According to South Africa’s financial conduct regulator, cryptocurrency financial companies must apply for a license between June 1 and November 20, 2023, in order to operate legally.
Eugene Du Toit, head of the Regulatory Frameworks Department of the Financial Sector Conduct Authority (FCSA), said during a news conference that just because crypto assets are classified as financial products doesn’t indicate that they are legal currency.
Du Toit stated, “We are not legitimizing crypto assets. “We are not endorsing cryptocurrency assets.”
Since officials do not consider cryptocurrencies to be legal tender, the FCSA purposefully avoided using the term “cryptocurrencies” in its terminology, according to the regulator’s chief Unathi Kamlana.
According to Kamlana, the declaration will give authorities the power to combat fraud and protect customers.
The disclosure and rules to be followed could aid South Africa in avoiding being placed on a “grey list” by the Financial Action Task Force due to gaps in its anti-terrorism financing and anti-money laundering system, according to the authorities.
According to Kamlana, further regulations regarding the exposure of financial institutions to crypto assets are probably coming, along with perhaps greater demands for customer verification.
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Non-fungible tokens (NFTs) are not included in the statement since they function more like investments in traditional works of art, according to Kamlana, who also indicated they will keep an eye on the NFT market.