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Gungun Bhatia
Oct 20, 2022
by Gungun Bhatia

South Africa Deems Cryptocurrency As Financial Product

South Africa

Table of contents

  1. S. Africa Classifies Crypto Assets As Financial Product
  2. Investor Protection and Compliance
The South African Financial Advisory and Financial Intermediary Services Act (FAIS), passed in 2002, has been modified to incorporate a description of cryptocurrency assets, according to a notice issued on October 19 by the nation's monetary regulator, the Financial Sector Conduct Authority (FSCA). This judgment brings cryptocurrency assets under supervision in South Africa for the first time and has been anticipated for several months.

S. Africa Classifies Crypto Assets As Financial Product

According to the FSCA notification, a crypto asset is a digital version of value that may be technologically traded, exchanged, and maintained but unauthorized by a central bank and entered into effect upon publication in the Green Gazette (the official government gazette). It also makes use of distributed ledger technology and applies cryptography algorithms.  The notification continues that digital currency assets have been classified as financial goods.

The FAIS defines a financial product as a commodity, debenture, money-making instrument, or instrument granting access to securities and instruments. Financial service companies with a license in South Africa may offer it, irrespective of whether they're local or foreign businesses.  The resources claim that registration might be an onerous task. The deputy governor of the central bank of South Africa stated this summer that the bank had started to see cryptocurrencies as financial assets and was looking at regulating the space.

Investor Protection and Compliance

In November 2020, a statement on cryptocurrency assets from South Africa was released. A national working committee developed a plan for a legislative structure in June 2021. Investor protection and compliance with anti-money laundering/know-your-customer (AML/KYC) standards aided by regulation. However, the specifics of the AML/KYC rules have generated considerable debate. The National Treasury of South Africa said in February 2022 that it would make cryptocurrencies a financial instrument and strengthen oversight and compliance with related activities.

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South Africa Financial Sector Conduct Authority (FSCA) Financial Advisory and Financial Intermediary Services Act (FAIS) Crypto Asset
South Africa Deems Cryptocurrency As Financial Product
Gungun Bhatia
Gungun is an enthusiastic writer that likes to create content for various aspects of the blockchain and crypto industry. She carries out extensive research and provides readers with informative and high-quality material.

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