South Africa, which has experienced an influx of Forex and CFD brokerages that have set up shop locally in recent years with the opportunity to obtain a regulatory license to operate in the country, is now looking at ways to regulate digital assets, namely digital currencies, like Bitcoin that are popular today.
Our colleagues at Finance Magnates have reported that the government, through the Intergovernmental Fintech Working Group (IFWG) has recommended that digital currencies do not become legal tender in the country. Furthermore, the Group recommends in its policy paper that “crypto assets and the various activities associated with this innovation can no longer remain outside of the regulatory perimeter.”
As such, the government wants to implement a digital asset-specific regulatory framework, including the implementation of recommendations made by the Financial Action Task Force (FATF), the “new technologies” anti-money laundering measures, and the so-called “Travel Rule” in particular. The IFWG is also seeking a ban on using crypto as a settlement tool within the country’s financial infrastructure.
For initial coin offerings (ICO), the paper also proposed their alignment with the existing traditional securities governance schemes. However, payment and utility token issuers have to submit their whitepaper to the regulators.