South Africa’s top financial watchdog will establish digital currency legislation early next year. According to the regulator, scammers are allegedly taking advantage of weak investors and fleeing with millions of dollars because the investors have little redress.

Along with Kenya, Nigeria, and Ghana, South Africa has been one of the continent’s largest digital currency markets. According to a study conducted by social media management company Hootsuite a few years ago, South Africa scored first in the world for the number of Internet users who hold digital currencies.

However, the sector remains mostly unregulated, allowing multimillion-dollar scams like Mirror Trading International and Africrypt to flourish.

Bloomberg claims that this is set to change. The Financial Sector Conduct Authority (FSCA) commissioner, Unathi Kamlana, told the media outlet that the agency has been working on legislation for the sector, which it plans to release in early 2022.

The FSCA has collaborated on the regulations with its counterparts in other countries and local agencies such as the Financial Surveillance Board.

“What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky. We must be very careful to not just legitimize them,”

Kamlana told Bloomberg

The regulator is looking into how digital currencies interact with traditional financial products, in addition to putting procedures in place to protect investors from possible scammers or complex products that put their money in danger. It’s also looking into whether they threaten the country’s budgetary stability, which is Africa’s second-largest.

Kamlana went on to say that the FSCA, like many other agencies throughout the world, views Bitcoin as an asset rather than a currency. The BTC party, pushing it as digital gold after limiting the protocol to 7 transactions per second, has fueled this wrong attitude. On the other hand, Satoshi Nakamoto was emphatic that Bitcoin is electronic peer-to-peer cash, a vision that Bitcoin SV is now realizing.

The FSCA is also keeping a close eye on the Reserve Bank’s digital rand initiatives, according to the commissioner.

“I think that if I were to give advice to retail investors, I would say wait to see what comes out of the process of the work of the central bank. The best outcome in terms of stable coins is what comes out of central bank innovation, given their reliability and stability,” he concluded.

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