Regulations from the South African Reserve Bank and the Financial Sector Conduct Authority that promote legitimate partnerships of crypto firms with banks are expected in South Africa in 2022.
South African crypto exchanges expect imminent crypto regulation from the South African Reserve Bank and the Financial Sector Conduct Authority. Global asset exchange Luno is the largest cryptocurrency exchange in the country. According to Luno, multiple asset managers are working to create crypto products. An exchange-traded fund listing on the country’s leading stock exchange, the Johannesburg Stock Exchange, would be a significant moment, says Luno.
According to Brett Hope Robertson, an investment analyst at Revix, the South African Reserve Bank is collaborating with the Intergovernmental Fintech Working Group and the Crypto Assets Regulatory Working Group on how exchanges should be run.
Richard DeSousa, CEO of AltCoinTrader, says, “I think it’s fair to say the regulators will walk a fine line. On the one hand, they don’t want to stifle innovation, but on the other hand, they have to keep economic law and order.”
Regulation considered a boon
Jonathan Ovadia of Ovex believes that the Financial Sector Conduct Authority’s anticipated regulation will reduce uncertainty with Ovex’s partners and promote institutional crypto investment, while the CEO of ChainEx comments on the strides South African crypto companies have made. He points out that many crypto-asset service providers have aimed at complying with anti-money laundering and counterterrorism regulations. This, despite the institutions not being considered “accountable institutions” according to Schedule 1 of the Financial Intelligence Centre Act 38 of 2001. Conducting Know-Your-Customer checks, keeping transaction records, and monitoring suspicious or unusual activity form part of an institution’s obligations under this law.
Luno growing, including in South Africa
Sentiments around regulation are generally positive. Marius Reitz, Luno’s general manager for Africa, believes regulation will be a boon for crypto adoption. It will allow for formal partnerships between banks and crypto companies.
Luno is growing its user base, which has recorded over nine million customers in over 40 countries. Luno points out that holding a longer-term view of crypto will show an uptrend amongst the massive short-term volatility.
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