South Africa’s crypto regulator has reported progress in the licensing process for crypto asset service providers (CASPs), with 50 license applications currently under review.
The Financial Sector Conduct Authority (FSCA) is set to announce the status of these applications in the coming weeks.
This development signals a significant move towards embracing crypto technology within the country.
Timeline for License Issuance
Gerhard van Deventer, the head of enforcement at the FSCA, confirmed that the licensing committee is reviewing 50 applications and expects to make decisions on their approval shortly.
Although 105 companies initially applied for the CASP license, only 50 applications were presented to the licensing committee in December.
Notably, 20 companies withdrew their applications during the process.
Positive Industry Validation
The requirement for licensing in the crypto sector is viewed as a positive step, validating the operations of crypto companies, according to Christo De Wit, Luno country manager for South Africa.
The move indicates a shift in the regulatory landscape, aligning with the evolving nature of the crypto industry.
Evolution of South Africa’s Crypto Regulatory Landscape
South Africa’s journey towards crypto regulation began in November 2018 when the South African Reserve Bank (SARB), in collaboration with the FSCA, South African Revenue Services (SARS), and the Financial Intelligence Centre (FIC), established the Crypto Assets Regulatory Working Group.
This initiative aimed to understand crypto operations, associated risks, and rewards. Brenton Naicker, a stakeholder in the working group, emphasized its significant contribution to fostering more crypto-friendly regulations.
In July 2021, the working group published a position paper with recommendations for a revised policy on crypto assets.
Subsequently, SARB issued guidelines in August 2022 for financial institutions on serving crypto clients.
The FSCA declared crypto assets as financial products in October 2022, bringing them under its regulatory jurisdiction.
The licensing application process for CASPs was then opened in June 2023.
Industry Responses and Growth Outlook
Crypto startups and companies offering crypto products view the licensing initiative positively.
Fintech startup Stitch, with a successful funding track record, recently introduced its “Pay with crypto” product.
According to Junaid Dadan, Stitch’s CEO, obtaining a crypto asset service provider license will formalize the industry, encouraging further adoption.
Cedric Jeannot, CEO of neobank Be Mobile Africa, also believes that licensing will contribute significantly to the growth of the crypto ecosystem in the country.
It provides a framework for proper regulation, serving the commercial interests of all parties involved.
The imminent decisions on the 50 license applications will mark a crucial milestone in South Africa’s crypto regulatory journey, shaping the landscape for industry players and fostering a more secure and regulated environment.
Binance commentary from Hannes Wessels, General Manager, Southern and Francophone Africa, Binance
South Africa’s Financial Sector Conduct Authority (FSCA) is set to issue licenses to crypto asset service providers (CASPs) in the next few weeks.
We are excited about this development and commend the work of the Financial Sector Conduct Authority (FSCA) for its commitment to innovation-driven policies.
This is a positive step for both the cryptocurrency industry and South Africans. This move will contribute to clarity, user protection, and much-needed confidence in the ecosystem.
Binance acknowledges the value of operating in a stable regulatory landscape and has dedicated considerable time to applying for licenses, registrations, and authorisations across the globe.
We remain committed to working with regulators and policymakers to shape policies that protect consumers, encourage innovation, and propel our industry forward.
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