A self-regulatory organisation aiming at controlling cryptocurrency will be established by the South African Reserve Bank (SARB). The SARB doesn’t currently oversee or regulate the cryptocurrency market, but it will create a unit to do just that.
The move is in interest of investors and to prevent risk. The self-regulatory organisation (SRO) will establish its own rules and standards. Bridget King, the central bank’s banking practice director said:
“Regulating cryptocurrencies prematurely could have the negative consequence of throttling the growth and innovation of the industry. In addition, if laws are drafted based on existing technology, which is still in its growth phase, there is a risk that the technology may have moved so much by the time the legislation is enacted, that the legislation is obsolete or requires updating almost immediately to align with the latest technology.”
The SRO will be taking measures to lower the risk, while helping South African cryptocurrency industry to remain competitive.
Last year, the South African Revenue Services (SARS) announced that it will look into methods of tracking cryptocurrency trades. The goal is to fight tax evasion.
In January this year, SARB said that it will establish a fintech task force which will review the stance toward private cryptocurrencies regulatory issues.