Cryptocurrencies have been under the regulatory microscope ever since their inception. As they take over the world markets, the calls for stringent regulations have also become louder.
South Africa is the latest country to come up with a regulatory plan. The country’s Intergovernmental Fintech Working Group has made 25 new recommendations to regulate the crypto industry in a “phased and structured manner.”
The position paper focuses largely on the regulation of crypto-assets providers who have gained attraction amid rising cases of fraud.
Daily Crypto-asset trading in South Africa stood at $147 million in January. However, the market has been plagued by a lack of financial clarity. The position paper by IFWG calls for a better financial understanding of the industry as digital currencies continue to grow.
The paper calls on regulators to impose anti-money laundering and financial terrorism frameworks on crypto asset providers. It also recommends better checks on cross-border flows and implementation of financial-sector laws to the crypto market.
The IFWG has also suggested changes in the exchange control regulations and placing Crypto Asset Trading Platforms under relevant regulatory bodies.
The working group also wants regulators to declare cryptocurrencies as financial assets. This will allow for better regulatory oversight and curb customer exploitation at the hands of service providers.
Despite the detailed recommendations, the IFWG stopped short of endorsing crypto-assets. The body clarified that with or without better regulatory oversight, the crypto industry remains highly volatile and risky.