Impending debut of South African cryptocurrency licenses confirmed by FSCA representative
The Financial Sector Conduct Authority (FSCA) in South Africa is moving forward with its plan to issue Financial Service Provider (FSP) licenses to crypto companies. Gerhard Van Deventer, the head of divisional enforcement at the FSCA, announced during an interview on the Moneyweb Crypto podcast that as of December 12, 2023, the regulator planned to address 36 applications, with the remaining applications to be reviewed in two phases: February 13, 2024, and March 12, 2024.
This decision is a significant development for the cryptocurrency industry in South Africa, aiming to provide a legal framework for the use of cryptocurrencies and safeguard users from scams as the number of South Africans using bitcoin (BTC) and other cryptocurrencies approaches about 10% of the population. The FSCA's issuance of FSP licenses to crypto companies is a response to concerns about the need for regulation and protection for users.
In the interview, Deventer stated that crypto companies that did not submit an application before the deadline must cease operations. As of the mentioned date, the FSCA had received and reviewed 128 license applications, with 19 withdrawals. Some applicants dropped off because crypto was not their main business and they were not prepared to take on the latest regulatory burden. According to Deventer, there were approximately 20 application withdrawals, with reasons including lack of necessary personnel and the cost of regulation.
Entities that applied for a license may continue operating under certain conditions until a decision is made. The FSCA requires all financial service providers, including those dealing with crypto assets, to be licensed. Institutions offering crypto services must conduct risk assessments accounting for the high-risk nature of crypto exposure. The regulator has also issued warnings about scams impersonating licensed firms, highlighting the importance of verifying FSP licenses and registrations on the FSCA’s website.
The partnership between Triple-A and Paycorp aims to provide a convenient way for South African crypto holders to withdraw their cryptocurrencies as cash from over 3,000 ATMs in the country. This partnership bridges the gap between digital and traditional currencies by integrating Paycorp's Cash Express ATMs with the CryptoExpress app, supporting digital wallets and voucher transactions.
However, as of March 12, 2024, there is no specific publicly available information in the provided search results about the current status of FSP license applications specifically for crypto companies in South Africa. To obtain the exact and current status of FSP license applications for crypto companies as of March 12, 2024, one would need to consult directly with the FSCA or access their official communications or database from that period.
It is worth noting that Deventer's claim about the number of applications under review by the FSCA (145) differs from a previous statement by the FSCA, which stated that it had received 128 crypto license applications as of the deadline on November 30, 2023. This discrepancy may be due to updates or corrections in the FSCA's records, but further information is needed to confirm this.
In conclusion, the FSCA's decision to issue FSP licenses to crypto companies is a significant step towards regulating and protecting the use of cryptocurrencies in South Africa. As the review process continues, it is essential to stay informed about the latest developments and updates from the FSCA to ensure a safe and secure environment for crypto users in the country.
- The FSCA's issuance of FSP licenses to crypto companies signals a move towards providing a legal framework for the use of digital assets and crypto in South Africa.
- As of the mentioned date, the FSCA had received and reviewed 128 license applications, with 19 withdrawals, highlighting the need for proper preparation and resources for the latest regulatory burden.
- Entities that applied for a license may continue operating under certain conditions until a decision is made, underscoring the importance of compliance with FSCA regulations for crypto companies.
- The partnership between Triple-A and Paycorp offers a cash withdrawal solution for South African crypto holders, bridging the gap between digital and traditional currencies.
- The discrepancy between Deventer's statement and a previous FSCA statement about the number of crypto license applications may be due to updates or corrections in the FSCA's records, emphasizing the importance of accurate information for understanding the cryptocurrency industry in South Africa.
