South African Government Gazette: Cryptocurrency Assets Now Officially Financial

[Adams-Richard]

As we know it, Cryptocurrency is a type of digital asset that is an unbacked, intangible currency making it not recognized as legal tender by any government or other authority.

But as technology continues to develop and the digital asset has become very convenient for people in terms of paying for goods and services and investing in some areas around the world, certain nations are starting to become receptive to the idea of making crypto a financial product.

On October 19, The Financial Sector Conduct Authority (FSCA), South Africa's financial regulator, published a notice that the country's 2002 Financial Advisory and Financial Intermediary Services Act (FAIS) has been updated to include a definition of crypto assets. This declaration marks the beginning of the long-awaited process of regulating crypto assets, which will produce benefits such as consumer protection and AML/KYC compliance. 

How the Declaration's Definition for Crypto Assets Will Change the Future of Finance

The Declaration also offers a comprehensive definition of crypto assets, which it defines as a digital representation of value not issued by a central bank but capable of being traded, transferred, or stored electronically by both natural and legal persons for the purpose of payment, investment, or other forms of utility; employs cryptographic techniques; and is based on distributed ledger technology.

In addition, The Declaration has the effect of requiring anybody who offers advice or performs intermediary services in crypto assets to be authorized as a financial services provider under the FAIS Act and abide by its regulations.

As defined by FAIS, "advice" includes suggestions, directives, or proposals of a financial nature made in relation to a specific financial instrument. Any act other than providing advice that a person carries out for or on behalf of a client or product supplier with the intention of managing, administering, keeping in safe custody, maintaining, or servicing a financial product that a client has invested in or purchased from a product supplier falls under the definition of "intermediary service”.

Bottom Line

With the rapid growth of Blockchain Technology and the fact that many people have been demanding to regulate crypto assets, it will no longer be impossible that traditional currency will not be the only one essential in terms of paying for goods and services as well as investing.

The declaration made by the Government Gazette marks the beginning of having crypto assets as a financial product not only in South Africa but all over the world.

[gurunanakji777]

If it's real news I must say it's an appreciative step by the SA (FSCA). I hope more countries will follow the same step by regulating it but I must say it is positive news for crypto holders around the world and especially for South African users.