How to Regulate Bitcoin and Cryptocurrencies in South Africa Announced: Official Statement Made!

South Africa’s financial regulator, the Financial Sector Conduct Authority (FSCA), has issued a brief announcement stating that crypto assets will now be classified as financial products so they can be regulated.

The FSCA called crypto assets a “digital representation of value” and mandated that they be regulated in the country from the launch date.

South Africa Classifies and Regulates Cryptocurrencies as a “Financial Product”

The regulator noted that the Financial Advisory and Financial Intermediary Services Act (FAIS) of 2002 has been updated to include the definition of crypto assets, a move that has been expected for several months. With the application bitcoin and cryptocurrencies will be regulated in South Africa for the first time.

The FSCA defines a crypto asset as “not issued by a central bank but can be traded, transferred or stored electronically by natural and legal persons for payment, investment and other forms of use; applying cryptographic techniques; and published its statement in the Green Gazette (the government’s official journal), describing it as a “digital representation of value” using distributed ledger technology.

FAIS defines a financial product as a security, debt instrument, “any monetization instrument” or a vehicle that grants rights to securities and instruments. Only licensed financial service providers can legally offer access to financial products in South Africa.

However, the new regulation also offers some temporary exemptions to crypto money companies.

These exemptions are designed to “facilitate transitional arrangements for existing providers of crypto-asset activities.” In other words, unlicensed providers will be allowed to “continue to provide financial services related to crypto assets without obtaining a license, provided that the person in question applies for a license under the FAIS Act within the period specified in the exemption.”

*Not investment advice.