SARB will introduce crypto regulation
The South African Reserve Bank (SARB) on Wednesday announced plans to introduce a regulatory framework for cryptocurrencies, Kuben Naidoo, the deputy governor of the central bank, revealed.
After years of a soft stance that it would not regulate the crypto industry, the Central Bank of South Africa has changed its mind by working to establish a regulatory framework for managing digital asset transactions.
In an online seminar entitled: ‘The future of money, banking and crypto’, organized by the financial services company PSG Konsult Ltd, Naidoo said: “Our view has changed and we are now looking at it. [cryptocurrency] as a financial asset and we hope to regulate it as a financial asset. There has been a lot of money flowing in, and there is a need to regulate it and bring it into the mainstream. “
The Deputy Governor stated that the regulatory framework for the use of cryptocurrencies will play a crucial role in ensuring investor protection and trust and creating a more secure crypto ecosystem in South Africa.
“The use of crypto for money laundering and other illegal activities is a source of concern. “90% of transactions involving cryptocurrencies in the United States are for the purchase of opioids or gambling tokens,” Naidoo emphasized.
The leader mentioned that although regulations may take 12 to 18 months to see implemented, some Know-Your-Customer (KYC) rules and licenses for exchanges will be enforced much sooner. He said that the central bank is close to completing the currency control rules and requirements.
Naidoo also revealed possible plans by the central bank to issue a national central bank digital currency (CBDC). He stated that the regulator is currently conducting research and experiments on a CBCD project.
Digital way forward
South Africa is one of the top 10 countries for cryptocurrency adoption in Africa, according to a recent report from Chainalysis, a blockchain data platform.
The cryptoregulatory landscape in the country is still in a state of uncertainty. Although regulators such as the central bank and the Financial Services Conduct Authority (FSCA) have not yet implemented any regulations, the sentiments of these agencies against cryptocurrencies have evolved.
Some regulations are now not expected so far in the future. Such movements have been triggered by the growing concern for customer protection in the wake of the country’s $ 4 billion in cryptocurrency fraud.
Regulation in the crypto industry is crucial to ensure that the new technology becomes mainstream and lays the foundation for developing key relationships, for example with banking institutions.
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