Amid increasing crypto scams and fake ICO offerings across Africa, the South African Reserve Bank (SARB) presented a descriptive ‘report’ concerning various cryptocurrency aspects within the country. Accordingly, they demand public to ‘review the policy paper’ and comment on the same.
The new consultation paper by SARB highlights key approaches of crypto assets including
- Possible profits and risk of using virtual assets,
- Current regulatory stance and
- Present proposals to the industry players and stakeholders.
Moreover, to avoid any kind of confusion, SARB describes the core focus of the consultation paper is on ‘non-government or noncentral-bank-issued crypto assets and not on central bank cryptocurrencies’.
Calling Public Recommendations
Presently, the consultation paper is open for public until 15 February 2019 wherein everyone can present their opinion on all crypto aspects described in a draft. Nevertheless, the recommendation is prepared by ‘Intergovernmental FinTech Working Group (IFWG) which involves the member of SARB and Treasury.
“The IFWG and Crypto Assets Regulatory Working Group is of the view that regulatory action should not be delayed until the most appropriate regulatory approach has become clear, but to rather act and amend as innovation evolves.”
By asking public recommendation on consultation paper, SARB intends to have clear understanding of cryptocurrency aspects within the country. The paper reads;
Upon conclusion of the consultation phase, the regulatory authorities will specify the way forward through a policy instrument such as a guidance note or position paper aimed for the first quarter of 2019,
No ban but Limiting regulations
Recently, Bitcoin swindle cases in Africa urged regulators to warn public against the investment in such scams – few of those recent incidents Coingape reported were ‘The Bitcoin Wealth, and KeniCoin‘.
The latest report indicates the concern of ‘Financial Services Commission (FSC) on ‘growing #Crypto swindles’. Consequently, one such scam #bitcoin venture misguided public to participate in the company’s offering.#CryptoNews #cryptoscams @Bitcoin https://t.co/l7pxprsb3n
— CoinGape (@CoinGapeMedia) January 12, 2019
Given the financial risk associated with these fake ventures, South Africa Central Bank is strengthening the chain of regulations. Consequently, the paper states that;
“In order to achieve anti-money laundering/combating the financing of terrorism (AML -anti-money laundering/CFT – combating the financing of terrorism) requirements, more specific requirements will be necessary for the line with the recent amendments to the Financial Action Task Force (FATF) Recommendations,”
However, the country is not banning crypto assets within the nations, rather ‘proposing limited regulations’. Having said that, the authorities are also focused on directing the specific responsibilities and the requirements to service providers of crypto assets. Furthermore, the service providers are liable to comply with AML (anti-money laundering) and CFT (combating the financing of terrorism) requirements with the Financial Intelligence Centre (FIC).
“Therefore, in terms of the proposed level, the FIC (Financial Intelligence Centre) will include crypto assets service providers as an accountable institution and, as such, the accountable institutions will be under legal obligation to comply with AML/CFT requirements in the FIC Act.
What do you think of proposed consultation paper by South African Reserve Bank? Share your opinion with us.