[NEWS] South Africa issues licenses for cryptocurrency businesses to 59 companies

South Africa's financial regulator, the Financial Sector Conduct Authority (FSCA), has approved the issuance of operating licenses to 59 cryptocurrency businesses. The government is looking to utilize cryptocurrency to develop the African economy. Reuters and other media reported.

Felicity Mabaso, a division executive at the FSCA, spoke at a financial sector conference and revealed that the authority received 355 license applications, with 59 approved as of the 12th. An additional 262 applications are currently being reviewed, indicating growing interest in South Africa's digital asset industry.

Unathi Kamlana, the commissioner, also said, "We are processing license applications and will proceed in stages, taking into account the numbers." Even if approval is not granted, it is possible to apply for re-examination under existing laws.

Cryptocurrency companies that wish to continue cryptocurrency operations in South Africa were required to apply for licenses to the FSCA on June 1 last year.

Licensed service providers are subject to monitoring as part of the licensing process. This will ensure compliance with regulatory standards and strengthen consumer protection.

At the same time, the FSCA explained that it plans to launch an investigation into individuals who have provided crypto-related services without the appropriate authorization.

Intention to treat crypto assets as financial instruments

In 2022, the FSCA announced its intention to treat crypto assets as financial instruments. At that time, it stated that crypto assets need to be regulated to protect financial customers from risks and prevent money laundering and terrorist financing.

At the same time, the Financial Supervisory Authority of the South African Central Bank will have the authority to require crypto asset exchanges to report on crypto asset transactions.

South Africa does not have regulations for crypto assets in place, and at this time it plans to start creating an environment based on the FAIS Act (Financial Advisors and Agents Act). The FAIS Act requires measures to ensure that companies maintain honesty and integrity, and aims to protect consumers.

In addition, the African region is currently considering whether stablecoin regulation is necessary. Commissioner Kamlana said, "As we obtain licenses and supervise, we will probably find that there are gaps that cannot be filled by the existing regulatory framework, the FAIS Act. And when we discover what those are, we may need to create new regulations."

South Africa's legal currency, the rand, is highly volatile and always unstable. Therefore, crypto assets could become a new option for South Africans, and depending on the state of regulatory development, their spread is likely to accelerate.

Reference: Reuters
Image: Shutterstock

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