30 July 2022
Two experts have said they welcome South Africa’s planned regulation of cryptocurrency but warned this should not scare away investors. If the regulation is balanced between the need to protect investors and stimulating interest in crypto investment, this “could see funds stream into South Africa while growing the country’s burgeoning crypto ecosystem.”
South Africa’s impending cryptocurrency regulations as well as the central bank’s decision to regulate cryptocurrency as a financial product is welcome as long as this does stimulate interest in crypto investment, two experts have said.
In their joint statement shared with Bitcoin.com News, both Thomas Lobban, the legal manager at Tax Consulting South Africa and Greg Rodrigues, the CFO at a local crypto exchange, Revix, assert that any such regulations must not scare away investors.
The remarks by Lobban and Rodrigues follow reports quoting the deputy governor of the South African Reserve Bank (SARB) Kuben Naidoo who confirmed that the country expects to have regulations in place by end of 2023. As reported by Bitcoin.com News, the SARB had resolved to regulate cryptocurrencies after it had observed that “a lot of money” was flowing into these assets. The objective is to bring them “into the mainstream.”
Reacting to Naidoo’s comments and his subsequent announcement of when the SARB plans to start regulating cryptos, Lobban said:
Now we know crypto will be seen as a financial product with all the associated controls and requirements in place, including FIC [Financial Intelligence Centre], tax and exchange control compliance.
The FIC is a South African government that is tasked with the monitoring as well as the identification of criminal activity, money laundering and terrorism financing.
For his part, Rodrigues said regulation of the crypto industry is something that Revix not only welcomes but also takes seriously.
“Crypto is global and highly fluid, tending to flow into markets where regulations are welcoming, and just as easily out of those that are not,” the CFO said.
Therefore, South African regulators including the SARB are urged to be wary of pursuing policies that protect investors and overburden them at the same time. According to the two experts’ joint statement, when regulation is balanced, this “could see funds stream into South Africa while growing the country’s burgeoning crypto ecosystem.”
Meanwhile, Rodrigues pointed to the issue of crypto ownership and custody as one important factor that South African regulators also need to consider. He called for the external independent verification of crypto service providers’ claims relating to the quantity and security of clients’ assets.
Lobban suggested that the SARB needs to engage in public and other stakeholders “to ensure the policies it develops are informed by the interests of all parties who will be affected by them.”
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