South Africa’s Decision on Cryptocurrency Regulation

South Africa's decision on cryptocurrency regulation

South Africa is considering cryptocurrency regulation by establishing a financial supervisory unit in order to prevent the recent increase in fraud and control cross-border payment flows.

The fact that cryptocurrencies are being used from the financial world to the mainstream day by day causes companies that provide services in this field to be more tightly controlled. Increasing fraud cases in South Africa, which is seen as Africa’s most developed economy, and the collapse of a major Bitcoin trading platform last year also prompted the country’s authorities. After this collapse, which is seen as the biggest fraud event in South Africa, the measures were increased.

“Still very risky and volatile.”

On Friday, the country’s Interstate Fintech Working Group made a statement stating that much tougher measures are on the way:

“Crypto-assets will be brought into the South African regulatory purview in a phased and structured manner. It is, however, reiterated that with or without regulation, crypto-assets remain inherently risky and volatile.”

“Financial literacy…”

The Interstate Fintech Working Group has currently prepared a 25-item recommendation list in its study. While the importance of institutions working in cooperation was mentioned in the file, it was emphasized that those who invest in cryptocurrencies should definitely increase their financial literacy levels.

South African CBDC is also coming.

In January 2021, daily cryptocurrency trading volume in South Africa exceeded 2 billion rands (about $147 million) for the first time. This figure shows that there is a serious interest in cryptocurrencies in the country where regulations are limited. The country’s central bank announced last month that they are working on a CBDC for retail users.

It was stated that the report of the working group will also determine the roadmap of the Financial Sector Implementation Department, and it was stated that the dynamically developing crypto money industry should be strictly controlled with the measures taken beforehand.

SEE ALSO: BoE: Stablecoins Should be Regulated as Banks

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Caroline Tetra

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