South Africa has classified cryptocurrency assets as financial products, making this a step forward in regulating them.
Earlier this year, the South African Reserve Bank (SARB) announced that due to the high influx of interest in cryptocurrencies in the country’s financial system, the jurisdiction is moving forwards with regulating this sector.
On October 19th, the Financial Sector Conduct Authority (FSCA) of South Africa issued a declaration acknowledging crypto-assets as financial products and thus subject to the provisions of the Financial Advisory and Intermediary Services Act, 2022.
1. Includes crypto-assets under the Act’s definition of financial products as stated in Section 1 of Definitions and application, paragraph (h):
“(h) any other product similar in nature to any financial product referred to in paragraphs (a) to (g), inclusive. declared by the registrar. after consultation with the Advisory Committee, by notice in the Gazette to be a financial product for the purposes of this Act;”.
2. Defines ‘crypto-assets’ as “a digital representation of value that:
- Is not issued by a central bank, but is capable of being traded, transferred or stored electronically by natural and legal persons for the purpose of payment, investment and other forms of utility
- Applies cryptographic techniques
- Uses distributed ledger technology