Question NW1984 to the Minister of Finance

Reply:

The position on virtual or crypto-currencies is that they are currently not regulated (they operate without the authority of central banks). An alert to this effect was issued jointly by the National Treasury, the South African Reserve Bank (SARB), the Financial Services Board (FSB), the South African Revenue Service (SARS) and the Financial Intelligence Centre (FIC) on 18 September 2014 (attached Annexure A - available on www.treasury.gov.za), which cautioned members of the public to be aware of the risks associated with the use of virtual currencies for either transactions or investment. As noted, the relevant authorities continue to monitor and assess the use of virtual currencies and consult with private sector stakeholders in this regard. Further guidance or regulations may be issued, should the need arise.

While the above position still applies, the National Treasury together with the SARB, FIC, and FSB have also established an Intergovernmental Fintech Working Group in December 2016, to develop an approach and potential revised policy stance towards fintech, including crypto-currencies, and to deal with fast-emerging fintech matters in the financial sector, like crowdfunding, robo-advice, machine learning and alternate payment platforms. A balanced approach is being taken, which is supportive of the objectives of enhanced innovation, competition and financial inclusion in the financial sector, while also reviewing risks related to financial customer protection, money laundering and financial stability.