South African authorities will equate cryptocurrencies with financial products

Financial authorities in South Africa intend to equate digital currencies with financial products. The Financial Sector Supervisory Authority (FSCA) has already submitted a relevant regulation that will affect cryptocurrency service providers. For legal activity on the territory of the country, they will have to undergo compulsory registration.

“The implementation of the project is expected to result in improved disclosure of information to clients, identify the risks associated with investing in cryptoassets, and ensure the adoption of a more robust recommendation process (including proper risk assessment) when intermediaries advise clients to buy digital instruments. Licensing of intermediaries is also necessary to improve quality, ”reads the ministry’s explanatory note.

It is worth noting that this year, the Intergovernmental Fintech Working Group (IFWG) has already submitted a document emphasizing that cryptocurrencies cannot be recognized as legal tender in South Africa.