South African Crypto Platforms Should Licensed By 2023

Cryptocurrency financial companies in South Africa will be licence between June 1 and Nov. 20, 2023, to legalize it, the country’s financial conduct regulator said on Thursday.

“It was declared on Wednesday that crypto assets are financial products does not mean that they are legal tender, head of the Financial Sector Conduct Authority’s Eugene Du Toit, Regulatory Frameworks Department,” said at a press conference.

“We are not legalizing crypto assets,” Du Toit said. “We are not giving credence to crypto assets.”

Financial agencies around the world have been grappling with how to regulate the growing number of digital cryptocurrencies and tokens, the prices of which have fallen from historic highs reached in November last year.

“The FCSA deliberately referred to crypto assets rather than cryptocurrencies, as regulators do not believe they qualify as currencies,the declaration will enable authorities to reduce scams and protect customers, having previously had no power to do so“, said the regulator’s head Unathi Kamlana.

The declaration and regulations to follow could help South Africa avoid being ‘greylisted’ by global agency the Financial Action Task Force, having deficiencies in its regime against terrorism financing and money laundering, the regulators.

South Africa’s central bank governor said in August that the country was at risk of being greylisted, which IMF researchers said last year reduces capital flowing into the country by an average of 7.6% of GDP.

Further regulation on financial institutions’ exposure to crypto assets is likely, as well as possibly more customer verification requirements.

“South Africa is actually amongst the few (countries) that’s ahead of the curve in this space,” he said, when asked whether regulators had been slow to respond to the boom in interest in crypto assets in recent years.

Reuters/Oyenike Oyeniyi