South Africa’s Election Won’t Interfere With Crypto Policy: Industry Watchers

South Africa's upcoming election isn't expected to derail the country's agenda for digital assets, several members of the crypto community told CoinDesk.

The Financial Sector Conduct Authority (FSCA) recently set up a licensing regime for crypto, making it one of the first African nations to do so. The regulator is poised to hand out 60 licenses to crypto firms under the regime in the coming weeks and has so far awarded licenses to crypto firms Luno, Zignaly and VALR. The country brought crypto providers into the scope of its Financial Advisory and Intermediary Services Act in 2022 so it could regulate digital assets as financial products.

"This signals a forward-thinking approach to regulating the crypto space, aligning with global trends and acknowledging the growing significance of blockchain technology in modern finance," Maurice Crespi, a partner at South Africa-based law firm Schindlers Attorneys, said in a statement.

The country is set to choose its president on May 29. The current ruling party the African National Congress (ANC) has dominated for 30 years, but now its majority is being challenged. As a result, the ANC may have to form a coalition that could include its opposition party, the Democratic Alliance, and the far-left Economic Freedom Fighters party.

However, Mpumelelo Ndamane, CEO of South Africa-based crypto wallet provider Nuud Money believes that politics won't interfere with the country's crypto policies.

"We've been pretty stable over the past 30 years when it comes to ensuring the [South African Reserve Bank] and FSCA are independent of politics," Ndamane said in a statement. "It won’t affect the crypto policy."

South Africa's National Treasury recently indicated that the nation's Intergovernmental Fintech Working Group is going to look at use cases for stablecoins as well as consider a policy and regulatory response this year.

The group will also be looking at the impact tokenization has on domestic markets. It plans to publish a discussion paper that outlines the regulatory implications of tokenization and blockchain-based financial market infrastructure by December. Tokenization is the representation of real-world assets on a blockchain.

"I think that in South Africa, in particular, the work that has been done on digital assets has been to address problems that in many respects are apolitical, and the approach they've taken has been apolitical as well," John McCarthy, general counsel for global regulatory affairs at Fireblocks, said in an interview with CoinDesk. "It's also been through an intergovernmental working body, much of which is inherently apolitical."

Read more: South Africa to Start Work on Stablecoin Regime, Will Start by Considering Use Cases