The FSCA will unveil a regulatory framework for cryptocurrencies early next year to help protect consumers, according to a report by US-based financial news service Bloomberg.
The rules will establish how trading in coins such as Ethereum, XRP and Litecoin should be conducted, FSCA Commissioner Unathi Kamlana said in an interview on 11 December.
Other issues to be examined are how the currencies interact with traditional financial products, the risks they pertain to bank balance sheets, and whether they threaten fiscal stability.
“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 legitimise them.”
Although Kamlana said cryptocurrencies yet don’t pose a systemic risk to the stability of the financial services sector, the FSCA sees them as an asset rather than a currency. The regulator is monitoring the South African Reserve Bank’s plans to develop its own stable coin, seeing that as the most responsible approach to innovation, Kamlana said.
“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,” he said. “The best outcome in terms of stable coins is what comes out of central bank innovation, given their reliability and stability.”