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The main financial regulator in South Africa, the Financial Sector Conduct Authority (FSCA), has reached a critical point in its evaluation of applications from cryptocurrency service asset providers (CASPs). The FSCA’s Licensing Executive Committee will address 36 of the 128 applications that are currently pending at its meeting on December 12.
The FSCA has decided to assess CASP petitions in stages. Twenty-two further applications are scheduled for deliberation on February 13 after the December conference, and the remaining fourteen are scheduled for March. A thorough examination, comprising Know Your Customer onboarding, data protection, cyber risk management, conflict of interest management, complaint handling, and credit counterparty risk management, is part of the Authority’s evaluation methodology.
On November 30, the FSCA concurrently issued its “Crypto Assets Markets Study” for 2023. According to the survey, 60% of all cryptocurrency traded in South Africa is made up of “unbacked crypto assets,” which include cryptocurrency other than stablecoins (which have a 26% market share) and nonfungible tokens (NFTs, which have a 4% market share), as well as other coins that are issued centrally.
The record-breaking monthly transaction value in November 2022—which exceeded 8 billion rand, or around $427 million—is noteworthy because it shows how active the South African cryptocurrency market is becoming.
The FSCA sent out a strong warning in July 2023, requiring all CASPs operating in the nation to get a license by the end of the same year. The agency is prepared to take “enforcement action”—which might include penalties or even closure—against unauthorized operations after the deadline.
The regulatory environment in South Africa is in line with the worldwide trend of governments actively participating in the developing cryptocurrency market. In order to protect the integrity and security of the cryptocurrency market, the FSCA emphasizes the significance of complying with strong regulatory frameworks as it moves through the CASP applications.