Over 90 Financial Services Providers in South Africa Apply For License to Offer Crypto-Related Services
In a significant surge of crypto adoption in South Africa, a recent report has revealed that over 90 financial services providers have applied for licenses with the Financial Sector Conduct Authority (FSCA) to offer crypto-related services.
This is coming after the FSCA in October 2022, published the declaration of Crypto Assets as a financial product under the FAIS Act.
The FSCA, in its policy document issued on 19 October 2022, set out the effect, scope, licensing, and transitional provisions of the Notice. In terms of the Policy Document, crypto service providers in South Africa were mandated to apply for a license between 1 June 2023 and 20 November 2023 to legally operate within South Africa or risk criminal conviction and a R10 million fine.
This saw many financial service providers rush to apply for a licence with the Financial Sector Conduct Authority (FSCA) to offer crypto-related services.
Meanwhile, only very few of the license applications submitted to the Financial Services Conduct Authority (FSCA) were not licensed financial services providers. Of those who applied for licenses, 73 are accountable institutions registered with the Financial Intelligence Centre.
The FSCA stated that the regulation and licensing of crypto assets is intended to protect consumers from crypto scams and empower the authorities to take action against crypto scammers.
Even though the FSCA supports the Notice, it deliberately referred to crypto assets as opposed to cryptocurrencies, as the FSCA does not believe that cryptocurrency meets the criteria for currency.
Notably, there is an uptick in interest from South Africa’s large banks, as they are gearing up to offer their customers crypto products and services. Also, businesses in SA, are experimenting with crypto beyond its investment proposition and are using crypto in their operations.
For instance, Stitch, a South African payments infrastructure company, launched a new payment method called “Pay with Crypto,” which allows customers to use cryptocurrency directly when purchasing goods and services in South African rand.
Interest in cryptocurrency has continued to skyrocket in the country, over the past few years, as businesses are recognizing the potential benefits that cryptocurrencies and blockchain technology can bring.
