The Minister of Finance in the 2022 Budget Speech announced that the Regulatory authorities of South Africa are developing several interventions based on the recommendations in the position paper published by the Intergovernmental Fintech Working Group (“IFWG”) in June 2021, including:
- Including crypto asset service providers as accountable institutions within the Financial Intelligence Centre Act (2001). This change would address concerns around money laundering and terror risk financing through crypto assets and align the act to the standards set by the FATF for virtual assets and related service providers. The proposed amendments to the act were published in June 2020 for public consultation and are expected to be finalised during 2022.
- Protecting consumers by considering the declaration of crypto assets as a financial product under the Financial Advisory and Intermediary Services Act (2002). According to this declaration, any person providing advice or intermediary services related to crypto assets must be recognised as a financial services provider under the act and must comply with the act’s requirements. This will include crypto asset exchanges and platforms, as well as brokers and advisors. This work is expected to be finalised during 2022.
- Enhancing monitoring and reporting of crypto asset transactions to comply with the Exchange Control Regulations of 1961. The process to include crypto assets in the regulations is under way.
In 2022, the IFWG is expected to publish a follow‐up paper to address risks posed by so‐called stablecoins. The National Treasury is also exploring measures to regulate electricity‐intensive crypto mining, which is environmentally harmful.
These interventions are aimed at the protection of crypto asset owners and holding those (companies and individuals) who trade in the market with crypto assets accountable.