12th December 2021 > > South Africa.

tl;dr

South Africa is a leading light in the regulatory race to crypto adoption.

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Curious Cryptos’ Commentary – Crypto regulation in South Africa (*)

In stark contrast to the dinosaurs that inhabit the halls of the International Monetary Fund (see yesterday’s CCC), South Africa has ensured that its own regulator is breaking new ground, led by some forward-thinking individuals.

Unathi Kamlana, commissioner of South Africa’s Financial Sector Conduct Authority (FSCA), has announced the launch of a regulatory framework early next year. This development had been previously signposted back in June, when the FSCA said that it would be laying the groundwork for the regulation of cryptos.

Unathi said:

“What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky.”

This statement has all the hallmarks of a mature approach to the regulation of cryptos, encouraging and fostering institutional innovation and development rather than trying to destroy this nascent industry.

…

The CCC has been a long-standing and vocal critic of the leveraged products available to the retail client base in the crypto space.

Unathi and I remain convinced that most “investors” in leveraged products have very little understanding of the risks involved.

Crypto naysayers have often likened crypto markets to a casino. They are wrong to do so, and by doing so they demonstrate their ignorance and prejudice.

But one must concede, undoubtedly in an ungracious manner, that this world view of the naysayers does have credibility when applied to the specific example of retail investors and leveraged crypto products.

…

Unathi is a clearly enlightened man. I guess the CCC is top of his daily reading list.

I do wish other regulators would pick up the phone and talk to him in depth about cryptos.

...

(*) I understand that regulation is a dry subject, and many of you will have only a passing and cursory interest in the developments happening daily in this area.

But regulation is vital for the pace and extent of future crypto adoption by the world.

And we all want that to happen as quickly as possible.

For this reason, regulation will always be a constant theme for the CCC.

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