[ad_1]
The Intergovernmental Fintech Working Group (IFWG) has released a position paper on crypto assets in South Africa and its plan to regulate these assets in South Africa.
Members of the IFWG include the Competition Commission, Financial Intelligence Center, Financial Sector Conduct Authority, National Credit Regulator, National Treasury, South African Revenue Service, and South African Reserve Bank.
The IFWG said its stance on cryptoassets is neither explicitly hostile nor explicitly friendly, with regulators aiming to remain neutral in a bid to enable responsible innovation in the cryptoasset ecosystem while securing rules. a level playing field between the incumbent operator and the new role. players.
In the national context, the main concerns regarding the use of crypto assets relate to their well-documented use for illicit activities, including, but not limited to, tax evasion, money laundering and terrorist financing. .
Other concerns raised by the GTCI include:
The potential longer-term impact on the effectiveness of monetary policy tools; The potential longer-term impact on financial stability through developments, including, but not limited to, the creation of parallel payment systems; The flight of capital abroad through the evasion of South African exchange controls.
“Then there are also risks for consumers and consumer protection issues. Customers may invest in risky products or services which they do not fully understand and which are not suited to their needs, or may fall prey to fraudulent players carrying out scams claiming to relate to crypto asset products ”, said the IFG.
Regulation
The IFWG has said that its intention is not to regulate actual crypto assets and related products, but rather the entities that provide services related to those products.
The Position Paper refers to it as regulating Crypto Asset Service Providers, or CASPs.
The IFWG first proposes to identify a list of services that can be considered as PSAPs, then to place them under the scope of the Law on Financial Information Centers (FIC) so that they are considered as “responsible institutions”.
By law, responsible institutions are required to register with the government, maintain customer information, report suspicious transactions, and report transactions over a certain amount.
Just like banks, they will also be required to carry out a risk assessment on customers, including the likelihood that the money will be used for terrorism or money laundering purposes.
The FIC may administer sanctions in the event of non-compliance.
Other recommendations include:
The crypto-asset industry will be monitored, including daily transactions, customer bases, service providers, and transaction volume; Cryptographic assets will remain without legal tender and will not be recognized as electronic money; The Prudential Authority should consider the appropriate prudential and regulatory approach to the treatment of prudential financial institutions, such as banks, exposures to crypto assets, including reporting their direct exposures to crypto assets Relevant stakeholders should significantly step up digital financial literacy campaigns, including cryptoassets.
Read: New banking changes will take effect in South Africa from July
[ad_2]
picture credit