FinTech CEO: SARB encryption regulation is a good start, but probably incomplete
The The South African Reserve Bank (SARB) announced plans to start regulating cryptocurrencies in 2023, treat them as financial assets instead of as currencies. News came from SARB’s Deputy Governor Kuben Chetty via dialogue in a web series organized by PSG. The legislation will allow the listing of digital assets under FICA to regulate the sector.
“One of the biggest benefits here? Exchanges will be forced to collect KYC data from users. The implementation of a KYC program is low-hanging fruit in the digital asset space. It’s one of the easiest ways to make trading cryptocurrencies and other digital assets more secure, and keep assets away from terrorists and other bad players, says Richard Gardner, CEO of Modulus, a US-based developer of ultra-high performance. trading and monitoring technology that drives global stocks, derivatives and digital asset exchanges.
“MiCA, passed through the EU, has been an important catalyst for countries around the world to embark on their own regulatory regime. Countries that had taken a wait-and-see approach to regulation, including South Africa, the United States and the United Kingdom, now look I think it’s likely because they do not want to relinquish regulatory authority to the EU. Although the EU could not impose regulations outside their jurisdiction, without any competing regulations, it can be taken as the gold standard. the countries now say: ‘Wait a minute – we will also be included,’ ‘Gardner explained.
“While it is unlikely that we will see an international regulatory regime, I think it is quite likely that global nation states will see the wisdom in coming together to set regulatory expectations that have common features. They will want to play, for the most part, following the same set of rules, so the EU has really tracked their interest in this area, Gardner said.
“South Africa has an oversized influence here because the country has a significant part of the population, estimated at about 13%, invested in digital assets. Beyond that, the blockchain movement has really started to infiltrate industries across the board. Traditional finance has begun to invest in space. So, there are really a lot of requirements for common sense, Gardner said.
Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has delivered its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a customer list that includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo! , Microsoft, Cornell University and the University of Chicago.
“However, I think the industry as a whole needs a lot more attention than just AML and KYC regulations. It’s a place to start. It’s a minimum. It will make the industry safer, but the industry can really use other guidelines, especially when it comes to stock exchanges and assets. Stock exchanges and managers continue to spread the news of hacks and other abuses. In some cases it is due to a poor technological infrastructure that simply asked to be broken. employees failed to use best practices in security. Self-regulation has obviously not worked as well as many had hoped, so it is long overdue for the government to fill the void and define exactly what is expected of stock exchanges and managers, given the assets they are expected to to protect, Gardner said.
