The South African Reserve Bank (SARB) recently declared that it will be taking a more tactical and strict approach to the cryptocurrency industry. Released as a consultation paper, the national bank outlines the risks and benefits that cryptocurrency presents and explained how changes will be made in order to reduce the risks and take advantage of the benefits.
Coindirect’s views on cryptocurrency regulations
Coindirect CPO Stephen Young commented on the news, saying that the exchange is in support of the regulations laid out by SARB:
“Coindirect welcomes the recent amendments to the Financial Action Task Force (FATF) Recommendations. Having clear regulation that helps protect consumers while allowing the development and growth of this nascent industry is a positive step that will help speed adoption and foster responsible innovation”.
Coindirect, which operates from London and Cape Town offices, is upfront and open in its approach to the cryptocurrency industry, according to its website:
“Coindirect has the track record, infrastructure and expertise to provide you with the best digital currency experience the world has to offer. To make sure we comply with international standards in terms of AML and CFT, our company is registered as a designated business with the Isle of Man Financial Services Authority.”
The international standards with which Coindirect comply include the heightened regulations that SARB is moving towards. In order to deploy techniques which will help in combating the financing of terrorism (CFT) and anti-money laundering (AML), Coindirect supports regulations which align with its views of protecting its clients.
In the consultation paper, SARB outlines the shift from a level of regulations whereby cryptocurrencies are ‘recommended’ to a status where the digital tokens are ‘regulated’:
“[in order to achieve anti-money laundering/combating the financing of terrorism (AML/CFT) requirements, more specific requirements will be necessary in line with the recent amendments to the Financial Action Task Force (FATF) Recommendations”.
As it stands, the South African government does not intend on banning trading of cryptocurrencies. The ‘limited regulations’ which will be implemented are in favour of making cryptocurrency and Bitcoin of a more regular standard in order to protect individuals rather than to maintain strict control over the digital financial market.
Disclosure: Coindirect and CoinInsider have investment from Balfour Venture Capital.