South Africa cryptocurrency regulations are underway, and reports inform that a draft of the policy position paper on crypto assets has been published by the Interdepartmental Fintech Working Group (IFWG).
The working paper suggests that if the cryptocurrency proponents are adamant that cryptocurrency is the future money, then it is imperative to treat it like money. Moreover, those who deal with the investment and exchange of cryptocurrency should be treated as the financial service provider. IFWG comprises of South Africa’s Reserve Bank, National Credit Regulator, Financial Sector Conduct Authority, South Africa Revenue Service and Financial Intelligence Centre and National Treasury.
South Africa cryptocurrency regulations
The South Africa cryptocurrency regulations proposal working paper comes after the news of US$135k scam recent scam. The proposal aims to significantly reduce the anonymous transactions in cyberspace by creating a regulatory framework in order to oversee investments and transactions made by using cryptocurrencies, thereby removing secretive and anonymous transactions.
Furthermore, it would also be removing the entities with the anonymity that provide any service, investment opportunity, or platform. The authorities of South Africa aim to regulate the ever-evolving assets in the country.
The IFWG paper stated that unmonitored cross-border flow, money laundering, criminal activity, tax evasion, and terrorism financing are some of the key problems faced by regulators. Whilst cryptocurrencies are quite popular, as they do not need the government to be involved for its issuance or regulation by some government authority yet, the regulation was bound to happen, in order to ensure that crypto network does not turn into safe havens for criminals. So, the sorry excuse for cryptocurrency not being regulated cannot be employed by anyone who is seeking sneaky ways.
Furthermore, the recommendations in policy paper also include dealing with cryptocurrency as any other foreign currency. The Reserve Bank of South Africa is assigned to ask the finance minister for making amendments in exchange control regulations to include South Africa cryptocurrency regulations.
This change would require the dealers to facilitate cryptocurrency trading by registering as authorized foreign currency dealers and complying with the same rules as dealers dealing with the pounds, dollars, euro, and any other foreign currencies.
Article written by Taha Farooqui