The Financial Sector Conduct Authority (FSCA) of South Africa is planning to unveil a regulatory framework for cryptocurrencies next year to protect the users.

The framework will be designed in coordination with peers like the financial surveillance board and the prudential authority.

These new rules will establish how trading in crypto assets should be conducted, said FSCA Commissioner Unathi Kamlana in an interview this week. Other issues to be examined include whether crypto threatens fiscal stability, the risks they pose to bank balance sheets, and how they interact with traditional financial products.

“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,” Kamlana said. “We must be very careful to not just legitimize them.”

According to the Commissioner, crypto does not pose a systemic risk to the stability of the financial sector yet. The FCA, he said, sees crypto as an asset rather than a currency.

“I think that if I were to give advice to retail investors, I would say wait to see what comes out of the process of the work of the central bank,” said South Africa’s financial regulator chief.

The regulator is also monitoring the South African Reserve Bank’s plans to develop its own cryptocurrency, a stablecoin, which is seen as the most responsible approach to innovation.

“The best outcome in terms of stablecoins is what comes out of central bank innovation, given their reliability and stability,” Kamlana said.

Much like South Africa, the authorities like the European Central Bank are also exploring digital versions of their own currencies.

However, ECB Executive Board member Fabio Panetta doesn't see any benefit of crypto. According to him, it is not benefiting the society and wider economy in any way as they are not used in retail or wholesale payments or to fund consumption or investment and play no part in combating climate change either.

“There is no sign that crypto-assets have performed, or are performing, socially or economically useful functions,” the ECB official said at a lecture in Rome.

Panetta criticized crypto for damaging the environment and their role in criminal financing and tax evasion.

“On the whole, it is difficult to see a justification for the existence of crypto-assets in the financial landscape,” he said.

Bitcoin price in Telegram @btc_price_every_hour

385 +