The South Africa Reserve Bank (SARB) has released her Cryptocurrency Regulatory Framework. The Regulations were stricter than expected. Previously it was Kenya, now South Africa. The Government made known to the public her regulations in other to foster Cryptocurrency Adoption in Africa being the second largest economy in Africa after Nigeria.
According to the consultation papers, under the new proposed laws, all cryptocurrency asset trading platform, custodial service provider, and payment service provider must register with the IFWG and comply with AML/CFT provisions of the Financial Intelligence Centre Act. That would include cryptocurrency exchanges, bitcoin ATMs, and trading centres.
The consultation papers highlights the possible pros and cons of digital currencies in the South African context, which includes criminals’ abilities to use cryptocurrencies illegally and cryptoassets’ impact on the country’s financial sector.
The South African government had also encouraged cryptocurrency service providers to monitor user transactions. Especially, transactions that are abnormally large, which may be linked to terrorist activities.
Members from the Treasury and SARB form the Intergovernmental FinTech Working Group (IFWG) have created a Crypto Assets Regulatory Working Group in charge of making recommendations for the regulations of digital currencies in the country.
The paper further states: “Upon conclusion of the consultation phase, the regulatory authorities will specify the way forward through a policy instrument such as a guidance note or position paper aimed for the first quarter of 2019.”
The forum will be open for public comments and suggestions till 15th February 2019.
South Africa is the second largest economy in Africa. The official bold move on Regulatory Framework For Cryptocurrency Activities in the country is a positive step towards Blockchain mean stream adoption. The first move was from Kenya, Uganda, now South Africa. The continent country with the largest economy acts unfriendly towards Cryptocurrency activities, warning her citizens to stay off. Moreover this is a good move for SA as more cryptocurrency projects that finds the country conducive for her project will continue to come.