FSCA to unveil South Africa’s crypto regulatory framework

South Africa financier The regulator plans to unveil a regulatory framework covering cryptocurrencies early next year to help protect vulnerable members of society from high-risk assets.

The rules, designed in concert with peers like the prudential authority and the financial supervisory board, will set out how trading in coins such as ethereum, XRP and litecoin is to be conducted, the FSCA commissioner said on Friday. , Unathi Kamlana, in an interview.

Other questions to consider include how currencies interact with traditional financial products, the risks they pose to bank balance sheets, and whether they threaten fiscal stability.

“What we want to be able to do is step in when we believe that what is being provided to potential customers are products that they don’t understand and that are potentially very risky,” Kamlana said. “We have to be very careful not to just legitimize them. “

The introduction of the regulations follows two major crypto scams originating in South Africa, both of which have led to billions of dollars in investments disappearing. Digital currencies have moved from the periphery of the financial world to the mainstream in recent years, which has led to more scrutiny around the world to prevent providers from operating unhindered.

While Kamlana said cryptocurrencies do not yet pose a systemic risk to the stability of the financial services industry, the FSCA views them as an asset rather than a currency. The regulator is monitoring the South African Reserve Bank’s plans to develop its own stablecoin, seeing this as the most responsible approach to innovation, Kamlana said.

“I think if I were to give advice to retail investors I would say wait and see what comes out of the central bank’s work process,” he said. “The best result in terms of stablecoins is what emerges from the central bank’s innovation, given their reliability and stability.” – Adelaide Changole and Loni Prinsloo, (c) 2021 Bloomberg LP

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