The South African Reserve Bank (SARB) has given instructions to the various financial institutions in the nation to assist consumers who are engaging in transactions using cryptocurrencies.
The bank issued a recommendation in which it indicated that institutions should not place an overall ban on cryptocurrencies, but it did urge banks to do due diligence when dealing with customers involved with cryptocurrencies.
This comes as a result of the decision made by several banks in the nation to shut customer accounts related to cryptocurrencies. These banks cited a lack of suitable legislation to oversee the industry as the reason for their decision.
Additionally, owing to the increased risk exposure, financial institutions have closed crypto-linked accounts. Nevertheless, the SARB admitted that dangers are there in the cryptocurrency market, but it emphasised that financial institutions need to do extensive assessments.
The authority regulating the industry has said that carrying out risk assessments “does not always mean that institutions should attempt to avoid risk totally.” The South African Reserve Bank (SARB) stressed the need of banks doing due diligence in regard to money laundering and internal controls.
The use of consumers’ credit and debit cards to buy cryptocurrency on international exchanges was specifically prohibited by a number of the nation’s financial institutions, including banks.
It is important to note that South Africa accounts for a sizeable proportion of cryptocurrency investors, making it a magnet for a wide variety of firms that are competing for market dominance.