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South Africa’s Financial Regulator Approves 59 Cryptocurrency Platforms
South Africa’s financial regulator, the Financial Sector Conduct Authority (FSCA), has granted approval to 59 license applications from cryptocurrency platforms seeking to offer services to residents.
Application Process and Deadline
During a financial conference, Felicity Mabaso, the FSCA divisional executive, revealed that the regulator received a total of 355 license applications, with 262 still pending. In response to this influx, the FSCA set a deadline of November 30 for exchanges and cryptocurrency platforms to submit license applications or face enforcement measures.
Regulatory Framework
The FSCA has chosen to utilize South Africa’s existing Financial Advisory and Intermediary Services Act (FAIS) to regulate the crypto sector. Commissioner Unathi Kamlana explained that the FAIS provides a robust framework covering user protections and enforcement actions when necessary.
Future Regulatory Adjustments
Commissioner Kamlana acknowledged the possibility of future adjustments to the regulatory framework as more licenses are issued. He mentioned that gaps may be identified that require additional regulations beyond the FAIS Act.
Regulatory Oversight
Regulatory oversight will extend to crypto brokerage firms, payment processors, and firms offering custody services involved in cryptocurrency transactions. Specific details about the approved companies have not been disclosed.
New Regulatory Framework Consideration
South Africa has been actively considering the creation of a new regulatory framework for the crypto industry since 2021. The South African Reserve Bank (SARB) has declared cryptocurrencies as financial assets, aligning with the FSCA’s classification of digital assets as financial products.
Cryptocurrency Adoption in South Africa
South Africa’s approach towards cryptocurrencies has become more proactive as adoption gradually increases. A survey in 2017 showed that 47% of South Africans had invested in or expressed interest in cryptocurrencies. Bitcoin wallet downloads in the country increased by 100% in the same year.
In 2020, crypto exchange Luno reported that South Africa had the third-highest level of crypto ownership worldwide, reaching 13%. South African companies are actively embracing cryptocurrencies, with initiatives like “Pay with Crypto” by Stitch and the CryptoExpress app by Paycorp.
Last week, cryptocurrency exchange Luno became one of the first firms to receive a license from the FSCA in South Africa, allowing the exchange to operate as a financial services provider in the country.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
