South Africa

South Africa plans to impose new crypto rules in Q1 2022

TL;DR Breakdown

• FSCA agent believes that crypto rules should be done intelligently.
• The restrictions on cryptocurrencies are motivated by recent scams in South Africa.

South African economics experts recently revealed that they are planning massive regulation towards cryptocurrencies by 2022. According to regulators, these crypto rules will aim to protect the finances of enthusiasts from riskier cryptos.

Among the rules is a guide on how tokens such as Ether, Litecoin, and XRP should be traded, according to FSCA agents. Although the cryptocurrency market has tried to be regulated by several countries globally, it is the first time specified in South Africa.

South Africa to create crypto rules by 2022

South Africa

South Africa has gone from being a country in Southern Africa that was unaware of cryptos to a territory that prioritizes them. But this freedom that surrounded the crypto market was not perpetual as national regulators have begun to act against them.

Economists in South Africa have raised the issue of crypto rules to stop the virtual market. The Financial Sector Conduct Authority or FSCA agents show that rules will be created against cryptos next year. The financial authority reveals that the risks that cryptocurrencies have, how they interfere with banks and how threatening a business is for the tax area will be analyzed.

According to Unathi Kamlana, a delegate from the FSCA, their goals are to intervene in the crypto market to avoid exposing people to its dangers. Kamlana added that caution should be exercised throughout this regulatory process, considering that cryptocurrencies have caused hunger in South Africa.

These crypto rules are motivated by two major scams in 2021 within the region. On both occasions, thousands of dollars were stolen from amateur investors who trusted a token or a system that promised high returns.

FSCA talks about cryptocurrencies

While Kamlana, the FSCA delegate, talks about cryptocurrencies, he revealed that these tokens are not yet a danger to the South African economy. However, crypto rules should be created to control the current market and thus avoid altercations such as those that occurred in previous months.

FSCA actions occur while developing a Stablecoin backed by the Central Bank of South Africa. Southern Africa is not the only one that has sought to regulate and develop its decentralized technology because those same goals involve countries like India and China. China banned trading cryptocurrencies while promoting the Yen Coin, which takes advantage of the Blockchain network.

Although Kamlana and other FSCA members showed progress on crypto rules, they may comply with the proposal by January 2022. South Africa should build a not-so-demanding regulatory scheme to avoid banning virtual commerce. Cryptocurrencies continue with a bearish streak that could end within days of ending 2021. However, this remains speculation maintained by crypto experts.