South Africa’s Intergovernmental Fintech Working Group (IFWG)
has a released new position paper that calls for the regulation of the
country’s cryptocurrency ecosystem. In the document, the IFWG, which is a
creation of the South Africa Reserve Bank (SARB), recommends “a staged
approach to bring crypto-assets within the regulatory remit through the
regulation of crypto asset service providers (CASPs).”
Crypto Service Providers to Adhere to AML/CFT Requirements
The 49-page document
also “sets out 25 recommendations for a revised South African policy,
legal and regulatory position on crypto assets and related activities.”
According to the IFWG, some of these recommendations “are already
underway and in the process of being implemented while some will take
much longer to implement.”
Meanwhile, in the position paper, the IFWG’s recommendations are
grouped into three overarching categories. Concerning the first one, the
working group recommends CASP adherence to the legislative requirements
that are aimed at anti-money laundering and combating the financing of
terrorism (AML/CFT). Some of these requirements include the reporting of
“cash transactions of $1818.00 (R25 000.00) and above or the applicable
threshold at any given time.”
Central Bank Arm to Monitor Cross-Border Crypto Transactions
In the second category, the IFWG says it wants the Financial
Surveillance Department (Finsurv) of the SARB “to assume the supervisory
and regulatory responsibility for the monitoring of cross-border
financial flows in respect of crypto assets and CASPs.” In addition, the
working group is recommending the amendment of certain parts of the
exchange control regulations to enable the placement of crypto asset
trading platforms (CATPs) under the purview of relevant bodies. The
position paper states:
It is further recommended that a new dispensation should
be created under the exchange control framework to allow CATPs (licensed
as above) to source or buy crypto assets offshore for the purpose of
selling to the local market, subject to specified limits to be
determined by Finsurv.
In the third category, the IFWG recommends that crypto-assets be
declared financial products. Such a declaration would require CASPs “to
become licenced intermediaries and provide for the rendering of advice
by such entities.” This, in turn, allows for “regulatory oversight and
will assist in addressing the immediate exploitation of consumers by
unscrupulous entities.”
IFWG Not Endorsing Crypto Assets
In the meantime, the IFWG has insisted that its release of the new
position paper “should not be interpreted as any type of endorsement of
crypto assets.” Instead, the working group argues that this decision “to
formally bring CASPs within the domestic regulatory remit was driven by
a combination of factors.”
One of these factors pertains to the need “to promote responsible
innovation and regulate the conduct of these providers.” The high
inherent risks associated with crypto assets as well as scam activity
are the other factors that prompted IFWG’s recommendations.
Finally, the IFWG is urging crypto-asset consumers to ensure they
fully understand the products and services they are gaining exposure to,
as well as the associated risks.
source link : https://news.bitcoin.com/south-africa-working-group-releases-new-position-paper-regulation-crypto-assets-providers/
