Home Business S. African Bank Allows FIs to Service Crypto Accounts

S. African Bank Allows FIs to Service Crypto Accounts

S. African Bank Allows FIs to Service Crypto Accounts

The South African Reserve Bank (SARB) is moving forward with a recommendation to let banks deal with firms managing crypto assets.

New guidelines published by the bank indicates that banks can now act as a “conduit” for funds from crypto asset service providers and can transact with customers who want to buy or receive payments in this way.

This comes as some banks in the region previously severed ties with crypto companies due to the risks and greater possibility of crypto being used to launder money or violate sanctions. The SARB found this to be an overcorrection, writing that banks can reasonably look at a crypto company’s risk and individually decide to do business with them, rather than ban them all.

The SARB said it believes the “wholesale termination” of relationships with these crypto companies poses a threat to financial integrity.

“Risk assessment does not necessarily imply that institutions should seek to avoid risk altogether,” the SARB said.

The regulation of cryptocurrency companies has been a hot topic around the world, with the issue of risk and volatility informing everything that happens.

Read more: New Fed Guidelines Help Crypto Firms Access Central Banking System

PYMNTS wrote recently that the Federal Reserve issued new guidelines for institutions holding crypto in the United States to potentially obtain “primary accounts” with the central bank.

The press release from the central bank’s board of governors did not refer specifically to crypto, but it did say that any new requests for access to Fed accounts and payment services would now be reviewed with a set of factors.” transparent and risk-based”.

There has been a lot of debate over the regulation of digital assets, with Fed Vice Chairman Lael Brainard saying earlier in the year that there should be more such regulations before the industry becomes large enough to incur more risk.

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