The South African Treasury says it expects the amendments to the country’s financial laws — that will see crypto asset service providers being included as accountable institutions — to be finalized in 2022.
Aligning local laws with FATF standards
South African Treasury said that the proposal to add crypto asset service provider to the Financial Intelligence Centre Act (FIC Act) is expected to be approved this year.
The move to regulate crypto service providers comes as South Africa is attempting to address the “significant weaknesses in the country’s anti‐money‐laundering and counter-financing of terrorism systems” that were identified by the Financial Action Task Force (FATF).
South African Treasury’s latest budget review document explains how the FIC Act will be aligned to the FATF standards.
“This change would address concerns around money laundering and terror risk financing through crypto-assets and align the act to the standards set by the FATF for virtual assets and related service providers,” the treasury said in its budget review document.
The Treasury’s latest remarks on crypto assets come several months after the Intergovernmental Fintech Working Group (IFWG) published a position paper that called for the regulation of crypto assets. Bitcoin.com News reported that the IFWG said this did not mean the group was supporting cryptocurrencies.
As a financial product, Crypto Assets
In the same budget review, the Treasury also stated that crypto assets would be declared financial products by the Financial Advisory and Intermediary Services Act. The Treasury claims that this is to protect consumers. This document describes:
According to this declaration, any person providing advice or intermediary services related to crypto-assets must be recognised as a financial services provider under the act and must comply with the act’s requirements. These include advisors, brokers, and crypto-asset platforms. These efforts are expected to be completed by 2022.
On top of amending current laws, the review document states work is also underway to have crypto assets regulated under the country’s Exchange Control Regulations of 1961.
Concerning stablecoins, the document said later in the year the IFWG will also publish a follow‐up paper that focuses on risks that are posed by the assets. The document also reveals the South African Treasury is exploring ways “to regulate electricity‐intensive crypto mining” which it claims “is environmentally harmful.”
Your thoughts? Let us know what you think by leaving comments below.
Image creditShutterstock. Pixabay. Wiki Commons
DisclaimerThis article serves informational purposes. This article is not intended to be a solicitation or offer to sell or buy any product, service, or company. Bitcoin.com doesn’t offer investment, tax or legal advice. The author and the company are not responsible for any loss or damage caused or alleged caused by the content or use of any goods, services, or information mentioned in the article.