The South African Reserve Bank (SARB) is set to regulate cryptocurrencies as financial assets rather than a payment option. SARB deputy governor Kuben Naidoo has confirmed that the country will roll out cryptocurrency regulations over the next 12 – 18 months.
Naidoo made this known while speaking a webinar for local investment firm PSG. He noted that cryptocurrencies will not be treated as a payment option, but rather as a financial product. Naidoo says that most central banks across the world are focused on the broader crypto market and are learning from it and seeing how it can be used.
However, he adds that it is important that we separate genuine technological advancements and possible improvements to payment systems from the “hype.”
As a financial asset, cryptocurrencies will fall under the purview of the country’s Financial Intelligence Centre Act (FICA). It will be monitored for money laundering, tax evasion, and terrorist financing activities.
Naidoo added that the SARB then plans to develop a regulatory framework for South African exchanges to allow for crypto listings. This would include traditional banking regulations such as Know Your Customer (KYC) rules and exchange control regulations.
The deputy governor said the SARB’s view of cryptocurrencies has changed significantly over the past couple of years. Five years ago the central bank thought there was no need for any regulatory oversight, but a shift in perception to define cryptocurrencies as financial products has changed this view.
Meanwhile, SARB is also investigating the possible introduction of a central bank digital currency, after having recently completed a technical proof-of-concept in April 2022.