South Africa is ready to set crypto asset controls to curb the growing cases of fraud and scams and improve the management of cross-border flows.

According to a statement by the Intergovernmental Fintech Working Group (IFWG) and the Financial Sector Conduct Authority (FSCA), the nation will start regulating cryptocurrencies with a “structured approach.”

“Crypto assets will be brought into the South African regulatory purview in a phased and structured manner. It is, however, reiterated that with or without regulation, crypto assets remain inherently risky and volatile,” read the paper published Friday.

The position paper by the group makes several recommendations for the creation of a regulatory framework.

The IFWG recommended imposing anti-money laundering rules on crypto service providers. It further highlighted monitoring cross-border financial flows, applying financial-sector laws to the crypto industry, and the need for better financial literacy for retail customers.

The backing of the position paper will present the country’s regulators with the required tools to begin implementing measures as per recommendations.

“The dynamic development of the crypto market must continue to be pro-actively monitored, including maintaining knowledge on emerging international best practices through standard-setting bodies” and other measures, IFWG said.

This will help provide the crypto market participants the much-needed clarity which can further help the crypto industry grow in the country.

In January, the daily value of crypto-asset trading surpassed 2 billion Rand ($147 million) for the first time in South Africa.

The same month, Brandon Topham, head of enforcement for the FSCA, had said regulation would focus primarily on protecting consumers rather than businesses.

Last month, the South African Reserve Bank said that it is also looking into a central bank digital currency (CBDC) as an electronic legal tender.

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