2 months ago
Cryptocurrency News

Bitcoin Falls as South Africa Mulls Tighter Regulations

Investing.com - Bitcoin and other major digital coin prices dropped on Wednesday in Asia, after a mild recovery the day

Investing.com - Bitcoin and other major digital coin prices dropped on Wednesday in Asia, after a mild recovery the day before. News on crypto regulations continued to be in focus, with South Africa’s central bank calling for tighter oversight as digital assets could be linked to criminal activity.

Bitcoin, the world’s largest digital coin, lost 1.81% to $3,577.4 by 12:58 AM ET (06:58 GMT).

Ethereum slid 6.59% to $119.4, XRP was down 1.86% to $0.32346, and Litecoin dropped 3.66% to $30.767.

On January 15, the South African Reserved Bank proposed tougher regulations, instead of a ban, on cryptocurrencies. The bank published a consultation paper to solicit opinion until February 15.

“In order to achieve anti-money laundering/combating the financing of terrorism (AML/CFT) requirements, more specific requirements will be necessary in line with the recent amendments to the Financial Action Task Force (FATF) Recommendations,” the paper read, adding that “regulatory action should not be delayed.”

The move came as FATF, the global money-laundering regulator, is expected to release rules on the oversight of cryptocurrencies by June 2019.

In South Africa, the proposed rules require all cryptocurrency asset trading platforms, custodial service providers, and payment service providers to register with the authorities and comply with the AML/CFT provisions of the Financial Intelligence Centre Act.

Cryptocurrency service providers should also monitor user transactions, especially large transactions that could be related to terrorism.

With that said, South Africa currently has no plans to ban the buying, selling or holding of crypto assets, or crypto assets for payments.

Although regulators worldwide have expressed concern about the potential use of cryptocurrencies for criminal activities, authorities in the Marshall Islands seem to be undeterred.

The island nation is developing its national cryptocurrency known as Sovereign (SOV), which could be launched this year. The team behind the digital coin said last week that it had made “significant progress in finding partners, investors, and developers” to realise the project.

Major financial bodies such as the International Monetary Fund and the U.S. Treasury Department have criticised the project, warning of “potential costs arising from economic, reputational, AML/CFT, and governance risks.”