South Africa to treat cryptocurrencies as financial products

The Financial Sector Conduct Authority (FSCA) of South Africa has published a draft regulation under which bitcoin and other cryptocurrencies are treated as financial products.

[Media Release]

The FSCA publishes a draft Declaration of crypto assets as a financial product under the Financial Advisory and Intermediary Services Act: https://t.co/s9nEGQKq1l

— FSCA (@FSCA_ZA) November 20, 2020

The new rules will apply to providers of cryptocurrency services, including exchanges, advisers and brokers. To operate in the country, all of them will have to register as providers of financial services.

Noting the growing interest in digital currencies, the regulator stressed that the presented document does not affect the status of crypto assets under other laws and is not aimed at regulating or legitimising them.

“The draft regulation is merely a temporary step aimed at reducing certain risks inherent in crypto assets,” said the FSCA.

The regulator added that the document is being adopted in anticipation of other decisions being considered by the Cryptoasset Regulation Working Group.

Earlier this year, the Intergovernmental FinTech Working Group published a document stating that cryptocurrency cannot obtain legal tender status in South Africa, and its use must be strictly controlled.

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