South African Reserve Bank Creates 12 Month Outlook For Crypto Regulation

The South African Reserve Bank plans to introduce new legislation that classifies crypto as a financial asset, not a currency. The new regulations claim to balance investor protection while leaving room for innovation, and plan to come into effect within twelve months.

South Africa is involved in the space, with over 10% of the population owning crypto, according to Luno, a global exchange. This makes up over 6 million people in the country. 

The country's National Treasury budget review from February introduced the decision to declare cryptocurrencies as financial products. The state also hopes to increase crypto transactions' reporting and monitor new exchange regulations.

Kuben Chetty, the South African Reserve Bank deputy governor, said, "By all definitions, it's [cryptocurrencies] not a currency, it's an asset. It's something that is tradable, it's something that is created. Some have backing, others do not. Some may have a genuine underpinning, real economic activity."

He continued to say that they were not currencies due to high volatility and a current inability for everyday retail use.

The new proposed laws will also require new know your customer laws, requiring increased transparency in who is the sender and receiver of crypto transactions. This is supposed to prevent money laundering and purchase of illicit goods with crypto.

Chetty said they need to regulate the sector and facilitate its merge with mainstream finance "in a way that balances the excitement and hype with the investor protection required."

Author: Garrett Meifert

Related Articles