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According to recent reports from Bloomberg, the Financial Sector Conduct Authority (FSCA) of South Africa will require all crypto exchanges in the country to operate with licences by the end of this year. The FSCA has set a deadline of November 30 for licence applications.
Unathi Kamlana, the commissioner of the FSCA, stated that the regulator has already received approximately 20 licence applications since the start of the process. The FSCA also plans to take “enforcement action” against non-compliant firms, which could result in fines or closures if they continue to operate without a licence after the November 30 deadline.
Kamlana emphasized the potential risks to financial customers associated with crypto products and the need for a regulatory framework. He stated, “There is potentially serious harm to financial customers when using crypto products, and therefore it makes sense for us to introduce the regulatory framework. Time will tell the effectiveness of our measures, and we will continue to work together with the industry to refine and make changes where and if necessary.”
South Africa is set to become the first country on the African continent to require licences for digital asset exchanges, as regulators and policymakers globally tighten regulations surrounding cryptocurrencies.
Some of the largest crypto trading exchanges on the continent, including Luno and VALR, originated from South Africa. Global platforms like Binance, which operate in the country, will also need to comply with the new regulations.
According to the Cryptocurrency Adoption Index report by Finder, approximately four million South Africans currently own cryptocurrencies. The index tracks the growth of cryptocurrencies worldwide through an ongoing survey of internet users in 26 countries.
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