The cryptocurrency space has been unregulated for quite a long time now. Hence, the already volatile domain has offered higher risks over time. However, the crypto framework is set to change as the South African Reserve Bank (SARB) has altered its understanding of crypto and now considers it as a financial asset that should be regulated at all costs. This statement was made by Kuben Naidoo, the Deputy Governor of SARB. Therefore, the South African crypto regulations are set to be stringent in the near future.
The South African Reserve Bank now is looking forward to formulating crypto-related frameworks, rules, and regulations. Naidoo, who is a part of SARB’s monetary policymakers committee, remarked that such an action will lead to a safer crypto domain. The new set of South African crypto regulations will be beneficial for crypto investors and participants who had earlier been scammed as they will now be protected. The SARB is planning to execute this action within 12 to 18 months, that is, 2023.
At a webinar organized by PSG Konsult, Naidoo cited the main reason for the sudden change in SARB’s opinion on crypto and said:
“Our view has changed and we now regard cryptocurrency as a financial asset and we hope to regulate it as a financial asset. There has been a lot of money that has flowed in and there is a need to regulate it and bring it into the mainstream.”
The South African crypto regulations will also extend to the crypto exchange platforms operating in the country. The SARB highlighted that the aim of the framework is not to discriminate between the winners or losers of this gamble and to protect all of them in all aspects. The major concern cited was the functioning of crypto exchanges. Therefore, they would be required to be compliant with stringent crypto exchange laws. This was in order to minimize the risks and dangers that crypto investors might face if these platforms conduct any malpractices.
On this Naidoo commented that:
“They would have to comply with exchange control laws such as anti-money-laundering and counter financing of terrorism rules. They would also have to comply with exchange contracts rules in the same way that people who trade in any currency and make cross-border transactions are subjected to those laws.”
In the context of how much time these crypto laws would take to be implemented, Naidoo said that they are following in the footsteps of Singapore, the United Kingdom, and Australia. He also mentioned that they are not behind in framing such laws since the majority of countries have still not started thinking about it. He explained saying:
“We are watching them very closely and I don’t believe that we are behind the curve in virtual currency. Most central banks are focused on two things: regulating the broad crypto environment, and secondly, learning from it to see how it can take on board some of those lessons.”
It will be intriguing to watch how the new set of South African crypto regulations will revolutionize the working of the entire volatile domain. Also, the subsequent responses by other countries on the matter are still underway and might influence further decision-making.