The Deputy Governor of the SARB (South African Reserve Bank) recently stated that the organization had revised its stance on crypto. Currently, the central considers crypto to be financial assets.
As a result, it is working on regulations to guide their usage. By 2023, the SARB plans to have a set of principles for cryptocurrencies in place.
A Safer Cryptocurrency Ecosystem
Kuben Naidoo, the SARB’s Deputy Governor, recently declared that the bank had changed its position on crypto. Now, the SARB is seeking to formulate a framework regulating crypto transactions.
A structure like that, according to Naidoo, would result in a more secure cryptocurrency industry for investors.
As per reports, when such a legal framework is put into place, it will safeguard South African crypto investors exposed to scams. In the next twelve to eighteen months, the SARB hopes to have a crypto regulatory guideline in place.
In addition, Naidoo recently talked about the central bank’s regulation in a webinar. He outlined one of the primary reasons the central bank changed its decision on crypto.
According to him, the financial institution sees cryptocurrency as a financial asset. As such, it needs to be controlled and monitored.
The crypto sector has recorded a large influx of funds from companies and investors. Gradually, it is becoming a huge part of society. Hence, the SARB is taking steps to regulate it.
The Exchange Control Legislation For Crypto Exchanges
Meanwhile, the DG stated that the central bank has one primary goal. The goal is to ensure investors are treated fairly and their investment is safe.
According to Naidoo, the SARB’s change of heart was due to concerns about the usage of cryptocurrency in crimes. These crimes include money laundering and terrorist financing.
Furthermore, Naidoo stated that crypto exchanges must abide by the laid down exchange control legislation. The laws include AML standards and counter funding of terrorist activities.
Additionally, the regulations guiding exchange contracts would apply to exchanges too. Meanwhile, this law already applies to those involved in foreign transactions.
Also, the host at the webinar asked the DG why the SARB took time with its decision. Naidoo said the bank followed the example of Singapore, Australia, and the UK.
“We are actively monitoring them, and I don’t think we are falling behind in the use of virtual money. The majority of central banks are primarily concerned with two things. The first is regulating the whole cryptocurrency ecosystem. The second is to learn from it,” he concluded.