The regulatory framework for cryptocurrencies is still pending review as the South African Reserve Bank (SARB) is working with the National Treasury, the Financial Services Board and the Financial Intelligence Centre to evaluate what they consider to be the best approach.
SARB has recently created an investigative unit to monitor the crypto space and to set up a proof of concept (PoC) for DLT-based interbank clearing and settlement. A priority for the SRO would be to ensure the nascent industry is not over-regulated so it can blossom. In January, SARB established a fintech task force to review the central bank’s position on private cryptocurrencies and addressing regulatory issues such as clearing and settlement risks, exchange control impacts, monetary policy and financial stability.
The surge in popularity of cryptocurrencies has contributed to the opening of at least 15 new trading venues in South Africa within the past year alone. The country’s central bank has launched a program that will trial JPMorgan’s Quorum blockchain in interbank clearing and settlement.
According to Luno, a global wallet and cryptocurrency exchange that boasts 1.5 million users spread across 40 countries, South Africa accounted for 37% of Bitcoin transactions occurred in November 2017, when the price of BTC was hovering in the $10,000 range.
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