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South Africa to Start Work on Stablecoin Regime, Will Start by Considering Use Cases
The Intergovernmental Fintech Working Group is also considering the effect of tokenization on domestic markets.
Updated Mar 8, 2024, 9:57 p.m. Published Feb 22, 2024, 10:37 a.m.
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- South Africa's Intergovernmental Fintech Working Group will look into the use cases of stablecoins as well as their regulatory implications.
- The group is also exploring the effect of tokenization on markets and will publish a discussion paper by December on tokenization policy.
South Africa's Intergovernmental Fintech Working Group will conduct analytical work on use cases for stablecoins and consider an appropriate policy and regulatory response during the course of this year.
The group is also considering the impact of tokenization on domestic markets. Tokenization is the representation of real-world assets (RWA) like securities on a blockchain. The group plans to publish a discussion paper outlining the regulatory implications of tokenization and blockchain-based financial market infrastructure by December.
STORY CONTINUES BELOW
Alongside many countries, South Africa has been ironing out its approach to crypto. Last year, the Financial Sector Conduct Authority (FSCA) and the Financial Intelligence Centre (FIC) declared crypto to be a financial product and started registering crypto asset service providers. This year, the country will add stablecoins as a particular type of crypto, the Treasury department's budget paper said on Wednesday. Stablecoins are digital assets whose value is tied to assets like the U.S. dollar.
A presidential election has been set for May 29 and the ruling party's majority may be at risk, though a change in government seems unlikely to alter the policy approach to crypto.
Read more: South Africa’s Crypto Firms Will Soon Need to Apply for Registration or Face a Heavy Fine
Sandali Handagama contributed to reporting.
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