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South Africa sets regulatory milestone with first cryptocurrency trading licenses

Thursday, 14 March 2024 16:45
South Africa sets regulatory milestone with first cryptocurrency trading licenses

(Ecofin Agency) - South Africa is about to make a significant leap in cryptocurrency regulation, marking a first not only for the country but for the entire African continent. According to Bloomberg, citing Unathi Kamlana, head of the country's Financial Sector Conduct Authority, about sixty cryptocurrency trading licenses are expected to be issued by the end of March 2024.

This development comes at a time when Bitcoin, the leading digital currency, is experiencing record values. It represents a significant shift for the African continent, where users of digital currencies have so far had to rely on international platforms for their transactions. South Africa's move aims to incorporate crypto assets into the national financial regulatory framework, making obtaining these licenses mandatory for operating platforms.

The demand for these licenses underscores the growing interest in the sector, with over 300 service providers applying for accreditation in South Africa alone. Despite Africa accounting for only 2.5% of global cryptocurrency transactions, the continent recorded $117 billion in transactions from June 2022 to June 2023. This surge is attributed to the depreciation of currencies in key African economies and a renewed interest in Bitcoin, which remains high in value despite losing nearly a third of its price since November 2021. This resurgence is partly due to major players like BlackRock entering the market, the world's largest asset management firm.

South Africa's steps towards crypto regulation mirror trends in financially linked markets like the US and the UK. Meanwhile, other African countries show more modest advancements. The Central African Republic, despite adopting Bitcoin as legal tender, has seen little in the way of new developments. Nigeria's Securities and Exchange Commission has issued new regulations for digital assets, seeking a middle ground between outright bans and unregulated use. However, challenges faced by major trading platform Binance indicate a step back. In Kenya, another significant cryptocurrency market in Africa, progress remains slow.



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ECOFIN AGENCY offers a selection of articles translated from AGENCE ECOFIN. Founded in 2011, Agence Ecofin is a leader in Francophone Pan-African economic news, particularly in West and Central Africa. The agency publishes daily news on nine African economic sectors: Public Management, Finance, ICT, Agribusiness, Energy, Mining, Transport & Logistics, Communication, and Training.

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