There is no doubt that the Crypto Industry, despite the ongoing bear cycle, is making waves this year. It’s interesting news to hear that South Africa has moved to regulate crypto assets in the country. Authorities have made their point that the Crypto assets are to be treated as financial products in South Africa, to make it easier for regulators to monitor the market and help to safeguard consumers. Authorities also mentioned that the regulations they have planned to introduce include applying foreign exchange controls and licensing crypto trading companies.
Fighting Money-Laundering & Terror-Financing
The South African Reserve Bank (SARB) has been working with many regulators to recognize tokens as financial products, in order to make them easier to monitor from a money-laundering and terror-financing perspective. SARB wanted regulation of crypto assets to prevent theft, money laundering and undermining of monetary policy because an ubiquitous cryptocurrency could weaken the authority of the central bank.
“This step would aid clarity, user protection and much-needed confidence in the ecosystem,” said Hannes Wessels, country head for cryptocurrency exchange Binance South Africa.
“This was the first legal step that was required to bring the crypto asset industry within the South African legal framework,” Brent Petersen from Easy Crypto, a crypto buying and selling platform, said in a note.
The Present State
As this regulation is immediately in effect, Governments & Authorities around the world are pushing hard to regulate cryptocurrencies in order to protect users from turbulent digital coins and fraudsters. Financial crypto watchdogs have been struggling on how to regulate new digital currencies and tokens, the prices of which have fallen since November last year. Regulators and lawmakers are studying ways to guide the operation of stablecoins.
How beneficial is this going to be?
The licensing requirements that are going to emerge from this classification will drive high standards and expectations in the crypto industry, particularly in relation to consumer protection, where the potential investors will easily be able to identify the providers that satisfy the regulatory requirements. This obviously should allow the financial advisors to formally guide their clients on crypto investments.
Words from Global Leaders on Crypto Regulation in South Africa
The announcement is the first legal step that was required to bring the crypto industry within the South African legal framework, said Brent Peterson, head of legal at Easy Crypto Ltd., a crypto exchange.
This will enable us to set foot in SA and launch our esteemed services that are already being offered globally and shall benefit the people of SA, said Joseph Chong, Head of Strategic Partnerships at HyperBC, a digital asset custodial, crypto payment solutions, and fintech services organization.
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