A commissioner from a regulator body said that South Africa would have a new regulation framework for cryptocurrencies in early 2022.
Highly Dangerous Products
South Africa’s financial sector regulator, the Financial Sector Conduct Authority (FSCA) is set to unveil a new regulatory framework that covers cryptocurrency in early 2022.
Unathi Kamlana is a commissioner for FSCA. The new framework will govern how crypto currencies like bitcoin (BTC), are traded. Kamlana said that his organisation was not interested in legitimizing high-risk products during an interview. Kamlana stated:
What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky. They must not be legitimized.
According to reports, the FSCA is drafting crypto trading regulations in collaboration with other regulatory agencies. They will examine the interaction of the currencies with traditional financial products, and if they pose a risk to financial stability.
Cryptos Do Not Pose a Systemic Risk
Kamlana still asserts in his comments that cryptocurrency do not present a risk to financial stability. However, the commissioner stated that cryptos are assets to the FSCA and not currencies.
Kamlana advised South Africans not to use digital currencies created or privately issued, as they aren’t as reliable and stable as those issued by central bank.
“I think that if I were to give advice to retail investors, I would say wait to see what comes out of the process of the work of the central bank. The best outcome in terms of stable coins is what comes out of central bank innovation, given their reliability and stability,” said Kamlana.
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