South Africa’s financial regulator, the FSCA, has given the green light to 59 cryptocurrency facilities looking to cater to local residents. Reports indicate that out of 493 license applications received by the FSCA, only 199 were complete, leaving 262 applications pending.
To manage the influx of applications, the FSCA has set a deadline of November 30th for crypto exchanges and digital platforms to submit their permit applications or face legal consequences.
The FSCA has been diligently processing these applications due to the high demand in the market. The aim is to bring the crypto sector under the FAIS regime for monitoring and regulation purposes.
The regulations have been carefully designed to include essential elements of the crypto business, such as consumer protection and regulation. The FSCA will take forceful actions when consumers are at risk. While the specific details of the approved companies have not been disclosed, they include crypto platforms and firms offering storage services. The authority will also oversee crypto brokerage firms and payment processors involved in cryptocurrency transactions, ensuring compliance with the regulations mentioned above.
The popularity and adoption of cryptocurrencies in South Africa have been steadily growing. Discussions surrounding crypto regulations have been ongoing since 2021, with efforts to establish a comprehensive framework for the industry. In a paper published in 2021, the FSCA outlined its phased approach to dealing with crypto assets.
Although the cryptocurrency framework is expected to be finalized by the end of 2022, the South African Reserve Bank (SARB) has already recognized cryptocurrencies as financial assets rather than a national currency.
The FSCA has adopted this classification and considers digital assets as financial instruments. South Africa’s management of cryptocurrencies as a nation is becoming more practical as adoption continues to rise.
A survey conducted in 2017 revealed that around 47% of the South African population had either invested in cryptocurrencies or were interested in doing so. Additionally, the country’s share of Google Bitcoin wallet downloads increased by 100% in just two years. In 2020, crypto exchange Luno reported that South Africa had the third-highest level of crypto ownership among all nations, with 13%.
Meanwhile, commercial entities within South Africa, including payment infrastructure firm Sitch, have been actively embracing cryptocurrencies. Last year, Sitch introduced cryptocurrency payments (“Pay with Crypto”) as part of its product lineup, allowing customers to use cryptocurrencies for purchases.
