South Africa’s Central Bank [SARB] has decided to bring crypto under its regulatory ambit in a complete reversal of its earlier policy that kept digital assets outside the scope of a legal framework. The apex bank has revised its previous stance and is considering regulating cryptocurrencies as financial assets.
Speaking on a webinar, SARB’s deputy governor Kuben Naidoo stated,
Our view has changed and we now regard it [crypto-currency] as a financial asset and we hope to regulate it as a financial asset. There has been a lot of money that has flowed in and there is a need to regulate it and bring it into the mainstream.
Naidoo also stressed that it intends to create a safer regulatory environment that has adequate health warnings and investor protection.
Notably, six years back the top bank considered crypto as an asset, rather than a currency. But has reviewed its stance amidst its growing concerns of crypto being used for money-laundering and other illicit activities in South Africa.
“The use of crypto for money-laundering and other illicit activities is a source of concern. 90% of transactions involving crypto-currency in the US are for the purchase of opioids or gambling tokens,” he added.
“South Africa Is In Sync With Global Regulators”- Naidoo
When asked if the change of heart is too late, Naidoo argued that most central banks across the globe took the time to watch and observe the industry, prior to taking regulatory decisions.
“We are doing what most regulators are doing and what most central banks are doing, and pretty closely what advanced economies like the UK, Singapore, and Australia are doing”.
“We are watching them very closely and I don’t believe that we are behind the curve in virtual currency. Most central banks are focused on two things: regulating the broad crypto environment, and secondly, learning from it to see how it can take on board some of those lessons.”
A week ago, a South Africa-based firm- H2O Water Securities launched the world’s first crypto water token, to raise capital to finance global water projects.
H2ON has already secured an investment of $150 million from GEM Digital, a Bahamas-based digital asset management firm that invests in utility tokens listed on over 30 centralized and decentralized exchanges around the world.