Tuesday, October 4, 2022
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Updated Cryptocurrency law in South Africa might protect the vulnerable cryptocurrency investors says Expert

Local experts on updated crypto legislation in South Africa says it might encourage collaborations while marginalising people who need it the most.

Crypto-asset service providers will become responsible entities as part of a series of revisions to South Africa’s financial regulations. According to a South African Treasury study, more crypto rules would be “finalised throughout 2022”. The proposed revisions will compel any individual offering advisory or intermediary services linked to crypto assets to be recognised as a financial services provider under the act and to comply with the act’s standards.

Marius Reitz, the general manager of the Luno crypto platform in South Africa, commented on the revisions, saying that credible crypto players embrace regulation, adding that regulation is a key element of the cryptocurrency ecosystem.Reitz stated that the regulation will make it easy for the public to differentiate between licensed and unregistered crypto service providers and locate a secure location to store and acquire their bitcoins.

Hermann Vivier, the founder of Bitcoin Ekasi, a South African Bitcoin Beach-inspired startup, stated that finally the authorities tend to address the problem with a one-size-fits-all answer, which turns out not to be a solution at all for many. Vivier explained that ideally, there should be a barrier below which those earning less than a specific amount require no compliance/verification, since, for example, if that threshold is R5,000 per month [$330], what possible damage can a person do with that money?

Nonetheless, Bitcoin Ekasi and other members of South Africa’s cryptocurrency business are unsurprised by the Treasury’s intention to strengthen “money laundering and terror risk funding controls through crypto assets.” The South African government has repeatedly advised huge players like Binance not to operate in the nation. Unathi Kamlana, the commissioner of South Africa’s Financial Sector Conduct Authority, has also spoken out about the importance of protecting vulnerable cryptocurrency investors.

The risks presented by so-called stablecoins, which will be handled later this year, are mentioned in the Treasury study. Central bank digital currencies (CBDCs) are being planned and hotly contested in Southern Africa. In the end, a CBDC is a method for governments to better monitor money flows, as opposed to private stablecoins like Tether (USDT).

 

Vaishali Goel
Technology enthusiast, explorer and academic scholar. Currently exploring the crypto world. Join me in my journey to see how crypto, NFT and Metaverse will change the world.
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