In 2024, the Intergovernmental Fintech Working Group, a consortium of South African regulators that unveiled a position paper on crypto assets in 2021, is expected to “publish additions to include stablecoins as a particular type of crypto asset.” The consortium is also considering the impact of tokenisation on domestic financial markets and is expected to release a paper providing an overview of tokenisation by June 2024.
IFWG to Analyze Stablecoin Use Cases
Later this year, South Africa’s Intergovernmental Fintech Working Group (IFWG) is set to publish a document that categorizes stablecoins as a specific type of crypto asset, the latest National Treasury budget review document has revealed.
The IFWG, a body comprising South African regulators such as the Financial Sector Conduct Authority (FSCA) and the Financial Intelligence Centre (FIC), is also expected to “conduct analytical work to understand the applicable use cases of stablecoins.”
As detailed in the budget review, this new document will supplement a position paper released in 2021. In the position paper, the IFWG proposed 25 recommendations on the regulation, policy, and legal stance towards crypto assets that South Africa should adopt.
IFWG to Recommend Stablecoin Policy and Regulatory Response
As reported by Bitcoin.com News, the IFWG advised authorities to classify crypto assets as financial products. However, the body emphasized that such a classification does not equate to an endorsement of crypto assets. In November 2023, in line with the IFWG’s recommendations, the FSCA designated crypto assets as financial products.
According to the budget review, the IFWG is expected to propose an appropriate policy and regulatory response once again. The body will also ensure that its recommendations align with global standards.
In the realm of tokenization, South Africa’s budget review for 2024 indicates that the IFWG is currently examining the potential effects on the nation’s financial markets.
“The IFWG is considering the impact of tokenisation on domestic financial markets. By June
2024, a paper providing an overview of tokenisation will be published. By December 2024, a discussion paper will be published that outlines the policy and regulatory implications of
tokenisation and blockchain-based financial market infrastructure,” the National Treasury 2024 Budget Review states.
