The Financial Sector Conduct Authority of South Africa has greenlit 59 applications for licensure from cryptocurrency platforms, as reported by Reuters. These platforms will operate under current regulations.

Regulatory Milestone and Licensing Process

According to Reuters, the FSCA currently holds 262 licensing applications from different crypto exchanges in the pipeline out of 355 applicants.

Felicity Mabaso, an executive at FSCA, disclosed this information, noting that the 59 approvals were granted on March 12. These cryptocurrency companies submitted their applications by the November 30, 2023 deadline and will fall under the purview of the Financial Advisory and Intermediary Services Act (FAIS).

The FAIS Act will introduce enhanced customer protections and grant regulators the authority to enforce regulations. It also empowers the South African Reserve Bank (SARB) Financial Surveillance Department to oversee supervision.

Landmark for Cryptocurrency Regulation in Africa

South Africa emerges as the inaugural African nation to license cryptocurrency exchanges. During the regulatory process's inception in 2021, discussions initially involved creating a distinct regulatory framework for crypto.

According to Coin Telegraph, these deliberations persisted into 2022, with the regulatory framework expected to be finalized within that year. However, the SARB later announced that cryptocurrency would be categorized as a financial asset rather than a currency, with regulations slated for release in 2023. Ultimately, the FSCA classified it as a financial product.

In July, the FSCA commissioner revealed that 20 applications had been submitted before the November deadline. Crypto exchanges without a license that operate post-deadline would face enforcement actions such as fines and closure. By December, the FSCA had received 128 applications, with 72 scheduled for consideration between December and March 14.

Based on Finance Magnates, the FSCA's move to strengthen regulations is motivated by previous investigations, including the inquiry into Mirror Trading International. This is a crypto trading network that operates in South Africa.

In the past, the US Commodities and Futures Trading Commission filed a lawsuit against MTI for its participation in what was described as "the largest fraudulent scheme involving Bitcoin."

In a significant development, the South African National Treasury announced in its annual budget review in February that it would enact a policy change to encompass stablecoins within its definition of crypto assets.

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