South Africa’s financial regulators have announced the groundwork for the “phased and structured” regulation of cryptocurrencies. The move presents a reversal of the largely hands-off approach taken for the past seven years. It has been driven by increasingly high levels of retail interest in cryptocurrencies in the country. Several countries are working actively to regulate cryptocurrencies. South Africa’s Intergovernmental Fintech Working Group published a paper laying out a roadmap for regulating crypto.
Financial regulators plan on introducing a regulatory framework for crypto-asset service providers.
In a position paper published on June 11, the South African Intergovernmental Fintech Working Group, or IFWG, under the aegis of the Crypto Assets Regulatory Working Group, laid out a roadmap for introducing a regulatory framework that will center on crypto asset service providers or CASPs. Hitherto South Africa’s initial national policy towards crypto has been one of wariness but also noninterference. Back in 2014, the National Treasury issued a public statement dedicated to the issue, together with the South African Reserve Bank and the country’s financial regulator and financial intelligence and tax agencies, warning the public that they could trade crypto at their own risk and would be offered no legal protection or recourse in case of difficulties.
Crypto interest has increased among the African population.
The financial regulator’s new paper emphasizes that even though a structured regulatory framework is set to be phased in, crypto-assets remain “inherently risky and volatile,” and the prospective financial losses incurred by crypto trading activities remain high. Many from the crypto community have claimed that African countries will play a huge part in getting bitcoin a wide acceptance. Alongside the published paper, IFGW issued a press release outlining its strategy, which gave space to its concerns about the nature of the asset class and surrounding ecosystem.