South Africa’s intergovernmental Fintech Working Group aims to publish a draft policy paper on crypto-assets for public comment in the first quarter of 2020.
In response to questions from BusinessTech, Reserve Bank spokesperson Ziyanda Mtshali said that the draft policy will build on a consultation paper which was released for public comment in January 2019.
“The stances proposed in the revised policy paper are in line with the recently released recommendations on crypto assets by the Financial Action Task Force,” she said.
“Within the crypto-asset environment certain areas of potential risk have been identified, such as money laundering, illicit financial flows and lack of consumer protection.
“The setting of a legal and regulatory framework assists in providing safeguards in mitigating these potential areas of risk.”
No plans to ban?
Despite the introduction of tougher regulations, the January consultation paper states that South Africa does not currently intend to ban the buying, selling or holding of crypto assets, or to ban crypto assets for payments.
“However, because crypto assets are not recognised as a currency, customers may be exposed to harm in an unregulated environment,” it states.
“The decision not to ban the use of crypto assets is, however, based on the existing landscape and current levels of adoption, acceptance and use.
“South African authorities, therefore, reserve the right to amend their policy stance should crypto-assets pose a material risk to their respective regulatory mandates.”