- All South African crypto businesses must apply for a license to operate legally.
- Declaration quotes, crypto assets are financial products, not legal tender.
- The crypto Twitter community finds the move bullish.
A declaration made on Wednesday states that all South African crypto financial enterprises must apply for a license between June 1 and November 20, 2023, in order to operate legally. The statement claims that crypto assets are financial products and not legal tender.
At a press conference, Eugene Du Toit, head of the Financial Sector Conduct Authority’s (FSCA) Regulatory Frameworks Department, stated:
We are not legitimizing crypto assets, we are not giving credence to crypto assets.
The declaration became effective on October 19 and was signed by the FSCA commissioner, Unathi Kamlana. Authorities believe that declaring crypto assets as financial products will help authorities to clamp down on scams and protect customers, unlike previously.
Unathi remarked:
The FCSA deliberately referred to crypto assets rather than cryptocurrencies, as regulators do not believe the digital assets qualify as currencies.
The disclosure and subsequent rules could aid South Africa avoid being placed on the Financial Action Task Force’s greylist for having shortcomings in its anti-terrorism financing and anti-money laundering systems.
Additionally, the decision is regarded as a pivotal movement for South Africa. Many of the major traditional financial institutions will now be able to start offering crypto products and services as a result of the declaration. However, the crypto Twitter community finds this move bullish.
A challenging bear market is currently underway at a time when cryptos are becoming more prevalent in markets across Africa. The blockchain forensics company, Chainalysis, claims that between 2020 and 2021, the African crypto market expanded by more than 1200%.
In addition, four African nations, like Kenya, Nigeria, South Africa, and Tanzania, are all in the top 20 for the adoption of cryptocurrencies worldwide.
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