The South African Reserve Bank will not implement regulations on Bitcoin without following a consultative process, Arif Ismail told MyBroadband.
Earlier this year, the Reserve Bank issued a statement on it reviewing its position on cryptocurrencies. The review will inform a policy framework and regulatory regime.
“Our current position is if any actor participates in cryptocurrency, the risk is really theirs,” said Ismail, who is the head of fintech at the SARB.
This position was taken in 2014 – hence the need to revisit it.
Ismail said the review is about understanding the evolving cryptocurrency landscape.
“Beyond just purchasing Bitcoin, Ether, and the 1,500-odd other tokens, what are some of the use cases starting to emerge?”
One of them is the initial coin offering (ICO).
People are also talking about using cryptocurrencies in retail settings, said Ismail.
The SARB review will assess what the underlying risks and benefits are, as well as the need for a new policy and regulatory framework.
“The important bit is to try and analyse whether there is need for such regulation,” said Ismail.
Regulatory issues under review include clearing and settlement risks, exchange control impacts, monetary policy, and financial stability.
Matters such as information security, taxes, consumer and investor protection, and money laundering will also be considered.
Ismal emphasised that the latter will be done collaboratively.
“What would be good is a holistic review of this space,” he said.
“We’re not responsible for tax – Treasury and SARS is. They are part of the workgroup, part of the journey.”
Reserve Bank stance
Ismail explained that the outcome of the review might be that the Reserve Bank’s stance need not change at all. It may or may not contain a shift in framework, he said.
“We have to be robust, we have to be thorough, and any regulation must be purposeful and proportionate,” said Ismail.
He said the cryptocurrency review is a complex piece of work, but the Reserve Bank should release a position regarding its policy in the second half of 2018.