To operate legally, cryptocurrency companies in South Africa will need to apply for a license between 1 June and 30 November 2023. Announced last week, SA’s financial conduct regulator is trying to make sure the industry is properly run in the country. This new directive doesn’t mean that cryptocurrencies are considered legal tender in the country, however.
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According to Eugene du Toit, head of the Financial Sector Conduct Authority’s regulatory frameworks department, “we are not legitimising crypto assets. We are not giving credence to crypto assets.”
The cryptocurrency industry is facing regulation all around the world, with different regulators approaching the problem in a variety of ways. The FCSA deliberately referred to crypto assets rather than cryptocurrencies, as regulators do not believe they qualify as currencies, the regulator’s head Unathi Kamlana said. The primary aim of the directive is to tackle scams that have afflicted a lot of damage on consumers.
“South Africa is actually among the few countries that’s ahead of the curve in this space,” Kamlana said, when asked whether regulators had been slow to respond to the boom in interest in crypto assets in recent years.
Interestingly, NFTs (non-fungible tokens) are not covered by the new regulations. Another major consideration in implementing these regulations is to protect South Africa’s standing in the global financial environment. It will help South Africa avoid being greylisted by global watchdog the Financial Action Task Force, having deficiencies in its regime against terrorism financing and money laundering, the regulators said.
