South Africa’s Reserve Bank recently announced that it is set to begin regulating cryptocurrencies as “financial assets” in the next 18 months, with exchanges expecting the move to drive adoption in the country.
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The move to classify cryptocurrencies as financial assets and not currency has been talked about for some time by the South African Reserve Bank (SARB). Deputy governor Kuben Chetty confirmed that the new regulations would take effect over the next year, speaking in an online dialogue on Monday.
The cryptocurrency space has been left to develop organically in South Africa, with no clear-cut regulations issued by the SARB until recently. The country has become a leader in cryptocurrency adoption, with more than 6 million South Africans estimated to own some cryptocurrency.
Marius Reitz, general manager for Africa at global cryptocurrency exchange Luno, has been a proponent of clear regulatory parameters for the cryptocurrency industry. In correspondence with Cointelegraph, Reitz welcomed the regulatory move and believes it will create a safer environment for users in the country:
“It will require crypto asset service providers (CASPs) to obtain FSP licenses and will be easier for the public to identify a trusted and licensed platform. It will create a barrier to entry for those platforms with no regard for the security of customer funds and customer information.”
Reitz said that Luno was in a fortunate position to preempt regulatory changes in South Africa, given that the company operates in a variety of markets globally that already have strict regulatory guidelines like Malaysia and Singapore.