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South Africa’s financial regulator plans to introduce framework aimed at protecting vulnerable crypto investors

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The commissioner of South Africa’s Financial Sector Conduct Authority, Unathi Kamlana, is claimed to have stated that the government’s implementation of a crypto framework will be targeted at reducing any potential hazards.

According to a Bloomberg storey published on Friday, Kamlana stated that the financial regulator planned to establish a regulatory framework in early 2022. To shield investors from “possibly highly dangerous” crypto assets. Any crypto framework, according to the commissioner, will be developed in collaboration with the South African Reserve Bank’s Prudential Authority and Financial Surveillance Board.

“What we want to be able to do is intervene. When we believe that what is available to offer to potential clients are items that they don’t comprehend. And that are potentially very dangerous”, Kamlana explained. “It’s critical that we don’t simply legalise them”.

“Phased and structured” cryptocurrency legislation in the country

The comments by the FSCA commissioner come after the Intergovernmental Fintech Working Group of South Africa said in June that it will be building the framework for “phased and structured” cryptocurrency legislation in the country. The African country’s crypto policy has mostly been one of non-interference. But it has also warned the public that the government offers no safety or redress in the event of scams or fraud.

When the co-founder of AfriCrypt, a South African crypto investment site, allegedly vanished with billions in customer cash. The FSCA declared it couldn’t do anything because crypto assets were unregulated in the country. Following the warning, Binance questioned the FSCA’s jurisdiction as South Africa’s financial regulator. Claiming that the country’s Financial Intelligence Centre was in charge of ensuring that crypto businesses followed local regulations.

The Reserve Bank of South Africa launched an exploratory study in May. In order to see if a central bank digital currency, or CBDC, could go through implementation. The central bank is also participating in a pilot initiative to test international CBDC settlements. With counterparts in Australia, Singapore, and Malaysia.

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