South African bank planning to regulate crypto as financial assets

Kuben Naidoo, Deputy Governor of South Africa’s central bank, in a recent interview cited that the cryptocurrency sector is controversial and full of “good apples and bad apples.”

During a webinar on June 12, he stated that they will not identify cryptocurrencies as a payment option but as a financial product that can balance the hype and the laws will likely be out within the next 18 months.

“We are not intent on regulating it as a currency as you can’t walk into a shop and use it to buy something. Instead, our view has changed to regulating (cryptocurrencies) as financial assets. There is a need to regulate it and bring it into the mainstream, but in a way that balances the hype and with the investor protection that needs to be there,” he said. 

South African Reserve Bank deputy governor, Kuben Chetty, has now confirmed the new legislation being  introduced in the next 12 months, speaking in an online show on Tuesday. Cryptocurrencies will fall under the scope of the Financial Intelligence Center Act (FICA) following the notion.

These new laws will follow the footsteps of banking regulations, known as “know your customer” (KYC). Following that, a sector of frameworks will be defined for exchanges including KYC requirements as well as the need to meet tax and exchange control laws.

Exchanges will also have to issue a ‘health warning’ to highlight the risk of losing money. In addition, this regulation will determine the management of cryptocurrency exchanges in the country and is planning to put its main focus on the crypto listing.