The South African Treasury anticipates the recommendations to add crypto asset service providers as accountable entities in the Financial Intelligence Centre (FIC) Act to be approved this year, according to the Treasury.
The initiative to regulate crypto service providers comes as South Africa tries to address the Financial Action Task Force’s findings of “serious deficiencies in the country’s anti-money laundering and counter-terrorist financing mechanisms” (FATF).
The South African Treasury notes in its latest budget review paper that the proposed revisions, which have been up for public comment since June 2022, will bring the FIC Act in line with the FATF’s requirements.
“This change would address concerns around money laundering and terror risk financing through crypto-assets and align the act to the standards set by the FATF for virtual assets and related service providers,”
That’s, according to the treasury in budget review document.
The Treasury’s new comments on crypto assets come after the Intergovernmental Fintech Working Group (IFWG) produced a position paper calling for crypto asset regulation many months ago. However, as Bitcoin.com News noted at the time, the IFWG stressed that this call did not imply that it was embracing cryptocurrencies.
Meanwhile, according to the budget review paper, the Treasury expects crypto assets to be classified as financial goods under the Financial Advisory and Intermediary Services Act (FAIS). According to the Treasury, the goal of this announcement is to protect consumers.
In addition to changing existing regulations, the review paper indicates that work is being done to have crypto assets regulated under the country’s 1961 Exchange Control Regulations.
In the case of stablecoins, the document stated that the IFWG will publish a follow-up study later this year that will focus on the dangers posed by the assets. The South African Treasury is also looking into measures to “control electricity-intensive crypto mining,” which it argues is “environmentally detrimental,” according to the document.
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