The move to classify cryptocurrencies as financial assets and not currency has been talked about for some time by the South African Reserve Bank (SARB). The cryptocurrency space has been left to develop organically in South Africa, with no clear-cut regulations issued by the SARB until recently. The country has become a leader in cryptocurrency adoption, with more than 6 million South Africans estimated to own some cryptocurrency. Now that the SARB has finally taken a stance toward the ecosystem, exchanges, traders, and investors can begin to take stock of the ramifications.
Complying with new regulatory parameters would not require a step-change in its processes aside from country-specific nuances. The SARB continues to explore the possible use of a central bank digital currency (CBDC) through its Project Khokha initiative. Several prominent players from the traditional banking sector in South Africa have been actively involved in testing a proof-of-concept for the proposed CBDC settlement system.