Are Crypto regulations coming to SA in 2022?

Should crypto be regulated?

Whether to regulate the crypto industry or not is an ongoing debate, but most informed stakeholders believe we need a regulated environment to further grow the industry and provide protection and recourse to consumers.

From a growth perspective, a regulated crypto industry could increase overall adoption and give birth to a new sub-sector of publicly traded funds holding crypto as their underlying assets – as we have seen internationally with the hype around exchange traded funds.

That said, it is paramount that these regulations do not stifle innovation.

Who will be left standing?

Since the introduction of Bitcoin in 2009, the biggest reason for cryptocurrency exchange failure internationally has been as a result of security hacks. Not far behind however, has been their inability to adhere to the applicable laws and regulations.

When regulations kick in locally, and the industry is increasingly actively monitored from a compliance perspective by the FSCA and other watchdogs, some of these VASPs will likely drop out of the race due to compliance struggles – as we have seen internationally. This illustrates the importance for stakeholders to understand their preferred VASPs stance on regulations and in doing so mitigate their risk of being affected.

To remain in the game it is imperative that VASPs proactively manage ongoing regulatory risk as opposed trying to play catch up and eventually falling behind once regulations are imposed. What remains to be seen is whether it will only be the larger VASPs left standing or if there is scope for smaller players in a regulated crypto industry.

For more info visit: https://www.moneyweb.co.za/moneyweb-crypto/will-we-finally-see-crypto-regulation-in-sa-in-2022/