South Africa's FSCA Grants Approval to 59 Cryptocurrency Platforms Amid Regulatory Evolution

South Africa's Financial Sector Conduct Authority (FSCA) has taken a significant step in the regulation of cryptocurrency platforms, approving 59 license applications out of 355 received. This approval comes amid a surge in interest from crypto firms seeking to offer services to South African residents. Felicity Mabaso, a divisional executive at FSCA, revealed this development during a financial conference, indicating that 262 applications are still awaiting review.

To address the influx of applications, the FSCA set a deadline of November 30 for exchanges and cryptocurrency platforms to submit license applications or risk enforcement actions. Commissioner Unathi Kamlana explained that while the application processing is ongoing, it's being conducted gradually due to the sheer number of submissions.

The FSCA's decision to regulate the crypto sector using South Africa's existing Financial Advisory and Intermediary Services Act (FAIS) underscores the importance of providing a robust framework to safeguard users and enforce regulatory measures. Commissioner Kamlana emphasized the need for flexibility, acknowledging that adjustments to the regulatory framework may be necessary as the sector evolves.

While specific details about the approved companies remain undisclosed, it's anticipated that they include a range of crypto exchanges and firms offering custody services. Additionally, regulatory oversight will extend to crypto brokerage firms and payment processors involved in facilitating cryptocurrency transactions.

South Africa has been actively exploring the development of a new regulatory framework for the crypto industry since 2021. Initially slated for completion by the end of 2022, the framework has seen cryptocurrencies classified as financial assets rather than currencies by the South African Reserve Bank (SARB).

In line with this classification, the FSCA advocates for digital assets to be treated as financial products, signaling a proactive approach to regulation as crypto adoption continues to grow in the country. Notably, initiatives like "Pay with Crypto" and the CryptoExpress app have gained traction, reflecting increasing acceptance and integration of cryptocurrencies into the South African financial landscape.

Last week, cryptocurrency exchange Luno became one of the first firms to receive an FSCA license in South Africa, marking a significant milestone in the regulatory journey of the country's crypto industry. As regulatory efforts progress, stakeholders will continue to monitor developments closely to ensure a balance between innovation and consumer protection in the burgeoning crypto space.

By fLEXI tEAM