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South Africa Approves 59 Crypto Businesses

Last Updated March 14, 2024 12:40 PM
Eddie Mitchell
Last Updated March 14, 2024 12:40 PM
By Eddie Mitchell
Verified by Peter Henn
Key Takeaways
  • South Africa’s regulators say they have received 355 crypto operator license applications.
  • Crypto firms regulation will fall under under existing laws and legislation.
  • South African regulators will address “gaps” as they arise.

South Africa’s financial regulator will grant 59 crypto firms their operating licenses by the end of the month, with a further 262 applications still in progress.

The announcement comes two years after the nation’s Financial Sector Conduct Authority (FSCA) ruled  crypto assets were financial products. This meant, therefore, they would fall under financial product regulations in order to provide greater consumer protections, as well as establish clear rules for crypto-related companies.

Crypto Businesses Go Legit

In June 2023, South African crypto firms looking to operate in the country were told to apply  for a license from the FSCA.

Given only six months to do so, the FSCA saw a swell of applications. Speaking at a conference, FSCA divisional executive Felicity Mabaso confirmed that the regulator had received a total of 355 applications, as per a Reuters report .

FSCA Commissioner, Unathi Kamlana also told  Bloomberg: โ€œWe are processing those licensing applications. Weโ€™re doing so in a phased kind of manner given the numbers.โ€

South Africa’s Crypto Push

Instead of mulling over the near-infinite intricacies and implications of crypto and creating entirely new regulatory regimes to govern them, South Africa opted to bring them under existing legislation. To be precise, they will fall under the Financial Advisory and Intermediary Services Act (FAIS).

Commissioner Kamlana placed emphasis on the current frameworks covering most of the regulatory gaps, explaining:

โ€œIf you wait for the Rolls-Royce kind of regulatory framework, you still have those risks anyway.โ€

Instead, the FSCA will move forward with a more supervisory approach. Kamlana noted that throughout the process, it may discover “gaps that cannot be closed by the existing framework” with FAIS. Therefore, Kamlana said, the FSCA is open to building on those gaps “as we discover what they are”.

Thanks to its considerably proactive approach to regulation, South Africa has established itself as one of the largest crypto markets in Sub-Saharan Africa .

It ranks 31st globally in the Chainanlysis “2023 Global Crypto Adoption Index ” report. This latest push to legitimize crypto operators could see it climb the ranks

BRIC by BRIC

As one of the original members of the BRICS intergovernmental organization, South Africa is also positioned to capitalize on this. This is because BRICS members could see this as a major opportunity to open crypto enterprises in South Africa.

As part of the BRICS commitment to collaborative economic and fiscal development across all fronts, the bloc recently announced a blockchain and crypto-based international payment systemย as a means of solidifying these efforts.

In this sense, BRICS’ shift toward blockchain and crypto could be a huge boon for BRICS members. South Africa, now prepares to bring its national crypto industry into maturity, is chief among these.

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