Crypto Assets Regulations in South Africa

The CryptoAssets Association represents the interests of South African users and businesses innovating with crypto assets, who share a need for clarity and certainty in legislation, balanced against a desire for efficiency and waste avoidance in terms of unnecessary spending.

We consider the terms “crypto assets”, “crypto-assets”, “cryptoassets” equivalent.
We use “CryptoAssets” to refer to ourselves, and “crypto assets” to refer to the topic.

Background

2019

The South African Reserve Bank published a position paper on virtual currencies in 2014.

On 16 January 2019 they reviewed their earlier stance and published a set of proposed regulations.

There is also a FAQ entry maintained here.

On a related note, SARS have published comment too.

According to the press release we have until 15 February 2019 to submit a response to the given address, which was tested on 17 January 2019, and confirmed working with a human reply by 24 January 2019.

2020

On 15 April 2020, a news report refers to a new version of the working paper which has been uploaded for viewing here.

The National Treasury has published a media statement and a copy of the position paper.

The Intergovernmental Fintech Working Group (IFWG) has issued a press release linking to a download of the position paper.

On 20 November 2020 the Financial Sector Conduct Authority (FSCA) published a draft declaration of crypto assets as a financial product under the Financial Advisory and Intermediary Services Act (FAIS). Download draft (zip file).

2021

On 11 June 2021 the Intergovernmental Fintech Working Group (IFWG) announced the publishing of the Crypto Assets Regulatory Working Group IFWG’s CAR WG Position Paper on Crypto Assets, and confirmed that crypto assets will be brought into the South African regulatory purview in a phased and structured manner. Press release here.

Be sure to review their updated FAQ for crypto assets questions. There is also a separate crypto assets FAQ in PDF format here: Frequently asked questions about crypto assets

This page will be updated with more info when available, and after review of the latest working paper.

What problems are there?

There are a number of potential issues with the 2019 proposed regulations:

  • Imposes registration requirements on parties who are not compelled under FICA.
  • Written so broadly it could apply to many unintended targets.
  • Fails to address the problems by introducing new problems solved with databases and staff to maintain information on a rapidly changing sector.
  • Fails to mention even one local research paper, of which there are many.
  • Insufficient time provided to comment, a detailed actor-network breakdown of all use cases would take months to prepare.
  • Insufficient use cases, it’s not just about buying and selling tokens, it’s about programming value.

With your feedback (identifying problems, suggesting re-writes) we could submit a more complete response.

What can we do?

Become a member and support the organisation with funding and time!

We have setup the CRYPTOASSETS token on the Counterparty protocol (XCP) for membership purposes, and have issued a new Bitcoin funding address:

  • CRYPTOASSETS funding address
  • 1P9Q29HLYuYgTjstuXt4qd4mUphqLYY487

Please refer to the membership page for more info.