FSCA Licenses 63 New Crypto Providers, Boosting Oversight in South Africa

• FSCA licenses 63 new crypto service providers, boosting legal operations to 138 in South Africa.
• Strict ‘fit and proper’ criteria reject 5 applications, with 80 withdrawals, emphasizing regulatory rigor.
• Cryptocurrencies are not legal tender in South Africa; FSCA ensures compliance and market stability.

The Financial Sector Conduct Authority (FSCA) in South Africa has significantly enhanced its cryptocurrency regulation by licensing 63 new crypto asset service providers (CASPs). This move increases the number of legally operating CASPs in the country to 138, highlighting the authority’s dedication to creating a secure and regulated market.

On July 2, the FSCA revealed it had processed 383 applications from various entities seeking to operate in the crypto space. From these, five applications were rejected due to not meeting the stringent ‘fit and proper’ criteria required by local financial services laws. Additionally, 80 applicants withdrew their submissions following detailed discussions with the FSCA, demonstrating proactive engagement between the regulator and potential service providers.

The FSCA offered entities with rejected applications the opportunity to reapply once they have adjusted their operations to meet regulatory standards. Until then, these entities are prohibited from performing any CASP-related activities under the FAIS Act. This strict approach ensures that only fully compliant entities can operate, enhancing the overall integrity of the financial market.

Moreover, the FSCA closely monitors unauthorized CASP activities. Any institution or individual found in violation faces severe regulatory action, deterring non-compliant behaviors and ensuring alignment with national financial regulations. This rigorous enforcement safeguards consumer interests and maintains market stability.

The FSCA also clarified the status of cryptocurrencies in South Africa. Despite the increase in regulatory approvals, crypto assets are not recognized as legal tender or conventional ‘cryptocurrency’ by the country’s central bank. The authority emphasized that these assets are viewed differently from traditional currencies, correcting any misinterpretations in media reports regarding their status.

Through these measures, the FSCA positions South Africa as a leader in regulating digital currencies. By fostering a compliant and secure environment, the authority protects consumers and encourages innovation and growth within the sector. This balanced approach promises to integrate cryptocurrencies further into South Africa’s broader financial landscape.