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Regulation: Cryptocurrency Operators in South Africa May Soon Be Required to Report Transactions Over $2,650

According to a recent budget analysis, South Africa is thinking of amending the Financial Intelligence Centre (FIC) Act to require the reporting of all cryptocurrency transactions that surpass 49,999 South African Rand ($2,650).

According to the FIC Act, responsible institutions must notify the FIC of any cash transactions that total more than R49 999 since they could be useful in future criminal investigations. According to the nation’s annual budget statement, “the authorities will consider measures to extend this requirement to transactions concluded with crypto assets.”

The government’s plan to promote the use of digital payments is included in the annual budget review, which was released on February 21, 2024. It calls for more stablecoin and blockchain legislation in order to “enhance the lives and livelihoods of marginalized communities.”

The National Treasury also revealed an impending policy change pertaining to crypto assets, with a focus on stablecoins, as part of its plan to develop digital payments.

The Intergovernmental Fintech Working Group plans to provide updates in 2024 that will add “stablecoins” as a specific category of digital asset.

It will carry out analytical work to comprehend the relevant stablecoin use cases and to suggest a suitable regulatory and policy response.

In June 2021, the working group published a crypto regulatory paper; this document will be updated to include stablecoins in the category of crypto assets. They will also finish evaluating the stablecoin ecosystem in the area.

A document outlining “the policy and regulatory implications of tokenization and blockchain-based financial market infrastructure” is expected to be released by the working group by December 2024.

In addition, the South African government will start a three-year effort to carry out four pilot projects for digital payments in collaboration with FinMark Trust and the State Secretariat for Economic Affairs of Switzerland.

The four pilot projects include:

  • Community digitalization
  • Digitization of payments for informal and low-income workers
  • Cross-border remittances
  • Cross-border trade

The program aims to support small and informal enterprises by implementing innovative payment methods.

A study on the impact of tokenization based on blockchain technology on the domestic financial markets will also be carried out in South Africa.

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