Two experts have said they welcome the planned regulation of cryptocurrencies in South Africa, but warned that this should not scare off investors. If the regulation is balanced between the need to protect investors and stimulate interest in crypto investment, this “could see funds flow to South Africa while the country’s burgeoning crypto ecosystem grows.”
Crypto as a financial product
South Africa’s impending crypto regulations, as well as the central bank’s decision to regulate crypto as a financial product, are welcome as long as it spurs interest in crypto investment, two experts said.
In their joint statement shared with Bitcoin.com News, both Thomas Lobban, the legal manager at Tax Consulting South Africa, and Greg Rodrigues, the CFO of Revix, a local crypto exchange, state that such regulations should not scare off investors.
The comments by Lobban and Rodrigues follow reports quoting South African Reserve Bank (SARB) deputy governor Kuben Naidoo, who confirmed that the country expects to have regulations in place by the end of 2023. As reported Per Bitcoin.com News, the SARB had decided to regulate cryptocurrencies after observing that “a lot of money” was flowing into these assets. The goal is to bring them “into the mainstream.”
Reacting to Naidoo’s comments and his subsequent announcement of when SARB plans to start regulating cryptocurrencies, Lobban said:
We now know that cryptocurrencies will be seen as a financial product with all the associated controls and requirements in place, including FIC. [Financial Intelligence Centre]tax compliance and exchange control.
The FIC is a South African government tasked with monitoring and identifying criminal activity, money laundering and terrorist financing.
‘Crypto is global and highly fluid’
For his part, Rodrigues said that regulating the crypto industry is something that Revix not only appreciates but also takes seriously.
“Crypto is global and highly fluid, it tends to flow into markets where regulations are welcome, and just as easily into those that are not,” the CFO said.
Therefore, South African regulators, including the SARB, are urged to be wary of policies that protect investors and overburden them at the same time. According to the joint statement from the two experts, when regulation is balanced, this “could see funds flow to South Africa while the country’s burgeoning crypto ecosystem grows.”
Meanwhile, Rodrigues pointed to the issue of cryptocurrency ownership and custody as an important factor for South African regulators to consider as well. He called for independent third-party verification of crypto service providers’ claims regarding the amount and security of client assets.
Lobban suggested that the SARB should engage the public and other stakeholders “to ensure that the policies it develops are informed by the interests of all parties who will be affected by them.”
Register your email here to get a weekly African news update delivered to your inbox:
What are your thoughts on this story? Let us know what you think in the comments section below.
image credits: Shutterstock, Pixabay, Wiki Commons
DisclaimerNote: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service, or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.