According to the deputy governor of the South African central bank, it has shifted its stance on cryptocurrencies. The South African Reserve Bank (SARB) now regards crypto as a financial asset, which means it should be properly regulated. The institution expects to implement a regulatory framework for cryptocurrencies in the country by the end of 2023.
A safe crypto ecosystem
Kuben Naidoo, the SARB’s deputy governor, recently disclosed that the institution had decided to revise the stance it had taken towards cryptocurrencies. Therefore, it is now focused on developing a framework that can be used for governing crypto-related transactions in the country. A member of the Monetary Policy Committee of the South African central bank, Naidoo stated that they would be able to create a safe crypto ecosystem in the country with this framework.
According to a report, the implementation of a regulatory regime in South Africa would come in handy for crypto investors in the country because they will be protected by the law against crypto scams that have become quite widespread. It is believed that the regulatory framework would be developed by the monetary authority within 12 to 18 months.
Speaking at a webinar, Naidoo highlighted why the central bank had had a shift in its stance. He said that they had decided to regard crypto as a financial asset because there is a great deal of money flowing into the space. Therefore, regulation has become vital and they need to make it part of the mainstream.
Compliance with laws
However, the deputy governor asserted that they did not have any intention of picking winners or losers. He said that the ultimate purpose was to ensure investor protection and to give adequate warning to the investors. According to Naidoo the SARB decided to change its mind about crypto because the use of these digital currencies in illegal activities is a big concern.
According to Naidoo, the crypto exchanges operating in the country would be required to comply with laws, such as counter financing of terrorism (CFT) and anti-money laundering (AML) rules. They would also need to be in compliance with exchange contract rules, similar to how trading is done in other currencies and those laws would also be applicable to cross-border transactions.
Naidoo was also questioned about whether the central bank had taken too long to change its approach toward cryptocurrencies. He said that the SARB was taking the same approach as other global central banks, like those in the United Kingdom, Singapore, and Australia.
He stated that they were following their progress very closely and do not believe they are behind the curve where digital currencies are concerned. Naidoo said that most global central banks were focused on regulating the crypto market and also seeing how some of the lessons could be learned from it in order to benefit everyone.
It is true that many other countries are looking into regulating the crypto market in their respective jurisdictions.