South Africa Defines Crypto as Financial Product

The definition could widen the adoption of crypto across a nation whose population exceeds four million

article-image

Pretoria, South Africa; Source: Shutterstock

share

key takeaways

  • The country’s financial regulator has issued a general notice defining crypto within a legal framework
  • Crypto, as defined by the regulator, must possesses cryptographic properties and not belong to a central bank

South Africa’s primary markets regulator formally established legal definitions for cryptoassets on Wednesday, joining other nations on the continent in their efforts to increase industry oversight.

The Financial Sector Conduct Authority (FSCA) issued its general notice, defining crypto as financial instruments under the country’s financial services act, which brings the asset class in line with other regulated financial products.

Its definition widens the possibility for greater adoption of crypto in South Africa, which had already allowed citizens to freely hold and trade them.

Specifically, the FSCA’s declaration defines crypto as a distributed ledger technology-based asset not issued by a central bank and employing cryptographic techniques.

The asset must also be tradable and capable of being stored electronically for the purpose of payment and investment or other forms of utility, the regulator said.

Under the Financial Advisory and Services Act 2002, a financial product is defined as any money-market instrument, company shares, securitized debt and securities, among other things.

Several nations across the continent have in place provisions for dealing with crypto, including The Central African Republic which adopted bitcoin as legal tender in February, becoming the second country in the world to do so.

Also in February, Botswana passed a bill to regulate the trading of digital assets in a bid to tighten anti-money laundering measures.

The stance towards crypto across various African countries remains divided, however. Nigeria, for instance, has a bank ban in place for trading digital assets despite the country launching its own central bank digital currency, the eNaira in October 2021.

Several nations, including Cameroon, Egypt, Morocco and Tunisia also have bans in place against investing and using crypto, fearing the asset could pose a significant risk to their economic sovereignty.

Many other countries of the 54-member continent are yet to implement formal crypto regulations, with many of their central banks cautioning against their use.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Though the opposing flow trend is likely to slow over time, industry watchers note, bitcoin fund assets could one day eclipse the $90 billion gold ETF space

article-image

Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?

article-image

Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month

article-image

It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet

article-image

Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend

article-image

Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million