The South African Reserve Bank is ready to introduce regulations next year that will declare cryptos classed and treated as financial assets to balance investors’ innovation and protection.
How many people in South Africa have cryptocurrency exposure?
What is the need of the hour?
People or firms anticipating offering intermediary services or advice including cryptos are as of now need to be classified as financial services providers. This includes meeting many checkboxes to adhere to global guidelines set out by the Financial Action Task Force.
Shed some more light on the stance
The National Treasury of South Africa’s budget review published in February 2022 formally announced the stance to declare cryptos as financial products. The country also seeks to improve the reporting and monitoring of crypto transactions to adhere to exchange regulations in the nation.
Who confirmed the legislation and why?
Kuben Chetty, governor of the South African Reserve Bank has now affirmed that the latest legislation will be introduced in the upcoming 12 months. This will see cryptos fall under the scope of the Financial Intelligence Centre Act (FICA).
Why this is so significant?
This is important, as the stance will enable the sector to be analyzed for tax evasion, money laundering, and terror financing, which has been a heavily discussed byproduct of the decentralized nature of blockchains and cryptos.