South Africa FSCA Grants Licenses To 60 Crypto Firms

Bloomberg reported that South Africa’s Financial Sector Conduct Authority (FSCA) will grant licenses to 60 cryptocurrency firms on Wednesday. This move comes after the regulator received 300 applications from various firms since implementing its new regulatory framework last year.

Moreover, in an interview with Bloomberg, FSCA Commissioner Unathi Kamlana explained the licensing process: “We are processing those licensing applications in a phased manner given the sheer numbers involved.” Existing legislation allows companies to seek reconsideration if they reject their applications.

The licensing requirement stems from South Africa’s decision to classify cryptocurrencies as financial products. Crypto companies operating within the country must obtain a license from the FSCA by June 1, 2022.

Rather than establishing an entirely new regulatory regime for crypto assets, South Africa has opted to bring the sector under the Financial Advisory and Intermediary Services Act (FAIS) purview. The FAIS Act encompasses measures to ensure companies maintain honesty and integrity, ultimately protecting consumer interests.

However, the country acknowledges the potential need for a more tailored approach to address the unique challenges posed by stablecoins. Kamlana remarked, “As we license and supervise, we may discover gaps that the existing regulatory framework, the FAIS Act, cannot address.” “In such cases, we might need to expand upon that as we uncover those gaps.”

South Africa Grants Licenses To 60 Crypto Firms

The FSCA’s move to grant licenses to 60 crypto firms marks a significant step in South Africa’s efforts to bring the burgeoning cryptocurrency industry under regulatory oversight. The country aims to balance fostering innovation and safeguarding consumer interests by leveraging existing legislation while remaining open to adapting regulations.

As the crypto landscape continues to evolve, South Africa’s measured approach highlights the need for regulatory frameworks to keep pace with the rapid advancements in the digital asset space, ensuring consumer protection and a conducive environment for responsible innovation.

Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.