(Ecofin Agency) – After classifying crypto-assets as financial products, South Africa now wants to regulate the activities of cryptocurrency exchange platforms without giving legal tender to these digital currencies.
Cryptocurrency exchanges will need to apply for licenses between 1er June and November 20, 2023 to be able to operate legally in South Africa, the Financial Sector Conduct Authority (FSCA), a regulator of the South African financial sector, announced on Thursday, October 20.
” The classification of crypto-assets as financial products, announced yesterday [mercredi 19 octobre, Ndlr] does not mean that they are now legal tender in South Africa said Eugene Du Toit, head of the Authority’s regulatory frameworks department, at a press conference.
” We do not legitimize crypto-assets. We don’t give them credibility “, he insisted.
Eugene Du Toit, Head of Regulatory Frameworks, outlines that this Declaration does not mean the crypto assets are a form of legal tender nor does it effect financial services in relation to crypto asset derivatives#crypto #cryotoassets #FSCATalk pic.twitter.com/oa3epY1RBI
— FSCA South Africa (@fscasouthafrica) October 20, 2022
The commissioner of the Financial Sector Conduct Authority, Unathi Kamlana, indicated that the classification of crypto-assets in the category of financial products aims above all to protect consumers against fraud. ” This ranking will allow authorities to crack down on scams and protect users, something they previously had no power to do. “, he specified. And to add: The FSCA has also deliberately referred to crypto-assets rather than cryptocurrencies, because regulators do not believe that the latter can be considered currencies. “.
In a notice published on October 19 in the official gazette, the FSCA defined crypto-assets as “ a numeric representation of the value “, noting that these digital assets” are not issued by a central bank, but may be exchanged, transferred or stored electronically for payment and investment purposes “.
According to experts, the classification of crypto assets as a financial product must allow regulation of this booming market in South Africa to prevent fraud, theft, money laundering and the weakening of monetary policy.
The Deputy Governor of the South African Central Bank, Kuben Naidoo, announced last May that the issuing institution is working with other regulators on a regulation of crypto-assets which should come into force within a period of nine to fifteen months.
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South Africa: Cryptocurrency exchanges will have to apply for licenses in 2023
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