In an exciting development for South Africa’s cryptocurrency market, the nation’s top financial regulator, the Financial Sector Conduct Authority (FSCA), is expected to license 36 crypto service asset providers (CASPs) at a key meeting in December. These discussions follow the FSCA’s review of 128 applications from CASPs.
These facts were reported by local news source, My Broadband, on November 30. The FSCA’s Licensing Executive Committee is set to assess the first 36 potential licenses during their December 12 gathering, with another 22 applications being considered in February, and the final 14 under review in March. The regulator has remained mum on the fate of the remaining applications.
A six-pronged method combines assessments of customer onboarding, data protection, cyber risk, conflict of interest, complaint handling, and credit counterparty risk management for evaluation of applications.
Interestingly, on November 30, FSCA shared its research into “Crypto Assets Markets,” revealing that 60% of South Africa’s traded crypto consists of “unbacked crypto assets.” These are essentially any form of cryptocurrency beyond stablecoins and nonfungible tokens (NFTs), and certain centrally issued coins.
According to the research, almost half of South African crypto asset providers generate an annual revenue of 1 to 50 million rand ($53,000 to $2.7 million). And a small segment of 8% of the CASPs earn more than 100 million rand. The record monthly transaction value was noticed in November 2022, standing at over 8 billion rand.
Since July 2023, the FSCA has emphasized that every South African CASP must be licensed by the end of the year. Any offenders operating after the deadline may face enforcement action, including penalties or shutdown.