South African Central Bank Now Considers Cryptocurrency to Be a Financial Asset – Emerging Markets Bitcoin News

Recently, the South African Reserve Bank’s deputy governor stated that the bank has reconsidered its views on cryptocurrency and considers it a financial asset, which should be properly regulated. A cryptocurrency regulatory structure is expected to be in place by 2023 according to the SARB.

Securer Crypto Ecosystem

Kuben Naidoo (SARB’s deputy governor) recently stated that the SARB had reviewed its position on cryptocurrency and was now seeking to establish a framework for crypto-related transactions. Naidoo, a member of SARB’s monetary policy committee, said such a framework would bring about a safer crypto ecosystem.

As explained in one report, when such a regulatory regime becomes effective, South African crypto investors — who have become accustomed to crypto scams — will be protected by the law. The SARB plans to have such a regulatory regime in place in 12 to 18 months’ time.

Naidoo was a speaker at the webinar that PSG Konsult organized. He is mentioned in the report as one of the reasons why the central bank made a change. Naidoo said the following:

Now, we see the world differently. [cryptocurrency]It is a valuable financial asset. We hope to regulate its use. The money has flowed in a large amount, and we need to regulate this and bring it back into mainstream.

Crypto Exchanges Must Comply with Exchange Control Laws

The deputy governor, however, insisted that the central bank’s intention is not to pick winners or losers but to ensure that “investors have an adequate health warning and investor protection.” Naidoo claimed the use of crypto in money laundering and other illicit activities is a source of concern that needs to be addressed, hence the SARB’s change of mind.

On crypto exchanges, Naidoo said: “[They] would have to comply with exchange control laws such as anti-money-laundering and counter financing of terrorism rules. They would also have to comply with exchange contracts rules in the same way that people who trade in any currency and make cross-border transactions are subjected to those laws.”

Naidoo, when asked whether the decision on cryptocurrency was too slow by the central bank, replied that his institution had the same approach to the matter as counterparts in Australia and Singapore.

“We are watching them very closely and I don’t believe that we are behind the curve in virtual currency. Most central banks are focused on two things: regulating the broad crypto environment, and secondly, learning from it to see how it can take on board some of those lessons,” Naidoo added.

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Terence Zimwara

Terence Zimwara was a Zimbabwean award-winning journalist and author. His writings have covered the economic problems of several African countries and how digital currency can offer an escape route.