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South Africa’s central bank is planning to impose more regulation on the crypto industry as it recognizes the digital asset space. The rules will be imposed within the next 12 months to regulate cryptocurrencies as financial assets.
Deputy Governor of the South African Reserve Bank (SARB), Kuben Naidoo, stated that crypto assets offer several benefits to the monetary system. But he admitted that there are issues and a lot of hype in the industry. As a result, the government is planning a comprehensive rule that could solve some of the problems in the industry.
After the legislation is introduced, digital assets will no longer be regulated as currencies in the country but as financial assets, the SARB Deputy Governor stated.
The Government To Classify Crypto As Financial Assets
Naidoo, while commenting during a recent interview, pointed out the controversial nature of the crypto industry. He likened it to a situation where there are “good apples and bad apples.”
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Despite the myriad of issues surrounding the industry, Naidoo stated that the government is not planning to ban cryptocurrencies. Rather, it has resolved to improve the industry by providing a more comprehensive regulatory framework that will erase so many of those issues.
In his view, crypto assets cannot be seen as currencies since they are not generally used to make payments in everyday activities.
“We are not intent on regulating it as a currency as you can’t walk into a shop and use it to buy something,” Naidoo said. He added that the government is now focused on regulating and bringing it into the mainstream. But it has to be done in a way that protects the investors and balances the hype in the industry.
Government Tightens Regulation After Cajee Brothers Scam
Naidoo also stated that there is a need to protect the domestic investors in the crypto industry since there have been several crypto scams in the country in the past several months.
The increased regulation is coming after the Cajee brothers, founders of Africrypt, a digital asset investment firm, made away with 69,000 BTC. This put affected investors in a state of chaos and financial turmoil. At the time of the turbulent event, the value of Bitcoin was about $2.3 billion.
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