Different countries are trying to implement different controls over the cryptocurrency and blockchain market. It is clear that it is a difficult task due to the fact that strong regulations may harm a very profitable industry. South Africa is now establishing a self-regulatory agency in order to create a better framework for cryptocurrencies to spread.
South Africa’s Self-Regulatory Agency
The South African Central Bank (SARB) will be creating a special unit that will be in charge of controlling cryptocurrency and blockchain developments. At the moment, the SARB does not regulate cryptocurrencies, but is working in order to protect investors, reduce risks, and have a better regulatory framework.
Bridget King, SARB’s banking practice director, said that cryptocurrencies shouldn’t be regulated prematurely due to the fact that the regulations could have a negative impact on the industry. It is important to mark that cryptocurrencies and blockchain could change the way several enterprises work by improving their efficiency, transparency, and product quality.
Bridget King commented:
“Regulating cryptocurrencies prematurely could have the negative consequence of throttling the growth and innovation of the industry.”
Moreover, he explained that the laws would need to be usually modified because the technological developments in the environment take place very fast.
“In addition, if laws are drafted based o existing technology, which is still in its growth phase, there is a risk that the technology may have moved so much by the time the legislation is enacted, that the legislation is obsolete or requires updating almost immediately to align with the latest technology,” Mr King said.
South Africa is a very active country in the cryptocurrency market. It has a society that has been supporting cryptocurrencies and several blockchain and crypto enterprises operate in the country. In March, Johannesburg hosted the fourth consecutive blockchain conference.
The official website of the conference reads as follows:
“Blockchain technology offers advancements and innovation in various technological fields. The open-source, decentralised and distributed nature of the blockchain creates new opportunities in Africa because the technology offers people, governments, companies, and institutions an alternative to existing systems.”