Kara Meiring | Associate | Dispute Resolution Practice | Cliffe Dekker Hofmeyr Inc (CDH) | mail me |
The Financial Sector Conduct Authority (FSCA) officially declared crypto assets as financial products under the Financial Advisory and Intermediary Services Act. This is a big step forward towards avoiding South Africa’s infamous decline into the Financial Action Task Force (FATF) grey list.
One of the biggest issues South Africa had is the fact that our regulations did not account for one of the biggest financial evolutions in the market right now. Crypto is here to stay and without the proper regulatory recognition we were in danger of being seen as a compromised backdoor for financial crime.
The policy document on the new declaration is impressive and provides a great base for South Africa to avoid the dreaded greylisting and thus leverage the growing crypto trend to the economy’s advantage – especially when it comes to global investor confidence.
However, Non-Fungible Tokens (NFTs), another big development in this space, have been excluded from this declaration and have not yet been officially recognised as assets.
While the economic consequences are not massive right now, the increased legitimacy of crypto assets will provide a cascading effect in South Africa’s financial market, allowing the kind of innovation that sees the country catch up with the rest of the world.
As an expert and professional within the development of crypto assets, I am keen to share my insights on the following discussion points:
- Why crypto assets play such a big role in the greylisting status
- The role played by the financial action task force
- How this declaration changes the evolution of South Africa’s financial market
- How this declaration will impact competition in the market as big players sink their teeth into crypto
- What does this movement mean for NFTs, which are clearly crypto assets by definition
- Whether this report is a good example of robust policymaking
- How far behind is South Africa to other more developed markets when it comes to dealing with crypto assets?