Cryptocurrency services in South Africa must be added to FICA

South Africa’s Intergovernmental Fintech Working Group (IFWG) has recommended that all cryptocurrency-related services should be added to the Financial Intelligence Centre Act (FICA).

The IFGW released its policy position paper on crypto assets, in which it made several recommendations regarding the future regulation of services such as bitcoin exchanges, initial coin offerings, and cryptocurrency wallet providers.

“The purpose of the paper is to provide specific recommendations for the development of a regulatory framework for crypto assets, including suggestions on the required regulatory changes to be implemented,” the IFGW stated.

Among other things, the position paper recommends:

  • The implementation of an anti-money laundering and counter-terrorism financing regime
  • A licensing and supervisory regime from a conduct of business perspective
  • A regulatory regime for the monitoring of cross-border financial flows

The IFGW is comprised of National Treasury, the South African Reserve Bank, the Financial Intelligence Centre, the Financial Sector Conduct Authority, the National Credit Regulator, and the South African Revenue Service.

Its position paper on crypto assets follows a consultation paper, which was published in early 2019.

“The comments received [on the consultation paper] were carefully considered in compiling the position paper released on 14 April 2020,” the IFGW stated.

According to the working group, its overall objective is to foster innovation in South Africa’s financial technology sector. It will do this by supporting the creation of an enabling regulatory environment and reviewing both the risks and the benefits of emerging innovations, thus adopting a balanced and responsible approach to such innovation.

The IFGW invited members of the public and those potentially impacted when crypto assets in South Africa are regulated to provide comments on the position paper by 15 May 2020.

Now read: Bitcoin won’t be regulated out of the blue in South Africa

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Cryptocurrency services in South Africa must be added to FICA