South Africa working group publishes new position paper calling for regulation of crypto asset providers – regulation Bitcoin News

South Africa’s Intergovernmental Fintech Working Group (IFWG) has released a new position paper calling for regulation of the country’s cryptocurrency ecosystem. In the document, the IFWG, a creation of the South Africa Reserve Bank (SARB), recommends “a phased approach to bringing crypto assets into regulatory jurisdiction through the regulation of crypto asset service providers (CASPs)” .

Crypto service provider to comply with AML / CFT requirements

The 49-page document also contains “25 Recommendations for a Revised South African Policy, Legal and Regulatory Position on Crypto Assets and Related Activities”. According to the IFWG, “some of these recommendations are already underway and being implemented, while some will take much longer to implement”.

In the position paper, the recommendations of the IFWG are now divided into three overarching categories. With regard to the first, the CASP working group recommends compliance with the legal requirements for combating money laundering and combating terrorist financing (AML / CFT). Some of these requirements include reporting “Cash Transactions of US $ 1,818.00 (R25,000.00) and above or the applicable threshold at any given time”.

Central bank arm for monitoring cross-border crypto transactions

In the second category, the IFWG demands that the financial surveillance department (Finsurv) of the SARB “assume supervisory and regulatory responsibility for monitoring cross-border financial flows in relation to crypto assets and CASPs”. In addition, the working group recommends the amendment of certain parts of the exchange control regulations in order to allow the placement of crypto-asset trading platforms (CATPs) in the area of ​​responsibility of the competent authorities. The position paper states:

It is also recommended that a new exemption be created under the Exchange Control Framework that will allow CATPs (as licensed above) to source or buy crypto assets offshore in order to sell them in the local market, subject to established limits set by Finsurv. be determined .

In the third category, the IFWG recommends declaring crypto assets as financial products. Such a declaration would require CASPs to “become approved intermediaries and provide advice from such entities”. This in turn enables “regulatory oversight and will help combat the direct exploitation of consumers by unscrupulous companies”.

IFWG does not support crypto assets

In the meantime, the IFWG has insisted that its publication of the new position paper “should not be interpreted as any kind of endorsement of crypto assets”. Instead, the working group argues that this decision to “formally bring CASPs into national regulation was driven by a combination of factors”.

One of these factors concerns the need to “encourage responsible innovation and regulate the behavior of these providers”. The high inherent risks associated with crypto assets as well as fraud activities are the other factors that led to the recommendations of the IFWG.

Finally, the IFWG urges consumers of crypto assets to ensure that they fully understand the products and services they are exposed to and the risks involved.

What do you think of the latest IFWG position paper on crypto assets? You can let us know what you think in the comments section below.

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