The Deputy Governor of the South African Reserve Bank (SARB) recently changed his position on cryptocurrencies, saying he now believes they should be regulated as financial assets. plans to introduce a framework for regulating cryptocurrencies.
a more secure crypto ecosystem
SARB Deputy Governor Kuben Naidoo recently stated that the SARB is reviewing its stance on cryptocurrencies and is considering implementing a framework to govern crypto-related transactions. a member of the SARB’s Monetary Policy Committee, Naidoo stated that such a framework would result in a more secure crypto ecosystem, he said.
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Meanwhile,Naidoo, who spokeat a webinar hosted by PSG Konsult, is quoted in the report as highlighting one important reason the central bank changed its mind. He states.
Our view has changed and we now consider [cryptocurrencies] as financial assets and we want to regulate them as financial assets. A lot of money is flowing in and we need to regulate it and bring it into the mainstream.
Crypto exchanges must comply with the Exchange Control Act
However, the deputy governor insisted that the intent of the central bank is not to pick winners and losers, but to “ensure that investors have adequate health warnings and investor protections. “Naidoo said that the use of crypto in money laundering and other illegal activities is a concern that must be addressed and therefore argued for a change of heart by the SARB.
Regarding crypto exchanges, Naidoo stated. “They need to comply with exchange control laws such as anti-money laundering and anti-terrorist financing regulations. They will also have to comply with the rules of exchange contracts, just as people who trade in any currency and conduct cross-border transactions are subject to those laws.”
When asked if the central bank took too long to make this decision on cryptocurrencies, Naidoo insisted that his institution is taking the same approach as its counterparts in Australia, Singapore and the UK.
“We are watching them very closely and do not believe they are behind the curve with virtual currencies. Most central banks are focused on two things: first, regulating the broader crypto environment, and second, learning from it and seeing how they can incorporate some of its lessons,” Naidoo added.
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