South Africa’s crypto regulation should balance customer protection and promoting investments

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Thu, 28 Sep 2023, 02:48 PM
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South Africa’s crypto regulation should balance customer protection and promoting investments

Greg Rodriguez, the CFO of the South African crypto exchange Revix, and Thomas Lobban, the legal manager at Tax Consulting South Africa, welcome regulation but are concerned that the regulation must not scare away investors.

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Sun, 31 Jul 2022, 23:59 pm UTC

As South Africa is poised to regulate its crypto industry, members of the crypto community are naturally a bit apprehensive as to what the upcoming rules could mean to the country’s digital asset space. Two crypto experts said they welcome regulation from the government as long as it strikes a balance between the need to protect investors and the need to stimulate interest in crypto assets investments.

Greg Rodriguez, the CFO of the South African crypto exchange Revix, and Thomas Lobban, the legal manager at Tax Consulting South Africa, shared their stance on the looming regulation in a joint statement shared with Bitcoin.com. While they’re not against regulating the crypto industry, the experts’ only concern is that the regulation must not scare away investors.

The two experts released their joint statement following remarks made by South African Reserve Bank (SARB) deputy governor Kuben Naidoo. Various reports quoted the bank official as saying that the country can expect its own crypto regulation to be in place by the end of 2023.

The South African Reserve Bank made the decision to regulate crypto after it saw a lot of money going into these digital assets and wanted them to go “into the mainstream.” The official also clarified that the monetary authority now views crypto as a financial asset.

“Our view has changed and we now regard [cryptocurrency] as a financial asset and we hope to regulate it as a financial asset,” Naidoo said during a webinar. “There has been a lot of money that has flowed in and there is a need to regulate it and bring it into the mainstream.”

Lobban expressed satisfaction with the SARB’s decision to classify crypto as a financial asset. “Now we know crypto will be seen as a financial product with all the associated controls and requirements in place, including FIC [Financial Intelligence Centre], tax and exchange control compliance,” he said.”

Meanwhile, Rodrigues said that his crypto exchange Revix welcomes regulation of the country’s crypto industry. ”Crypto is global and highly fluid, tending to flow into markets where regulations are welcoming, and just as easily out of those that are not,” he said.

The two experts are urging regulators including the SARB to come up with policies that are balanced. If done correctly, they believe that it “could see funds stream into South Africa while growing the country’s burgeoning crypto ecosystem.”

Lobban encouraged the monetary authority to include the public and other stakeholders in the policy consultation to “ensure the policies it develops are informed by the interest of all parties who will be affected by them.” Meanwhile, Rodriguez identified crypto ownership and custody as an important factor that needs to be carefully considered by regulators.

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