Since October 19, 2022, cryptographic assets have been recognized as financial products within the meaning of the law relating to financial advice and intermediaries. Cryptocurrency trading in the country has seen meteoric growth as more civilians have adopted its pedigree. According to some media reports, the daily value of crypto asset trading in South Africa exceeded R2 billion for the first time in January 2021. Cryptocurrency ownership in South Africa is lower than the global average of 15%, but higher than countries like the United States (10%), Germany (8%) and the United Kingdom (6%). %).
48% of young people aged 18 to 34 dominate cryptocurrency ownership
“For the Financial Services Conduct Authority (FSCA), as an economic activity, cryptocurrency activities must be regulated by the Financial Advisory and Intermediary Services Act (FAIS).” Young people have been touted as the majority traders of cryptocurrencies in the country. This is because they have embraced technology and all the digital transformations it brings.
According to Finder.com's latest Cryptocurrency Adoption Index, 48% of young people aged 18-34 dominate cryptocurrency ownership in South Africa. Cryptocurrency trading has also made it easy for South Africans to bypass traditional banking services.
Strict regulations in preparation
South Africa's economic activity is governed by the Financial Sector Conduct Authority (FSCA). This means that trading in cryptocurrencies falls under the regulatory remit of the FSCA. She has now revealed that all crypto activities must be regulated by the Financial Advisory and Intermediary Services Act (FAIS).
This means that any person who provides advice or intermediary services related to crypto assets must be licensed as a financial services provider or as a representative of such a provider, with a deadline of November 30, 2023 to apply for such a license.
While government regulation and speculation regarding crypto are often seen as a rather negative interaction, in this case they have a much more positive connection. This could literally be projected as a crypto trading boom in the country.
Is South Africa ready to adopt cryptocurrency as its official currency?
In April 2022, the Central African Republic announced the high-profile cryptocurrency Bitcoin as its official currency. This makes it the first African country and the second in the world to do so. Could South Africa end up on this cruise ship? The chances are very high given that the government is implementing the FAIS Act.