South Africa Classifies Crypto Assets as Financial Products, Clears Deck for Regulation

South Africa's financial watchdog said a crypto asset, which it referred to as "a digital representation of value", must be regulated from the date of publication.

By Reuters | Updated: 20 October 2022 10:55 IST

South Africa Classifies Crypto Assets as Financial Products, Clears Deck for Regulation

Photo Credit: Unsplash

SARB wanted regulation of crypto assets to prevent theft, money laundering

Highlights

South Africa plans to apply foreign exchange controls for crypto
These rules will apply to crypto trading platforms, intermediary services
Crypto trading companies require licenses to operate under new rules

South Africa's financial watchdog has classified cryptocurrency assets as financial products, a notice in the government gazette said on Wednesday, enabling them to be regulated.

In the brief notice, the Financial Sector Conduct Authority (FSCA) said a crypto asset, which it referred to as "a digital representation of value", must be regulated in South Africa from the date of publication.

Regulations that the authorities have said they planned to introduce include applying foreign exchange controls and licensing crypto trading companies.

[Sponsored] Samsung Galaxy S24: The Ultimate Camera Phone With Smarter On-Device AI

Financial watchdogs across the globe have been grappling with how to regulate new digital currencies and tokens, the prices of which have fallen since November last year.

Crypto assets are not issued by a central bank, but are capable of being traded, transferred or stored electronically.

South African Reserve Bank (SARB) Deputy Governor Kuben Naidoo told Reuters in May that regulation of crypto assets was in the offing and might come into force within 9 to 15 months, after regulators said they intended to do so in November 2020.

India to Work on Global Crypto Rules During Upcoming G20 Presidency

He added the SARB wanted regulation of crypto assets to prevent theft, money laundering and undermining of monetary policy because a ubiquitous cryptocurrency could weaken the authority of the central bank.

"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.

He added the declaration would apply to crypto trading platforms, as well as those that provide advice or intermediary services for the buyers and sellers of digital financial assets.

© Thomson Reuters 2022

Will crypto tax hurt the industry in India? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.