South Africa devises a strategy to foster equality by harnessing stablecoins and blockchain technology
South African authorities have unveiled a new initiative by the treasury to promote the use of digital payments among marginalized groups. In a document released on February 21, the treasury outlined its plans to explore the potential of stablecoins and blockchain technology in improving the lives of these groups.
The treasury’s announcement signals a forthcoming policy change that will focus on the promotion of digital payments, with stablecoins being highlighted as a key aspect of this strategy. The aim is to investigate how blockchain-based tokenization can impact domestic financial markets, and a working group has been established to conduct this research. The group is expected to publish a comprehensive document outlining the policy and regulatory implications of tokenization and blockchain-based financial market infrastructure by December 2024.
This move comes after South Africa recognized crypto assets as financial products in October 2022. The country’s Financial Services Authority (FSCA) made changes to the legal framework to acknowledge the “digital representation of value” provided by crypto products. Furthermore, in July 2023, South African authorities announced that cryptocurrency exchanges would require a license to operate. Failure to comply with this requirement could result in enforcement action, including fines or closure of the non-compliant firms.
In a similar vein, earlier this year, Nigeria banned cryptocurrency exchanges such as Binance, OctaFX, and Coinbase. The government instructed telecommunications companies to block access to these websites. In response, Binance limited local users’ access to its peer-to-peer platform to assist in safeguarding the foreign exchange market and the national currency.
As South Africa continues to embrace digital payments and blockchain technology, the country’s financial regulator is also urging crypto firms to establish local offices. This move aims to ensure better oversight and regulation of the crypto industry within the nation.
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