CAPE TOWN – On Wednesday, The SA Reserve Bank (Sarb) published its views on regulating cryptocurrency through a consultation paper in the country.
The document offers recommendations for policy proposals to industry participants and gives an overview of the perceived risks and benefits associated with crypto-assets which it has made open to comment from the public until February 15, 2019.
Business Report spoke to industry players to understand how this would affect businesses in South Africa.
Jacques Sibomana, chief operating officer for Kuba said: "We have seen the rise in cryptocurrency platforms and traders with a majority of platforms come from not so trusted places. I believe that this white paper and the Sarb regulation would be great for early adopters as more safety is introduced in the space."
"For the SMMEs especially those that are operating in a cash-based environment, it will be great to see Sarb introducing training to them on the use of cryptocurrency as opposed to cash, for safety purposes."
Sibomana states that he supports the Sarb white paper but urges that this is filtered down to SMMEs' level.
"Cryptocurrency shouldn't just become another elite way to trade but should be made available to everyone," said Sibomana.
Farzam Ehsani co-founder and chief executive of VALR said: "VALR welcomes the progress that the South African authorities have made in putting forward a regulatory framework for crypto assets and we've been privileged to have had the opportunity to contribute our thoughts to this framework."
Ehsani states that VALR is hopeful that through a responsible and appropriate regulatory framework, a new chapter for the crypto asset industry will emerge.
"Allowing the public to engage with this new asset class with more comfort and security, knowing that a minimum set of standards will be required for any business that is legitimately operating in this space. The world needs a financial system that recognises the oneness of humanity and we believe that crypto assets have an important role to play in realising this vision," said Ehsani.
When asked how these regulations will affect businesses that deal with or are part of the crypto industry, Ehasni believes that for businesses such as VALR that have tried to do things the right way from the start, the impact of the current proposal should not be too burdensome.
"We already use artificial intelligence and machine learning technology to validate our customers' identities and have an anti-money laundering and counter-terrorism financing programme in place. So for businesses like ours, the current proposal is welcome. We anticipate that an appropriate regulatory framework will purge the industry of some of the businesses that have been lax in their measures to protect their customers. Overall the outcome of this framework should be positive for the industry and the public at large", said Ehsani.
BUSINESS REPORT ONLINE