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The Financial Sector Conduct Authority in South Africa has approved about 59 crypto licenses, which could be a step towards crypto regulation.
South Africa is set to become one of the first African countries to require crypto exchanges to be licensed. About 60 cryptocurrency platforms are expected to receive permits by the end of the month.
South Africa’s Step Toward Crypto Adoption
The Financial Sector Conduct Authority has given exchanges until November 30 to apply for licenses or face enforcement action. Currently, more than 300 crypto-asset providers are seeking approvals.
The authority has authorized the Financial Surveillance Department of the South African Reserve Bank (SARB) to conduct supervision. Speaking to Bloomberg, FSCA Commissioner Unathi Kamlana said that as they license and supervise, they will discover that perhaps there are gaps. These cannot be closed by the existing regulatory framework, the FAIS Act. She added that they might need to build on that and discover the gaps.
The Start of Regulatory Process
When South Africa began the regulatory process in 2021, it had considered setting up a separate regulatory framework for crypto. Plans to finalize the regulations were in place for 2022. However, the SARB later stated that cryptocurrency would be declared a financial asset in regulations due in 2023. Ultimately, the FSCA declared it a financial product.
In July, the FSCA commissioner said 20 applications had been received before the November deadline. In addition, crypto exchanges operating without licenses after the deadline could face enforcement actions, such as fines and closure. In December, the FSCA said it had received 128 applications, with 72 to be considered between December and March.
In February, the South African National Treasury announced that it would include stablecoins in its definition of crypto assets. Moreover, regulating the assets gives the central bank’s Financial Surveillance Department the power. That, in turn, requires South African crypto asset trading platforms to report transactions involving crypto assets.
Felicity Mabaso, a divisional executive working for the FSCA, spoke at a financial sector conference. During her speech, she mentioned that the authority had received a total of 355 applications for licenses. 59 applicants were approved as of Tuesday, and around 262 applications are in progress.
What is the Importance of Crypto Regulation
This approval benefits the traders and investors by providing a sense of regulation and security. The recent cryptocurrency crash resulted in positive market regulation. While some may question the benefit of government control, it could stabilize the volatile market and make it more accessible to institutional investors.
With legality and financial crime concerns addressed, insurance companies and pension funds can include crypto in their investment strategies. Thus bringing legitimacy and stability to the market.
Summary
South Africa has taken a big step in approving 59 applications for crypto licenses. The South African Reserve Bank’s Financial Surveillance Department is authorized to conduct supervision. The FSCA Commissioner, Unathi Kamlana, said that they may discover gaps that cannot be closed by the existing regulatory framework and may need to build on them. Crypto regulation is expected to benefit retailers.
Disclaimer
The views and opinions stated by the author or any people named in this article are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos, or other related indexes comes with a risk of financial loss.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
