South Africa is preparing for its presidential election on May 29, but experts in the cryptocurrency industry believe that the election will not affect the country’s commitment to advancing crypto policies. Despite potential political changes as the African National Congress (ANC) faces challenges to its long-standing majority, there is a consensus among industry leaders that the crypto regulatory framework will remain stable.
The Financial Sector Conduct Authority (FSCA) of South Africa has recently established a licensing regime, making the nation one of the first in Africa to formally regulate crypto operations. Over the next few weeks, the FSCA is set to issue around 60 licenses to various crypto businesses. Among the early recipients of these licenses are well-known firms like Luno, Zignaly, and VALR. This development coincides with the recognition of crypto providers under the Financial Advisory and Intermediary Services Act of 2022, which classifies digital assets as regulated financial products.
Despite potential political changes, experts like Maurice Crespi from Schindlers Attorneys believe that these regulatory initiatives reflect a global trend of acknowledging the importance of blockchain technology in finance. The upcoming formation of coalition governments involving the ANC, Democratic Alliance, and Economic Freedom Fighters is not expected to affect the independence of regulatory bodies such as the South African Reserve Bank and FSCA. Mpumelelo Ndamane of Nuud Money assures that the political neutrality of these entities will safeguard crypto policies from any political disruptions.
Looking ahead, the National Treasury and the Intergovernmental Fintech Working Group are gearing up to explore stablecoins and their applications, as well as assess the impact of tokenization on local markets. A discussion paper detailing the regulatory implications of blockchain-based financial market infrastructures and tokenization, where real-world assets are represented on the blockchain, is expected to be released by December. John McCarthy of Fireblocks notes the apolitical approach taken by South Africa in addressing digital asset challenges, facilitated by an intergovernmental working group.
