South African Reserve Bank Encourages Crypto-Friendly Behavior

Banking authority says avoiding risk by cutting off customers involved in crypto could pose "threat" to integrity financial.

The Reserve Bank of South Africa's Prudential Authority has issued guidelines to its subsidiaries in an effort to prevent illicit activity, encouraging banks not to cut any ties to cryptocurrency.

This suggested that such an act might carry greater long-term risk.

The official notice was signed by Fundi Tshazibana, CEO of the Prudential Authority. In the past, some South African banks had severed their ties with Crypto-Asset Service Providers (CASPs) – as they are called in the document – ​​due to unclear regulations or a high risk factor. /p>

However, the advisory emphasizes that risk assessment does not mean abandoning crypto altogether:

“Risk assessment does not necessarily imply that institutions should seek to avoid risk altogether (also known as risk reduction), for example, by terminating customer relationships wholesale, which may include CASP."

He goes on to say that such a move could even pose a "threat" to general financial integrity, as it could limit opportunities to address issues such as money laundering.

At the end of July, the Reserve Bank published an assessment of the risks within the local banking sector. According to the report, cryptocurrencies and virtual assets were among the top 10 threats identified by major local banks.

Related: European Central Bank Responds to Guidelines on Licensing Digital Assets

Before the report, the...