South African Reserve Bank (SARB) announced that it will soon be regulating cryptocurrencies as financial assets, which was already been discussed about by the central bank for some time. It has been confirmed that the new regulations will be taking effect over the next 12 months.
“Our view has changed and we now regard it (cryptocurrency) as a financial asset and we hope to regulate it as a financial asset.
There has been a lot of money that has flowed in, and there is a need to regulate it and bring it into the mainstream.”
Kuben Naidoo, Deputy Governor of the South African Reserve Bank (SARB)
This move has proven to be readily accepted by the local crypto exchanges as they believe it can potentially promote adoption In the country. In the past, the cryptocurrency space in South Africa sprouted and grew on its own without the explicit regulation of cryptocurrencies until recently.
Marius Reitz, general manager for Africa at crypto exchange Luno, is among the industry participants who support the regulatory move as it can foster a safer environment for the local crypto users.
“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,” said Reitz.
Today, it is estimated that over 6 million South Africans own some cryptocurrency — effectively making the country a leader in cryptocurrency adoption. Now, with the SARB officially regulating the digital asset, the country is steadily becoming a proper crypto hub of the world.