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Cryptocurrency exchange and wallet operator Luno believes that South Africa’s new regulatory regime for crypto assets signals the beginning of greater mainstream adoption.
“It is groundbreaking that crypto is now becoming part of the mainstream financial services sector in South Africa as a regulated financial product,” said Luno South Africa country manager Christo de Wit.
In addition to licensing new crypto asset service providers, the Financial Services Conduct Authority (FSCA) will allow existing players to offer crypto-related products.
Already-licensed traditional institutions will be able to include exposure to crypto assets in their offerings by adding the crypto assets category to their existing financial service provider licences.
De Wit explained that licensed banks and asset managers can introduce crypto assets to their large customer bases.
Financial advisors can also advise their clients about responsible crypto asset investing.
“In addition, traditional financial institutions can include exposure to crypto for their clients by partnering and engaging with experienced, credible and soon-to-be licensed firms like Luno,” said De Wit.
Luno lays claim to being South Africa’s largest cryptocurrency exchange by retail customers.
“As a regulated financial product, crypto assets will more likely form part of investment portfolios. In this way, regulation has cleared a path for greater adoption of crypto assets in the mainstream financial system.”
Luno’s comments come after the Financial Services Conduct Authority (FSCA) indicated that it is almost ready to issue its first 59 crypto asset service provider licences.
“A substantive regulatory framework on crypto assets will boost confidence among investors, institutions, and the public,” De Wit said.
De Wit said that there are millions of crypto users in South Africa who must be able to easily identify providers that meet regulatory requirements.
“Licensing will raise standards, set barriers to entry for fly-by-night operators and protect consumers,” he said.
“Licensed service providers will need to ensure that their systems and processes meet regulatory standards.”
According to the FSCA, about 262 crypto asset provider applications are in progress.
It closed applications for the first round of crypto asset service provider licences on 30 November 2023 after declaring crypto assets as financial products under the Financial Advisory and Intermediary Services Act.
Luno reaffirmed that it has applied for its licence and said the FSCA has indicated that all those awarded will be informed in due course.
“This regulatory and licensing framework is the start of a new chapter for our industry,” said De Wit.
“We look forward to more institutional engagement and investment, bringing South Africans more ways to safely invest and enjoy the benefits of crypto assets.”
source:South Africa’s coming crypto revolution (mybroadband.co.za)
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