South Africa is the New Pro-Crypto Country in the Neighbourhood

South Africa is the New Pro-Crypto Country in the Neighbourhood

In a recent consultation paper, the government of South Africa hinted it has no intention to ban cryptocurrencies neither crypto companies at least in the middle term, as previously speculations were raised.

In the paper “Consultation Paper on Policy Proposals for Crypto Assets,” the South African Reserve Bank (SARB) stated that a regulatory framework on crypto assets needs to be a top priority for government’s agenda.

“Consumers are left vulnerable as sellers of crypto assets are not regulated. Therefore, no specified rules exist to protect them or provide customer resolution mechanisms,” the paper said.

The paper also highlighted the necessity of a regulation to fight against crypto’s bad practices, “In the case of purchasing crypto assets, there are currently no regulatory requirements for customers to be identified,” the consultations paper said.

“Hence, when purchasing crypto assets, the risks of clients conducting money laundering or terrorist financing activities, circumventing exchange controls and masking illicit financial flows are potentially high.”

The government also clarified that it does not intend to ban cryptocurrencies on trading or payments activities.

According to a press release published by the central bank, the Intergovernmental Fintech Working Group, IFWG, was created with a mix of public and private officials.

“The aim of the IFWG is to develop a common understanding among regulators and policymakers of fintech developments, as well as policy and regulatory implications for the financial sector and economy,” the note said. “The approach to reviewing fintech innovation is a balanced one, considering both its benefits as well as taking cognisance of associated risks.”

Following the consultation paper, members of the public and impacted stakeholders have until February 15, 2019, to provide comments regarding the matter.

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