With crypto being the worldwide phenomenon that it currently is, the need to regulate the industry is immediate in order to protect all stakeholders involved. The position most African countries are taking is to tread on the side of caution and ban the unfamiliar beast, rather than tame it.
South Africa is taking another route, fortunately, which is to regulate cryptocurrency as a financial product. According to a recent report, the Deputy Governor of the South African Reserve Bank (SARB) Kuben Naidoo confirmed that the country shall have regulations in place by the end of 2023. As an African powerhouse, the country could set the pace which the rest of Africa takes. However, the hope is that the regulators put in place measures to stimulate interest in cryptocurrencies rather than stifle it.
In a joint statement made by Thomas Lobban, the legal manager at Tax Consulting South Africa and Greg Rodrigues, the CFO at a local crypto exchange, Revix, the two experts have expressed the need for the regulators to desist from making regulations that deter investors.
Rodrigues had this to say: “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.”
According to the two experts, when regulation is balanced, funds will stream into South Africa while growing the country’s blossoming crypto industry.
Additionally, Rodrigues highlighted the issue of crypto ownership and custody as an important aspect for consideration. He called for external independent verification of crypto service providers’ claims relating to the quantity and security of clients’ assets.
“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.” Lobban said. According to him, SARB should engage the public and other stakeholders to ensure the policies are informed by the interests of all affected parties.