South Africa to regulate the crypto market

The cryptocurrency scam problem is getting bigger in South Africa and in an attempt to curb that the government Is looking for a way to regulate the cryptocurrency industry in the country.

Since Bitcoin and various other altcoins are making their way from the underground to the mainstream and more and more serious companies are investing in them, various financial regulators all over the world are finally taking notice of these developments and focusing on the increasing number of crypto service providers, which so far have worked without any regulation.

South Africa had a particularly bitter experience in that regard, unfortunately. Late in 2020 a massive scandal erupted when the largest Ponzi scheme ever run in the country fell apart. Said scheme, as you can imagine, was presumably traded with Bitcoin. That scandal and others like it forced the local financial regulators to come up with tighter and more specific rules aimed at the cryptocurrency industry.

The South Africa Intergovernmental Fintech Working Group (IFWG) issued a statement:

“Crypto assets will be brought into the South African regulatory purview in a phased and structured manner” and added “it is, however, reiterated that with or without regulation, crypto assets remain inherently risky and volatile.”

IFWG made 25 different recommendation regarding how to regulate the crypto market and those recommendations will be reviewed the SA financial regulator - the Financial Sector Conduct Authority (FSCA).

In January 2021, the daily volume of cryptocurrency assets being traded in South Africa exceeded 147 million dollars and this may the SA Reserve Bank announced its for its own digital currency for general use.

Regulation, instead of bans, is the only way to curb the scams, I believe.