South Africa: Upcoming Crypto Regulations To Shielding The Vulnerable
The explosion of cryptocurrency has constantly sparked a lot of interest among individuals worldwide. The number of crypto users globally has constantly been growing over the years. According to a Binance article, there were over 300 million crypto users in 2021.
South Africa is among the African countries that have gradually increased crypto adoption. According to a Triple-A report, over 4.2 million individuals, 7.1% of the SA’s population, own cryptocurrencies. Further projections indicate that the number of Cryptocurrency owners in South Africa is bound to increase in the years ahead.
The fast growth of this multibillion and unregulated economy is forcing the SA government to act. Note that some of the biggest crypto scams have happened in South Africa. One of the scams that stole from crypto investors is the Mirror Trading International (MTI). The scam received over $588 millionworth of Bitcoin and was by far the biggest scam globally in 2020. Africrypt was another big scam that also disappeared with crypto worth billions of dollars.
These are occurrences forcing the government to intervene and streamline the industry once and for all. The idea is to establish regulations that authorize only credible companies to deal with cryptocurrency in South Africa. In these regulations, all loopholes will be sealed to ensure South African investments are protected.
The regulations will also help bring formal partnerships between crypto companies and South African banks, which will significantly facilitate great crypto adoption. So far, South African regulators have not successfully listed Bitcoin or other cryptocurrencies as legal tender. However, there has been a significant effort to accommodate cryptocurrency as an asset, allowing users to store value and invest in a decentralized system.
According to South Africa’s Financial Sector Conduct Authority (FSCA), the framework should be available for review and publication by the first of this year. The regulations aim to shield the vulnerable in society by putting measures that deter scammers and identify them.
According to FSCA, the regulator wants to be able to intervene whenever they feel that customers are being sold products that they do not understand and are potentially high risk. This will shield the citizens from scams, as has happened before.
According to the CoinDesk report, the FCSA is also aiming for its framework to address how crypto interacts with traditional finance products and balance sheets and the threat they may pose to financial stability.
With these measures, it will be easy to protect the vulnerable in society. There will be no room for scams to thrive, and the crypto adoption rate in SA will be increased. With only credible companies, which means legally registered companies running the crypto operations, the government will also be able to tap into this thriving economy for taxes.
The forthcoming crypto regulations in South Africa put KamPay as one of the companies that will provide a safe platform for cryptocurrency trading. It enables KamPay Wallet owners to send, receive and transfer cryptocurrencies on a safe, secure platform. The company is working with African governments and lotteries to ensure that more Africans find it easy to adopt cryptocurrency.
In addition to transacting via the Kampay wallet, KamPay provides insights and data that can create more awareness among amateur crypto investors. So the company has been doing what the SA government is planning to do for a long time now.
Cryptocurrency in South Africa is bound to gain even more traction with time. The current rate of adoption depicted by South Africans is an indicator that the future is indeed cryptocurrency. Mechanisms to shield vulnerable investors by the South African government are, therefore, a welcome initiative.