According to experts, a regulatory framework for digital assets should be published in the next stage. The South African regulatory body sees cryptocurrencies as a digital representation of value.
The rules provide provisions for South African-based Defi firms and cryptocurrency exchanges.
The Financial Sector Conduct Authority (FSCA) of South Africa has declared that cryptocurrencies are financial products. Therefore, as outlined in the official gazette, they cleared the way for their regulation across the board. The South African regulator stated that cryptocurrency assets are “a digital representation of value.” Moreover, they added that they would probably have a nationwide regulation as of the publication date in a notification released on Wednesday, October 19.
Digital Assets To be Part of The Circling Economy
The government plans to enact rules regulating foreign exchange operations and licensing requirements. Cryptocurrencies and other digital assets are instruments of value, according to the FSCA.
South African Reserve Bank (SARB) Deputy Governor Kuben Naidoo said it would take nine to fifteen months for the area to implement crypto legislation. Regulators have been steadily disclosing these actions since November 2020. The goal of the South African central bank is to create a regulatory framework for digital assets swiftly. This way, they will stop various crimes associated with their trading, including fraud, theft, and money laundering.
It will also stop cryptocurrencies, particularly stablecoins, whose global expansion has alarmed authorities, from impacting the central bank’s power and control over the monetary system. Brent Petersen, a lawyer with a cryptocurrency trading site, stressed that this was the first legal step necessary to bring the crypto asset market into the South African legal framework.