As a researcher with a background in both politics and finance, I find the recent election results in South Africa intriguing from multiple perspectives. The ANC’s re-election and subsequent formation of a coalition government mark a significant shift in the political landscape, which could have far-reaching implications for various sectors, including the emerging crypto industry.
I, as an analyst, can share that South Africa’s incumbent president Cyril Ramaphosa, representing the African National Congress (ANC) party, secured another term in office on a recent Friday. Notably, this marks the initiation of the country’s first coalition government involving multiple political parties.
In the recent election, the ANC gained control of 159 seats instead of the necessary 200 for a majority. Following intense negotiations for several days, they unveiled plans for a coalition government, which came to be known as the “government of national unity.” This administration includes their largest opposition party, the Democratic Alliance, along with the Inkatha Freedom Party and the smaller Patriotic Alliance.
For three decades, the ANC has held power in South Africa following the end of apartheid in 1994. In this upcoming election, they are anticipated to secure at least another five years in government. However, their dominance will not be as absolute as it once was; they previously controlled 230 seats in parliament.
The upcoming election outcomes are unlikely to bring about substantial changes to South Africa’s rapidly growing crypto sector. South Africa has taken a leading role among African nations in crypto regulation, with the Financial Sector Conduct Authority (FSCA) establishing a licensing framework. In April 2022, digital asset firms such as Luno, Zignaly, and VALR were granted licenses under this new regime. The FSCA also incorporated crypto providers into its Financial Advisory and Intermediary Services Act of the same year to regulate digital assets as financial products.
The Intergovernmental Fintech Working Group of the country is planning to investigate potential applications of stablecoins, develop policies and regulatory responses this year, and delve into the consequences of tokenization.
In April, South Africa initiated consultations on a new directive regarding cryptocurrencies in their Travel Rules. Once published in the gazette, these rules will be enforced. The directive necessitates virtual asset service providers to share wallet information and passport details during transactions.
Several countries worldwide comply with the Financial Action Task Force’s (FATF) Travel Rule, an regulation that mandates the exchange of information regarding cryptocurrency transactions between financial institutions to prevent money laundering activities.
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2024-06-15 00:57