South Africa is Going to Toughen Cryptocurrency Industry Regulation

Intergovernmental Fintech Working Group (IFWG) of South Africa published the document, proposing not to assign crypto assets legal payment means status.

South Africa is Going to Toughen Cryptocurrency Industry Regulation
South Africa is Going to Toughen Crypto Industry Regulation

According to the guidance document, published by IFWG, the growing sector of crypto assets is controlled not strictly enough from the side of finances, licensing structures, close monitoring of cash flows and other spheres.

“Crypto assets and various types of activity, connected with this new market, cannot stay outside the regulatory perimeter anymore”, — IFWG claimed.

IFWG group includes central bank of South Africa, Financial sector authority and Ministry of finance. As regulators claim, it is necessary to form “clear regulatory requirements” for cryptocurrency sector.

The guidance document proposes to introduce strict cryptocurrency industry control inside the country. It systematizes FATF anti-money laundering recommendations. According to the current recommendations, cryptocurrency enterprises will have to register with the regulator.

Besides, the cryptocurrency sector will meet new restrictions related to crypto assets usage. For example, the guidance document calls up to prohibit cryptocurrency usage as a calculation tool in South Africa’s financial infrastructure, but it proposes to use crypto assets “for inner payment purposes” and regulate them appropriately.

“Payments using crypto assets in the interim period should be tested in the regulatory “sandbox”, — IFWG says.

The document also says that rules for ICO “must be agreed, as possible,” with securities regulation schemes, adopted in South Africa. Issuers of payment and instrumental tokens will also have to provide to regulatory bodies their White books. The last IFWG recommendations are open for discussing till May 15.

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