Last week, the Intergovernmental Fintech Working Group (IFWG) published a position paper on its plans to regulate crypto assets in South Africa. Members of the IFWG include the Competition Commission, the Financial Intelligence Centre, the Financial Sector Conduct Authority, the National Credit Regulator, National Treasury, the South African Revenue Service, and the South African Reserve Bank.
The IFWG said that its position on crypto assets remains neutral, with the regulators seeking to encourage responsible innovation in the crypto-sphere. According to the IFWG, its main intention is to regulate crypto asset service providers (CASPs) -the entities providing services in relation to digital assets- rather than regulating actual crypto asset and products.
The position paper proposes identifying a list of services and companies that can be considered as CASPs and then bringing them under the regulation of the Financial Intelligence Centre (FIC) Act so that they are registered as accountable institutions. By law, accountable financial institutions are required to register with the government, conduct a risk assessment on customers, record and store information, report suspicious transactions, and report transactions over a certain amount.
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Other notable recommendations made by the IFWG include:
- Monitoring the crypto asset industry: daily trades, client bases, service providers and the volume of trades
- Crypto assets to remain without legal tender status and not be recognised as electronic money
- Relevant stakeholders to significantly increase campaigns on digital financial literacy