South African Central Bank Reverses Course on Crypto Regulation
South Africa will look to introduce a regulatory framework for cryptocurrencies, said Kuben Naidoo, Deputy Governor of the South African Reserve Bank (SARB).
"Our view has changed and we now regard it [cryptocurrency] as a financial asset and we hope to regulate it as a financial asset," he said at a PSG Think Big series dialogue. "There has been a lot of money that has flowed in and there is a need to regulate it and bring it into the mainstream."
Regulations, he said, could take 12 to 18 months but some KYC rules and licenses for exchanges can be implemented earlier.
Naidoo: "Once the ministers amend schedule one of the FIC (Financial Intelligence Centre) Act then we can begin to move. It will probably still take us around 12 to 18 months to get all of our ducks in a row, get everything in place. But I don't think that this has to happen in a big bang. I think we can start to have some KYC rules. We can start to license exchanges."
He also said the Reserve Bank is "quite close to finalizing the exchange control rules and requirements."
In an additional development, Naidoo indicated the possibility of South Africa's very own central bank digital currency (CBDC).
"The issue about whether the central bank itself should issue a digital currency and we are experimenting, we are learning," said Naidoo. "We've had two pilots we've done. We've created a central bank digital currency in a test environment...But I think we are probably several years away from that."
Naidoo is a member of the SARB monetary policy committee, overseeing the financial stability and currency cluster, which incorporates the SARB’s Economic Statistics Department, the National Payment System Department, the Fintech Unit, the Financial Stability Department, and the Risk Management and Compliance Department, according to his biography on SARB's website.