South Africa aims to enforce a licensing system on cryptocurrency businesses that operate within its borders. The decision was made at a time when the most developed economy in Africa, which has one of the highest rates of cryptocurrency users in the area, has also been experimenting with central bank digital currencies (CBDCs). By November of this year, crypto firms are anticipated to submit their license applications.
The Financial Sector Conduct Authority (FSCA) has received around twenty license applications from crypto exchanges since opening the process. Firms have until November 30th to apply for a license, and the regulator plans to take enforcement action against those operating without one.
The move is in line with global trends of tightening regulations in the cryptocurrency sector, driven by concerns over company collapses and scams. Europe has approved its first set of rules for the crypto industry, and Hong Kong has implemented new regulations to license exchanges.
While the approval of the Financial Services and Markets Bill 2023 in the UK and the passing of South Korea’s “Virtual Asset User Protection” bill are significant steps in regulating the crypto industry, the UK bill aims to revive the economy by establishing rules for safe crypto asset adoption, attracting US crypto companies while maintaining high regulatory standards. It prioritizes individual protection and aims to create an advanced and accessible financial industry serving the needs of the people.
South Korea’s bill prioritizes investor safety, bringing crypto under the jurisdiction of the Financial Services Commission, supervising crypto service providers, and addressing concerns of market manipulation. South Korea aims to expedite stablecoin regulation and compete with Hong Kong to attract crypto investors. These regulatory efforts showcase a commitment to protecting investors and fostering a secure environment for the crypto industry in both countries.