SARB allows local banks to serve crypto customers –
- The South African Reserve Bank has given permission to the local banks.
- The financial institutions can supply customers for cryptocurrency transactions.
The Central Bank of South Africa has ordered financial institutions in South Africa to provide customers who control cryptocurrency transactions.
In the regulation, the bank announced that institutions should not force an overall crypto ban, but asked banks to exercise due diligence while dealing with such customers.
This came after some banks in South Africa managed to close customer accounts linked to cryptocurrencies, citing the absence of adequate laws to govern the sector.
” Banks can act as a conduit for funds associated with crypto-asset service providers and can play an important role in customers’ desire to buy crypto-assets or receive payments for the sale of crypto-assets using fiat currency into their bank accounts. Banks must ensure that they maintain adequate records regarding transactions to the customers, which will also include fiat-to-fiat, fiat-to-crypto and crypto-to-fiat transactions,” the SARB stated.
Managing risks associated with crypto
In addition, banks have closed the accounts linked to crypto due to higher risk vulnerability. But the South African Reserve Bank accepted that some risks are associated with the crypto industry, but financial institutions need to plan a comprehensive assessment.
According to the governor of the central bank, risk management planning ‘doesn’t necessarily mean that institutions should try to ignore risk completely.’ the central bank pointed to banks that carry out due diligence on all aspects of money laundering and internal control.
Notably, many banks in the state had barred customers from using their credit and debit cards to buy crypto on foreign exchanges.
It is worth noting that South Africa is considered a large and important share of crypto investors, which affects various players who want to influence the market.
Governor’s support for crypto
Meanwhile, governors have confirmed a friendly attitude towards cryptocurrencies, analyzing the use cases of the sector. According to reliable media reports, the deputy governor of the SARB, Kuben Naidoo declared that the state is ready to introduce laws that will somehow support the sector and incorporate it into the financial space.
In addition, the South African Reserve Bank, together with the Intergovernmental Fintech Working Group, completed a joint proof-of-concept project that analyzed the law and administrative inference when launching distributed ledger technology (DLT).
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional money exchange systems. She is also fascinated by blockchain technology and its function.
