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Report: South African Financial Institutions Will Soon Offer Services Related to Cryptocurrencies

About 73 applicants who are seeking a license to offer crypto products in South Africa are already registered as accountable institutions with the Financial Intelligence Centre, an executive at the crypto exchange Luno has said. According to the Luno executive, this may be an indication that regulated financial institutions are planning to add crypto to their product offerings.

Only a Few Non-Licensed Financial Service Providers Have Applied

According to Tarris Arnold, the business development manager at the crypto exchange Luno, a majority of the entities that have applied for licenses to offer crypto-related products are financial institutions. This, according to Arnold, may be an indication that many regulated financial institutions plan to add crypto to their offerings.

In his comments published by Techcentral, Arnold said only a few of the license applications received by the country’s financial sector watchdog, the Financial Sector Conduct Authority (FSCA), were submitted by non-licensed financial services providers.

As reported by News on Dec. 3, the FSCA had received 93 applications from both licensed financial service providers and new applicants by Nov. 30. The Luno executive has now revealed that 73 of these applicants are already registered as accountable institutions with South Africa’s Financial Intelligence Centre.

Remarking on the growing interest in crypto assets by institutions that are unconvinced by this asset class’s value proposition, Arnold said:

“Even financial services companies that don’t buy into the fundamental value of crypto or its other use cases see value in the volatility associated with crypto assets. Volatility is beneficial as it often equates to greater profit margins. In addition, crypto is a non-correlating asset class and thus provides some mitigation for investments in traditional markets.”

Meanwhile, the Techcentral report suggested that once the crypto space becomes a regulated industry, institutional investors such as pension funds will likely start investing in digital assets.

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