The Financial Conduct Authority of South Africa (FSCA) will require local exchanges to obtain licenses before the end of the year.
As reported by Bloomberg, the application process started a few weeks ago and will last until November 30. The FSCA has already received around 20 applications from local cryptocurrency companies.
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Unathi Kamlana, FSCA commissioner, has stated:
"There is potentially serious harm to financial customers when using crypto products, and therefore it makes sense for us to introduce the regulatory framework."
If exchanges continue to operate without proper documentation after the deadline, they face fines or closure.
South Africa will be the first country on the continent to force digital asset exchanges to obtain licenses. According to Kamlan, time will prove the effectiveness of the measures taken.