrency assets as financial goods, according to a notification published in the government gazette on Wednesday, allowing for their regulation.

The Financial Sector Conduct Authority (FSCA) stated in the notice that crypto assets, which it defined as "digital representations of value," must be regulated in South Africa as of the date of publication.

The authorities have stated that they intend to implement regulations such as foreign exchange controls and licencing for crypto trading enterprises.

Since November of last year, the prices of new digital currencies and tokens have declined, leaving financial regulators around the world unsure of how to govern them.

Crypto assets are not issued by a central bank, but they can be electronically exchanged, transferred, and stored.

Deputy Governor of the South African Reserve Bank (SARB) Kuben Naidoo told Reuters in May that regulation of crypto assets was imminent and may be implemented within nine to fifteen months, after authorities announced they planned to do so in November 2020.

He stated that the SARB desired regulation of crypto assets to avoid theft, money laundering, and undermining of monetary policy because a pervasive cryptocurrency may undermine the central bank's authority.

"This was the first legal step that was required to bring the crypto asset industry within the South African legal framework," Easy Crypto's Brent Petersen said in a statement.

He noted that the statement would apply to crypto trading platforms as well as those that offer advise or act as intermediaries for buyers and sellers of digital financial assets.

By fLEXI tEAM