South Africa to introduce new regulations on cryptocurrency

The South African Reserve Bank plans to introduce new regulations on cryptocurrency transactions in the country within the next 12-18 months, Kuben Naidoo said.

Naidoo said in PSG’s latest ThinkBig webinar that South Africa is on par with other countries in terms of cryptocurrency regulation, but the first hype surrounding digital currencies and technology has recently declined.

Business Tech Africa understands that he added that most central banks around the world are not only currently focusing on the regulation of the broader crypto ecosystem, but also learning from it and seeing how it can be used. He added that it is important to separate real technological advances and potential payment system improvements from “hype”.

“We are not intent on regulating it as a currency as you can’t really walk into a shop and use it to buy something. Instead, our view has changed to regulating (cryptocurrencies) as a financial asset. There is a need to regulate it and bring it into the mainstream, but in a way that balances the hype and with the investor protection that needs to be there.”

Naidoo stated, the first step is to make sure that the cryptocurrency is declared as a financial instrument. In short, cryptocurrencies are under the jurisdiction of the Financial Intelligence Center (FIA) and are monitored for money laundering, tax evasion and terrorist financing activities.

SARB also plans to develop a regulatory framework for exchanges in South Africa to enable cryptographic lists. This includes traditional banking regulations such as Know Your Customer (KYC) rules and exchange management regulations.

“Whether it goes up or down is not the question here – the job of the central bank is not to pick winners and losers in an investment race. Our job is to regulate something so that people have an adequate ‘health warning’ – but crypto is far too volatile to be used as a payment space.”

By Business Tech Africa Staff Reporter

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