South Africa will license approximately 60 cryptocurrency platforms by the end of this month, making it one of the first countries on the continent to require digital asset exchanges to operate with permission.
The country's Financial Sector Conduct Authority (FSCA) had given stock exchanges until November 30 to apply for a license or face potential sanctions. The FSCA reported that more than 300 crypto asset providers are seeking approval.
“We are processing these license applications and we are doing it in a phased manner given the numbers,” FSCA Commissioner Unathi Kamlana said in an interview with Bloomberg.
Interestingly, the regulator has decided not to develop a separate regulatory framework for crypto operators. Instead, it will oversee firms under the existing Financial Advisory and Intermediary Services Act (FAIS Act). This law focuses on the honesty, integrity, competence and capability of all financial service providers under the guise of compliance and compliance requirements.
With crypto exchanges falling under the FAIS Act, consumers will also have recourse and protections that do not currently exist. The regulator can impose sanctions if a company violates any of the law's requirements.
Kamlana concluded her words as follows:
“As we license and inspect, we will discover that there are gaps that perhaps cannot be closed by the current regulatory framework, the FAIS Act. And as we discover what those are, we may need to improve them.”
*This is not investment advice.