South Africa is considering amendments to its Financial Intelligence Centre (FIC) Act to mandate reporting of all crypto transactions exceeding 49,999 South African Rand ($2,650), a new budget study indicates.
“The FIC Act requires accountable institutions to report all cash transactions exceeding R49 999 to the FIC, as this information may be valuable during criminal investigations. The authorities will consider measures to extend this requirement to transactions concluded with crypto assets,” the country’s annual budget document said.
The annual budget review, unveiled on February 21, 2024, includes the government’s strategy to encourage the uptake of digital payments, which involves additional regulations for stablecoins and blockchain to ‘enhance the lives and livelihoods of marginalized communities.‘
#Budget2024 #RSABudget2024 pic.twitter.com/ru34A9smWg
— National Treasury RSA (@Treasury_RSA) February 21, 2024
As part of its strategy to advance digital payments, the National Treasury also disclosed an imminent policy adjustment regarding crypto assets, with a specific focus on stablecoins.
“In 2024, the Intergovernmental Fintech Working Group will publish additions to include ‘stablecoins’ as a particular type of crypto asset.
It will conduct analytical work to understand the applicable use cases of stablecoins and to recommend an appropriate policy and regulatory response.”
The working group released a crypto regulation paper in June 2021, which is set to be revised to incorporate stablecoins into the crypto asset category. Additionally, they will complete an assessment of the local stablecoin environment.
The South African Regulatory Body, IFWG, Publishes a Position Paper on Crypto Assets: https://t.co/JKdctzQG7z
— BitKE (@BitcoinKE) June 11, 2021
The working group anticipates releasing a paper by December 2024, detailing ‘the policy and regulatory implications of tokenization and blockchain-based financial market infrastructure.’
Additionally, the South African government, in partnership with Switzerland’s State Secretariat for Economic Affairs and FinMark Trust, will embark on a three-year initiative aimed at conducting four digital payments pilot projects.
The four pilot projects include:
- Community digitalization
- Digitization of payments for informal and low-income workers
- Cross-border remittances
- Cross-border trade
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The initiative’s goal is to bolster small and informal businesses through payment innovation.
South Africa will also conduct a study on the effects of blockchain-based tokenization on the domestic financial markets.
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