South Africa’s central bank has stated that it will propose rules and regulations for cryptocurrency exchanges and wallet providers. At the initial stage, it will be mandatory for all exchanges to register with regulators.
The South African Reserve Bank (SARB) published a consultation paper on Wednesday in which it maintained that the unregulated status of crypto asset sellers is making consumers vulnerable. It says, in order to protect both consumers and investors, regulatory action is urgently required.
However, the bank noted that it is aware of the consequences of regulatory mistakes. It aims at choosing a moderate version of regulations, which it termed as “limited regulations”. These regulations will be somewhere in-between a complete ban and doing nothing.
SARB added that it is planning to place some particular requirements on service providers. However, it will not set predefined conditions for formal authorization to provide crypto-related services. Moreover, the bank suggests a “useful starting point”, whereby at the initial stage the regulations can be introduced by asking crypto exchanges to register with the regulatory body.
Meanwhile, the regulatory body will evaluate the current laws and regulations and assess whether amendments or new regulations are required for crypto-related businesses. It explained that this registration phase will lead to formal authorization and licensing of South African crypto exchanges. Furthermore, SARB maintained that crypto assets cannot be recognized as electronic money and remain without legal tender status.
In addition, any unusual cash transactions of SAR 25,000 (USD 1,820) and above, will be required to be reported by registered crypto exchanges to the regulatory authority.
The above-mentioned consultation paper will be available for public comments until 15 February. The registration process is expected to be initiated by March 2019.
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