South Africa has gone one step further to regulate the cryptocurrency market. Coinpost reported this on the 12th.
On June 11, the Intergovernmental Fintech Working Group ( IFWG ), which consists of several financial regulatory authorities, published 25 recommendations for reviewing South Africa’s policy stance on cryptocurrency and related activities in its policy statement. announced. In order to target cryptocurrencies in a ‘step-by-step and structured approach’, we presented a roadmap for the introduction of regulations through cryptocurrency service providers (CASPs).
According to reports such as Moneyweb, the daily cryptocurrency transaction volume exceeded 2 billion RMB (about 163.2 billion won) for the first time in South Africa in January. It is known that a large proportion of this is due to transactions in markets that are not under the control of regulatory authorities.
In addition, at the end of 2020, the largest Ponzi fraud claiming high profit through Bitcoin (BTC) transactions using bots occurred in the same country, urging the need for clear cryptocurrency regulation.
[Major Regulatory Policy]
The IFWG has the following three basic guidelines for introducing regulations.
1. Framework for anti-money laundering and counter-terrorism financing (AML/CFT)
– Registration of Financial Information Center (FIC)
– Conduct customer verification
– Retaining records of customer and transaction information
– Obligation to continuously monitor and report misconduct
– Report on cash transactions of over 25,000 Rand (approximately KRW 2.04 million)
– Reporting of assets that may be related to terrorist activities and terrorist organizations
2. A framework for monitoring international remittance flows
The Central Bank of South Africa’s Financial Supervisory Service is responsible for overseeing and regulating the flow of funds.
In this case, the Ministry of Finance needs to revise the foreign exchange management rules to include cryptocurrency in the definition of ‘capital’.
3.Applying the laws of the financial sector
As a provisional measure, cryptocurrency service providers become licensed intermediaries under the supervision of the Financial Sector Conduct Authority (FSCA) by treating cryptocurrencies as financial instruments.
In the medium term, it is recommended to include cryptocurrency service providers in the Financial Sector Regulation Act.
[I do not endorse cryptocurrency]
The IFWG’s Statement of Policy and Policy is 49 pages long and provides specific regulatory guidance. Ultimately, it is said that it will fulfill its role as an order to implement the recommendations described for the regulation of individual financial sectors.
On the other hand, the IFWG is again calling attention to the improvement of the regulatory environment for cryptocurrencies, saying that “it should not be construed as an endorsement of cryptocurrencies, whether implicitly or explicitly.”
In South Africa, with strong consumer interest and market participation in cryptocurrency coming to life, the IFWG explained that the decision was made to target cryptocurrency service providers in response to the need for consumer protection. In addition, he explained that the reasons for establishing a regulatory framework include the need to identify and monitor cryptocurrency-related activities, and to meet the requirements of international organizations such as the FATF and the Basel Banking Supervisory Commission.
The IFWG emphasized its purpose, saying, “It is not to regulate cryptocurrency itself, but to regulate companies that provide cryptocurrency-related services, which leads to promoting responsible innovation.”
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Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.