According to a notice published in the government gazette, South Africa’s financial authority has categorized cryptocurrency assets as financial products, making them subject to regulation.
The Financial Sector Conduct Authority (FSCA) stated in the brief notice that as of the date of publication, a crypto asset, which it referred to as “a digital representation of value,” must be regulated in South Africa.
The government has stated that it intends to enact regulations that cover licencing cryptocurrency trading firms and implementing foreign exchange controls.
Financial regulators are debating how to control new digital currencies and tokens, whose prices have declined since November of last year.
Cryptocurrency is a type of asset that can be exchanged, transferred, or kept electronically but is not created by a central bank.
Kuben Naidoo, the deputy governor of the South African Reserve Bank (SARB), told Reuters in May that regulation of crypto assets was imminent and might take effect in nine to fifteen months after regulators first stated they wanted to do so in November 2020.
A widespread cryptocurrency might undermine the authority of the central bank, he continued, so the SARB sought regulation of crypto assets to stop theft, money laundering, and the weakening of monetary policy.
Brent Petersen from Easy Crypto, a cryptocurrency buying and selling platform, stated in a note that “this was the first legal step that was required to bring the crypto asset market under the South African legal framework.”
The announcement, he continued, would cover cryptocurrency trading platforms as well as those that offer guidance or act as an intermediary between buyers and sellers of digital financial assets.
