The commissioner of South Africa’s Financial Sector Conduct Authority (FSCA), Unathi Kamlana, has allegedly said that the government’s rollout of a crypto infrastructure would be meant to reduce any possible risks that plague the sector.
Based on a December 10 report from Bloomberg, Kamlana said that the financial regulator aimed at presenting a regulatory infrastructure early in 2022. The new regulations will be designed to protect investors from “potentially highly risky” crypto assets.
He confirmed that any framework on cryptocurrency would be developed in coordination with the Prudential Authority and Financial Surveillance Board of the South African Reserve Bank. Kamlana highlighted:
“What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky. We must be very careful to not just legitimize them.”
The FSCA commissioner’s sentiments come after South Africa’s Intergovernmental Fintech Working Group said in June that it would start laying the groundwork for the “phased and structured” regulation of crypto in South Africa. The African country’s policy on crypto has been majorly one of the noninterference, but also in a stern warning to the public that there was minimal protection or recourse from the government for fraud or scams.
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When the co-founder of AfriCrypt, the South African crypto investment platform, purportedly vanished with billions of users’ funds, the FSCA stated that it could not take any legal action since the crypto assets were unregulated in South Africa. After getting a warning, Binance crypto exchange also challenged the FSCA’s authority as South Africa’s financial watchdog.
Binance argued that instead of all restrictive measures, the nation’s Financial Intelligence Centre needed to ensure that the crypto companies were in full compliance with the local laws.
In May 2021, the South African Reserve Bank launched an exploratory study on rolling out a central bank digital currency (CBDC). The country’s central bank is also part of a pilot program with those in Singapore, Australia, and Malaysia to test international settlements using CBDCs.
