The South African Financial Sector Conduct Authority (FSCA) has submitted a draft resolution that equates Bitcoin and other cryptocurrencies to financial products.
The new rules will apply to cryptocurrency service providers, including exchanges, advisors and brokers. In order to operate in the country, all of them will have to register as financial service providers.
Noting the growing interest in digital currencies, the regulator stressed that the document does not affect the status of crypto assets in the context of other laws and does not aim to regulate them or legitimize them.
The FSCA declared that the draft resolution is only a temporary step aimed at reducing certain risks inherent in crypto assets.
The regulator added that the document is taken in anticipation of other decisions, which are considered by the Working Group on the regulation of crypto assets.
Earlier this year, the Intergovernmental Working Group on Fintech presented a document according to which cryptocurrency cannot obtain the status of a legal tender in South Africa, and its use should be strictly controlled.
Africa and the adaptation of cryptocurrencies
Recent years have shown us that Africa is developing very intensively from the point of view of cryptocurrencies. Recently, more and more cryptocurrency owners are appearing on the continent, the volume of trading is increasing and the regulation of cryptocurrency activity is being improved. It is evident that Africa is moving from month to month towards the greater adaptation of cryptocurrencies.
Bitcoin in Africa
In Uganda, Nigeria, South Africa, Ghana, and Kenya, one of Google’s most popular search terms was “Bitcoin.” As you can see in these circles, the topic of the leading cryptocurrency is hot.
Africa is one of the most promising regions in the world for cryptocurrency adaptation. The continent has great opportunities for such activities and can benefit from it exceptionally.
Is the introduction of cryptocurrencies in Africa a good solution?
Companies interested in adopting cryptocurrencies on the world’s second-largest continent stress that Africa is a very good place for mass introduction of crypto in connection with its young population, frequent monetary crises, currency collapses, poor banking services, and expensive payment.
A simple transfer fee is up to 9% of the total transaction fee, so it is not surprising that Africans are interested in alternative solutions.
Money transfers in Africa
Africa is home to about 1,070 million people, one-seventh of the world’s population, so large technology companies or stock exchanges such as Binance are focusing on the region. Already in 2018, the largest crypto-finance exchange began its expansion in Africa, offering its services to citizens of Uganda, Nigeria, and South Africa.
The growing popularity of cryptocurrencies
Nigeria, as the most populous country, has long dominated the continent’s trade, but the Arcane Research report shows that South Africa has the highest percentage of people with cryptocurrencies at 13%, followed by Nigeria (11%).
The South African Financial Supervision Authority has issued a document stating that activities related to digital currencies can no longer be outside the regulatory sphere.
P2P (peer-to-peer) payments, defined as all financial services that help transfer money between two individuals in a simple and fast way, are rising, breaking all records in Africa.
In Nigeria, P2P trade reached a record weekly turnover of more than $9 million. Kenya also sees growth in trading. All recent growth has led to the fact that P2P from sub-Saharan Africa has overcome Latin America.
Given the size of Africa and its need for a stable digital currency, we can expect intensive development and mass adaptation of cryptocurrencies in the coming years. Such a financial breakthrough across the continent will contribute to the overall development of the whole of Africa in various sectors.