The Financial Intelligence Centre (FIC), Financial Sector Conduct Authority (FSCA), National Treasury (NT), South African Revenue Service (SARS) and the South African Reserve Bank (SARB) this week released a consultation paper on crypto assets.
Commonly referred to as crypto currencies, crypto assets are digital representations or tokens that are accessed, verified, transacted and traded electronically by a community of users.
An initial public statement on crypto assets was issued by South African authorities1 in 2014.
Their statement warned members of the public about the risks associated with the use of crypto assets for the purpose of transacting or investing, and advised users to take extreme caution in this regard. The statement further noted that no specific legislation or regulation existed on the use of crypto assets. Therefore, no legal protection or recourse was offered to users of, or investors in, crypto assets.
As a result of the growing interest and rapid innovation in the financial technology (fintech) and crypto assets domain, an Intergovernmental Fintech Working Group (IFWG) was established, comprising members from NT, the SARB, FSCA, SARS and FIC. The aim of the IFWG is to develop a common understanding among regulators and policymakers of fintech developments, as well as policy and regulatory implications for the financial sector and economy. The approach to reviewing fintech innovation is a balanced one, considering both its benefits as well as taking cognisance of associated risks.