South Africa’s top financial watchdog is all set to introduce cryptocurrency regulations early next year. The regulator believes that scammers are taking advantage of the vulnerable investors and running off with millions of dollars since the investors have no avenues for recourse. South Africa has been one of the continent’s biggest cryptocurrency markets, topping the list alongside Kenya, Nigeria, and Ghana. South Africa ranked first globally for the proportion of Internet users who own digital currencies at 10.7% a few years ago.
South Africa to soon regulate the crypto industry.
Currently, the crypto industry is still largely unregulated in South Africa. The lack of regulations has allowed multi-million dollar scams such as Mirror Trading International and Africrypt to thrive. This is about to change, Bloomberg reported. Speaking to the media outlet, Unathi Kamlana, the Financial Sector Conduct Authority (FSCA) commissioner, said that the watchdog has been working on regulations for the sector, which it intends to unveil in early 2022. The FSCA has been working with its peers in other countries and local authorities such as the Financial Surveillance Board to formulate the regulations.
“We must be very careful to not just legitimize cryptocurrencies.”
“What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky. We must be careful not to just legitimize them,” Kamlana said. Aside from putting measures in place to protect investors from potential scammers or sophisticated products that put their money at risk, the regulator is looking to examine how digital currencies interact with traditional financial products. It’s also investigating whether they threaten fiscal stability in the country whose economy is the second-largest in Africa.