SARB calls on the public to comment on consultation paper on crypto assets

As part of its first steps to regulate crypto assets such as Bitcoin and Ethereum, The South African Reserve Bank (Sarb) today called on the public to provide comments on a consultation paper on crypto assets.

The Reserve Bank, together with other members of the Intergovernmental Fintech Working Group (IFWG), released the consultation paper yesterday (15 January).

In addition to the Reserve Bank, the working group includes the National Treasury, Financial Intelligence Centre (FIC), Financial Sector Conduct Authority (FSCA), and the South African Revenue Service (SARS).

In a statement today (16 January), The Reserve Bank called on the public to email their comments to email SARB-FINTECH@resbank.co.za by 15 February.

Members of the public have until 15 February to comment on a consultation paper on crypto assets released by The Reserve Bank

“Input received will feed into a crypto assets policy paper that will set out the manner in which crypto assets will be managed within the regulatory perimeter in South Africa,” the Reserve Bank said in the statement.

The consultation paper (see a PDF copy here) highlights the benefits and risks of the buying and selling crypto assets, as well as facilitation of payments with crypto assets. In addition, the paper looks at how crypto asset regulation has been handled in other countries and provides recommendations for dealing with crypto assets from a South African perspective.

Proposals for regulating crypto assets

Some of the regulatory approaches proposed in the document include:

• Crypto assets remain without legal tender status and should not be recognised as electronic money.

• Crypto asset service providers should comply with AML/ CFT requirements. The IFWG has proposed that the FIC include crypto assets service providers as accountable institutions. It means that these crypto assess service providers will be under legal obligation to comply with anti-money laundering and the combating of financing of terrorism (AML/CFT) requirements in the FIC Act. “However, the FIC does not set predefined conditions or market entry requirements for such business — therefore, South Africa will fall under a ‘limited regulatory’ framework,” proposes the paper.

• Registration of crypto asset service providers. The IFWG has proposed that crypto asset trading platforms, crypto asset digital wallet providers, crypto asset safe custody service providers, and crypto asset payment service providers be registered. “A useful starting point for regulatory intervention at this stage is through registration. The objective of the registration process is to specifically gain further insights from the market participants,” suggests the paper.

Read more: Will regulators provide more clarity on cryptocurrency in 2019?

Featured image: Marco Verch via Flickr (CC BY 2.0)