Key Takeaways
- The South Africa Finance Minister moved for the stoppage of pension funds investing in Cryptocurrencies.
- The Minister seeks to expand the digital asset definition to encompass derivatives like NFTs and any digital currency that is not from the Central bank.
- He explained that the amendment is important to ensure the protection of consumers by restricting the extent that the fund can invest in digital assets.
According to Business Insider SA, Godongwana's deadline for comments on the draft plan suggests the Minister wants it implemented before the year ends.
For the country's pension funds, the digital asset was a murky area where a 2.5% investment was authorized. Business Insider reports that if the Minister's proposal is adopted, this ambiguous provision of the rule allowing the pension fund to participate in cryptocurrency would be erased.
Report According to new government laws, a fund cannot directly or indirectly engage in digital assets.
Derivatives like NFTs and any digital currency that isn't issued by the Central bank are also included in the draft suggestion.
The Minister's decision to ban pension fund investments in digital assets comes as legislators struggle to figure out the best way to regulate the blockchain industry. For example, the Country's intergovernmental Fintech Working Group (IFWG) has released a new position paper demanding crypto society legislation.
Related: Crypto arbitrage traders receive termination notices from top South African bank
In July, Bitcoin.com reported that the South African Revenue Services has modified its online tax filing system to target crypto arbitrage traders.
Like other authorities in the nation, the Financial Ministry bases its proposal on consumer protection. That the proposed amendment will assist safeguard by limiting pension fund investments in specified assets or asset classes.
What do you think of the South African Finance Minister's suggested change?
