South Africa’s Election Won’t Interfere With Crypto Policy: Industry Watchers

South Africa’s crypto community isn’t concerned that the country’s upcoming election will derail its plans for digital assets. The Financial Sector Conduct Authority (FSCA) recently set up a licensing regime, making it one of the first African nations to do so. In the coming weeks, they plan to grant 60 licenses to crypto firms like Luno, Zignaly, and VALR. South Africa brought crypto providers under its Financial Advisory and Intermediary Services Act in 2022 for regulation.

The cryptocurrency community believes that South Africa’s forthcoming election will not disrupt the nation’s plans regarding digital assets, according to CoinDesk’s reports.

The Financial Sector Conduct Authority (FSCA) has established a regulatory framework for cryptocurrencies, making South Africa one of the pioneering African countries to do so. In the near future, the authority plans to grant approximately 60 licenses to crypto companies under this new system, with Luno, Zignaly, and VALR already receiving approval. Starting in 2022, South Africa extended its Financial Advisory and Intermediary Services Act (FAIS) to encompass crypto providers, enabling the FSCA to oversee digital assets as financial commodities.

As a researcher studying the regulatory landscape of cryptocurrencies, I would interpret this statement as signaling a progressive perspective on governing the crypto industry. This approach aligns with current global trends and recognizes the increasing importance of blockchain technology in contemporary finance.

On May 29, the presidential election in the country will take place. For the past three decades, the African National Congress (ANC) has held power, but now faces significant competition to its dominance. Consequently, it’s possible that the ANC will need to forge alliances with opposition parties like the Democratic Alliance and the far-left Economic Freedom Fighters in order to secure a majority.

Mpumelelo Ndamane, the CEO of Nuud Money based in South Africa, holds the view that politics will not impede the development of cryptocurrency regulations in the country.

I have consistently advocated for the autonomy of both the South African Reserve Bank and the Financial Sector Conduct Authority over the past three decades. This independence from political influences should not impact our regulatory approach towards cryptocurrencies.

South Africa’s National Treasury has announced that its Intergovernmental Fintech Working Group will examine potential applications of stablecoins and develop a policy and regulatory approach in the remaining months of this year.

As a researcher studying the field, I’ll be exploring how tokenization influences domestic markets. By December, we intend to release a discussion paper detailing the regulatory aspects of tokenization and the construction of blockchain-based financial market infrastructure. Essentially, tokenization involves digitizing real-world assets and recording their ownership on a blockchain.

As a crypto investor, I’d interpret John McCarthy’s statement as follows: In the context of South Africa, the efforts put into digital assets have primarily aimed to tackle issues that are largely devoid of political undertones. The strategy adopted has been consistent with this apolitical approach. Moreover, these initiatives have been spearheaded by an intergovernmental body, which by its very nature tends to be politically neutral.