The Financial Sector Supervisory Authority of South Africa (FSCA) has said that all cryptocurrency exchanges should obtain a licence by the end of this year.
The FSCA has already accepted around twenty applications and more are expected by November 30.
Unathi Kamlana, a representative of the regulator, said that if any company was found to be operating without a valid permit after the deadline, it would be subject to enforcement action, which could include closure of the exchange or a fine.
He further explained:
"There are potential problems for customers when using crypto products, so it is wise to have a regulatory framework in place. It remains to be seen how successful our measures prove to be over time; we will continue to strive and make changes if and where necessary."
In response, the International Monetary Fund (IMF) has demanded that African countries act quickly to protect their citizens from fraudsters using digital currencies.
South African legislators have responded to requests and set up a special forensic unit to help law enforcement agencies investigate financial offences such as blockchain and digital assets.
The FSCA ruling that cryptocurrency exchanges must be licensed to operate in the country by the end of this year is a key step in regulating the cryptocurrency industry and protecting the interests of individuals. It demonstrates the growing relevance and acceptance of cryptocurrencies as a financial instrument. However, it is crucial to remember that regulation must be done properly so as not to stifle innovation and growth in this area.
