With this event, cryptocurrency takes another step closer to achieving mainstream recognition across the globe.
The Financial Advisory and Financial Intermediary Services Act (FAIS), passed in 2002 to govern the financial industry in South Africa, has been recently updated to include a definition of crypto assets, according to a notice that was published on October 19 by the Financial Sector Conduct Authority (FSCA). This marks the first instance of crypto assets being regulated in South Africa.
In the FSCA notice, a crypto asset is defined as “a digital representation of value” that may be electronically exchanged, transferred, and stored but is not issued by a central bank. The notice further states that crypto also uses the distributed ledger technology and uses cryptographic algorithms. Finally, the notice states that digital currency holdings are recognized as financial goods.
A financial product is a security, debenture, “any money-making instrument,” or an instrument that grants rights to securities and instruments, according to the FAIS. Financial service companies with a license in South Africa may offer it, whether they are local or foreign businesses.
Irrelevant news, South Africa ranks 30th globally in terms of adoption of cryptocurrencies, according to the Chainalysis 2022 Global Crypto Adoption Index. Further, according to various estimates, somewhere between 10 and 13% of South Africans are cryptocurrency owners.