Friday, October 7, 2022

South Africa Plans to Regulate Cryptocurrency as Financial Assets

The deputy governor of the Reserve Bank of South Africa (SA), Kuben Naidoo has hinted that the country will now regulate crypto as a financial asset.

Speaking during an online interview session with PSG, Kuben noted that beyond the hype around cryptocurrencies, it only qualifies to be a financial asset or investment and not a tool of exchange, in essence, a currency. 

The recent move by the South African Reserve Bank will be fully developed in a little more than a year. Kuben noted that the new development became imminent so that its citizens who have interests in crypto will have the liberty to do so. He added that the rise and fall of the crypto market do not deprive it of regulations within its borders.

In achieving this anticipated new feat, cryptocurrency assets will be monitored and managed under the umbrella of the Financial Intelligence Center (FIA). The economic body will ensure that crypto users are protected from the usual vulnerability of the crypto ecosystem. 

The usual crimes that are privy to the crypto market, money laundering, frauds, tax evasions, and cyber hacks amongst others will be closely monitored under the FIA.

A regulatory framework will be developed for cryptocurrency exchanges in South Africa to ensure crypto listing. This will also integrate a service that is peculiar to banking, the KYC rules coupled with “exchange control regulations”.

Further in the interview, the RBSA deputy also noted that the apex bank is currently working on the possible adoption of a Central Bank Digital Currency (CBDC). This was first announced in April after a proof-of-concept testing was completed on the digital asset dubbed Project Khokha 2 (PK2). 

About 5 years ago, crypto assets adoption in South Africa was perceived as a scam and Ponzi scheme. The narrative has now changed in the country.

According to reports inferred by Luno, a global crypto exchange, about 13% of the South African population own crypto assets. That accounts for about 6 million people from the overall populace. 

The decision of the RBSA to now recognize cryptocurrencies as financial assets and also regulate them is perceived as a smart move by crypto investors per insights gleaned among public commentators.

Israel Love
Israel Love is a passionate writer that enjoys educating and inspiring people through his writing. This passion fuels the desire to simplify the complexities in the blockchain ecosystem, by providing viable information about the crypto space in such a way that makes it easy for anyone to understand. Israel love also has interests in Human Resource Management as he is a trained expert in HR.

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