SARB to Bring Cryptoassets into Regulatory Purview
The SARB Intergovernmental Fintech Working Group (IFWG), through the Crypto Assets Regulatory Working Group (CAR WG), published a position paper on cryptoassets. The paper confirms that cryptoassets will be brought into the South African regulatory purview in a phased and structured manner. The paper sets out principles for regulating the cryptoasset service provides and offers 25 recommendations on how to bring cryptoassets into the South African regulatory remit. The recommendations are focused on three areas: anti-money laundering and combating the financing of terrorism (AML/CFT), cross-border financial flows, and application of financial sector laws. Also published was a set of the frequently asked questions (FAQs) on cryptoassets and the associated issues.
The intention is not to regulate the actual cryptoassets and associated products per se, but rather the entities that provide services in relation to such products. Therefore, the South African regulators intend to regulate cryptoassets by regulating the cryptoasset service providers, or CASPs. The CAR WG position paper on cryptoassets provides a roadmap for putting in place a framework for regulating cryptoassets, through the regulation of CASPs, in South Africa. It also serves to initiate the process for the individual financial sector regulators to implement the recommendations contained herein. There is, however, a need to continually refine, amend, and make additions to the position paper given the evolutionary nature of the subject matter. The IFWG articulates the following six high-level principles that will continue to guide the national approach to regulating cryptoassets in South Africa—
- Principle 1: cryptoassets must be regulated appropriately.
- Principle 2: An activities-based perspective must be maintained and the principle of "same activity, same risk, same regulations" must continue to apply and inform the regulatory approach.
- Principle 3: Proportionate regulations that are commensurate with the risks posed must apply (that is. a risked-based approach to cryptoasset regulation must apply).
- Principle 4: A truly collaborative and joint approach to cryptoasset regulation by the Working Group must be maintained.
- Principle 5: The dynamic development of the crypto market must continue to be proactively monitored, including maintaining knowledge on emerging international best practices (through standard-setting bodies).
- Principle 6: Digital literacy and digital financial literacy levels must be increased among consumers and potential consumers of cryptoassets.
Additionally, the CAR WG explicitly identified two priorities. One priority is to implement a monitoring program for cryptoassets while the other priority is to limit the exposure of prudentially regulated financial institutions and financial market infrastructures to cryptoassets, as the risk could over time spill over and create financial stability risks. The Group clarifies that the work on prudential regulation is ongoing at the BCBS level and South Africa will take its lead from BCBS when prescribing limits and determining the most appropriate regulatory treatment of prudentially regulated financial institutions’ exposures to cryptoassets.
Related Links
Keywords: Middle East and Africa, South Africa, Banking, AML/CFT, Cyber Risk, Basel, Regulatory Capital, Financial Stability, Crypto Assets, Crypto-Asset Regulation, SARB
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Trevor Howes
IFRS 17 technical advisor; AXIS actuarial modeling system expert; extensive experience in life insurance and life reinsurance, with focus on modeling, valuation, and financial reporting
Previous Article
ISDA Consults on Implementation of Fallbacks for Certain Swap RatesRelated Articles
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.