The document release SARB Presents recommendations regarding policy proposals to the ongoing industry participants. Moreover, it offers an overview of the prevalent risks & benefits relating to digital assets. Until 15 February 2019, they have made this document opens to comment gathering from the public.
Additionally, this consultation document belongs to the Intergovernmental FinTech Working Group familiar as IFWG. Also, this group involves Treasury and Sarb members. They come together for establishing recommendations for the digital assets regulation in South Africa.
On the other side, the country manager of Luno crypto firm, Marius Reitz reveals that Luno entirely supports the risk and functional approach mentioned in the Consultation Paper. He also adds:
Luno also supports the IFWG’s decision to observe and adhere to international trends in terms of the regulation of crypto assets. We applaud the decision to implement the AML/CFT that form part of the recent amendments to the Financial Action Task Force Recommendations and that all virtual asset providers register with the Financial Intelligence Centre (FIC).
He believes that this move will keep out fraudsters securing the customer information and money as well. According to the paper, the regulations proposal will help track the buy/sell purpose relating cryptocurrency. On the major part, it will focus on enhancing compliance with ongoing financial security legislation.
The IFWG presents that every custodial and payment service providers, and cryptocurrency trading platforms, need to register with the IFWG. They will also have to comply with provisions by AML/CFT of the Financial Intelligence Centre Act (FIC). This also includes platforms like cryptocurrency ATMs, Bitcoin exchanges, and trading centers.
Meanwhile, the government suggests cryptocurrency service providers to track user transactions, specifically large transactions. As, they might link to illegal activity and if there’s no compliance, you cannot impose any administrative sanctions. The paper also mentions that South Africa currently does not intend to prohibit purchasing, selling or payments for crypto assets. Reitz also shares:
Regulation will provide consumers or potential consumers with the comfort that the service they are dealing with is held to defined regulatory standards. It may also result in even more talent and investment capital flowing into the industry, unlocking more business models and bringing more advanced products to market.
He mentions that they are actively seeking to drive regulations within the crypto sector along with various other financial regulators and central banks like SARB. Imposing regulations might enhance general trust and stability within the market, ultimately driving clarity to businesses and consumers.