South Africa’s Treasury Department has announced that adjustments will be made to the nation’s financial legislation. These amendments would ensure that exchanges that provide cryptocurrency services are held responsible for their actions and activities in the country. According to the statement, the modification will be completed this year.
Ensuring That Local Laws Align With The Standards Of FATF
The Treasury Department anticipates that the recommendations would add providers of crypto services as liable entities under the FIC (Financial Intelligence Centre) Act. The institution has stated that the law would be approved this year.
The push to monitor these service providers is part of the nation’s attempt to address the serious deficiencies in the nation’s money laundering practices and financing of terrorist activities. These deficiencies were uncovered by South Africa’s Financial Action Task Force (FATF).
The SAT (South African Treasury) noted in its recent budget review paper that the recommended revisions, which have been up for public comment since last year, will bring the country’s FIC Act in line with the requirements outlined by FATF.
“This reform would address the issues about financial fraud and financing of terrorist activities through virtual currency, as well as act following the FATF’s guidelines for digital assets and exchange firms,” the Treasury stated in its budget statement.
The new comments by the Treasury on cryptocurrencies come after the IFWG (Intergovernmental Fintech Working Group) produced a policy document calling for digital asset regulation some months back. Nevertheless, as noted by Bitcoin.com News, the fintech working group stressed that this request does not imply that it was embracing cryptos.
Cryptos To Be Regarded As A Financial Instrument
In the meantime, the Treasury wants crypto assets to be classified as financial goods according to the FAIS (Financial Advisory and Intermediary Services Act). The goal of the financial institution is to safeguard the rights of consumers. The following is an excerpt from the document:
“Any individual offering advisory or intermediary services linked to virtual currencies must be registered as a financial institution under the act and must adhere to the provisions of the act. Virtual currency exchanges, companies, brokers, and also advisors are also part of these financial institutions.”
In addition to changing existing regulations, the review paper indicates that work is being done to have digital currencies controlled under the state’s 1961 Exchange Control Regulations.
In the case of stablecoins, the document stated that the IFWG will issue a follow-up study later this year that will focus on the dangers presented by these assets. SAT is also looking at measures to “control cryptocurrency mining,” which the state has regarded as a destroyer of the environment.