South African Regulators Weigh Crypto Asset Regulation

The South African Reserve Bank (SARB) and the Financial Sector Conduct Authority (FSCA) have released a joint communication regarding crypto assets used for payment purposes.

According to the SARB, any activity involving crypto assets that meets the definition of 'intermediary services' under the Financial Advisory and Intermediary Services Act (FAIS Act) requires a license. This includes transactions such as administration, safe custody, trading on behalf of a client, providing trading platforms, sales, marketing, and advice.

The SARB also clarifies that crypto assets are not considered 'money' or 'funds' under the National Payment System Act (NPS Act) framework, and therefore do not fall within its application. This means that licensed crypto asset service providers must adhere to all applicable requirements of the FAIS Act, but not those related to the NPS.

While stablecoins are considered a subset of crypto assets for these purposes, foreign currency-pegged stablecoins may pose risks to monetary policy transmission due to potential 'dollarisation'.