The South African central bank now considers cryptocurrency to be a financial asset – Bitcoin news from emerging markets
The Deputy Governor of the South African Reserve Bank (SARB) recently said that the institution has changed its attitude towards cryptocurrency, and now sees that it is a financial asset that must be regulated as such. SARB expects to have a regulatory framework for cryptocurrency in place by the end of 2023.
A more secure crypto ecosystem
The Deputy Governor of SARB, Kuben Naidoo, recently said that the institution has revised its attitude towards cryptocurrencies and is now looking at introducing a framework that governs crypto-related transactions. Naidoo, a member of SARB’s monetary policy committee, said that such a framework would provide a more secure cryptoecosystem.
As explained in a report, when such a regulatory regime becomes effective, South African crypto investors – who have become accustomed to crypto fraud – will be protected by law. SARB plans to have such a regulatory regime in place within 12 to 18 months.
Meanwhile, Naidoo, who spoke at a webinar organized by PSG Konsult, is quoted in the report as highlighting one of the main reasons why the central bank changed its mind. He said:
Our view has changed and we now see [cryptocurrency] as a financial asset and we hope to regulate it as a financial asset. There has been a lot of money flowing in and there is a need to regulate it and bring it into the mainstream.
Cryptocurrency exchange to comply with currency control laws
However, the Deputy Governor insisted that the central bank’s intention is not to select winners or losers, but to ensure that “investors have adequate health warnings and investor protection.” Naidoo claimed the use of crypto in money laundering and other illegal activities is a source of concern that needs to be addressed, hence SARB’s change of heart.
On crypto exchanges, Naidoo said: “[They] would have to comply with currency control laws such as anti-money laundering and counter-financing of terrorist rules. They will also have to comply with the rules of foreign exchange contracts in the same way that people who trade in any currency and make cross-border transactions are subject to these laws. “
Asked if the central bank had spent too much time making this decision on cryptocurrencies, Naidoo insisted that his institution take the same approach as its counterparts in Australia, Singapore and the United Kingdom.
“We follow them very closely, and I do not think we are behind the curve in virtual currency. Most central banks are focused on two things: regulating the broad cryptocurrency environment, and secondly, learning from it to see how it can take. with some of these lessons, Naidoo added.
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