Despite lawmakers’ support for monitoring crypto assets, legislators have asked how this sector can be regulated.
In order to protect consumers and regulate the market, the Financial Sector Conduct Authority (FSCA) announced on Wednesday that crypto assets will be classified as financial products in South Africa.
According to Democratic Alliance finance spokesperson Dr Dion George, regulating the cryptocurrency market is the right thing to do because otherwise, it will become a perfect breeding ground for abuse and terrorist activity.
The FSCA published a notice on Wednesday which defined crypto assets as “a digital representation of value”.
According to George, crypto isn’t like a normal currency that is issued by a central bank.
In addition, a difficult regulator could have a hard time regulating it since it involves exchanges between two individuals.
“As much as I understand why they might want to, I have to question, however, how exactly you implement that given the nature of the technology and the fact that it is not intended to be regulated and is more of a one-to-one interaction rather than involving a third party.”
As part of their efforts to gain further clarity on how crypto assets will be regulated, the FSCA and finance minister will be asked several questions.
The FSCA has published the declaration of Crypto Assets as a financial product under the FAIS Act.
The declaration, brings providers of financial services in relation to crypto assets within the FSCA’s regulatory jurisdiction: https://t.co/sUd0Mqu6JE#crypto pic.twitter.com/bsYINvPwUl
— FSCA South Africa (@fscasouthafrica) October 20, 2022