South Africa Moves Ahead Cautiously With Proposed Regulation of the Crypto Space

(file photo).

Daily SA trading hit R2-billion in January. Government wants oversight.

First published in the Daily Maverick 168 weekly newspaper.

The increasing use of crypto assets, including Bitcoin, has led regulators to take steps towards bringing them under SA regulation, providing investors with protection they don't currently have.

A position paper recently published by the Intergovernmental Fintech Working Group (IFWG) confirms that initial steps taken towards regulating the crypto space in 2014 will now be firmed up. The paper makes 25 recommendations for a phased-in regulatory approach. The IFWG is a joint initiative including the National Treasury, the Financial Sector Conduct Authority, the South African Reserve Bank, the South African Revenue Service and the Financial Intelligence Centre (FIC).

IFWG chairperson Olaotse Matshane points out that the crypto-asset ecosystem has grown to include more than 10,000 unique crypto assets. "Global daily trading values have also increased significantly over the past few years, currently averaging in excess of $200-billion, and on some days exceeding $400-billion. While crypto assets' viability as a widely used means of payment remains untested and an open question, the market has demonstrated significant resilience over the last decade. The use cases for crypto assets as an alternative - albeit...

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