South African Pension Funds to Be Banned From Crypto Investment, Draft Rules Indicate

South African Pension Funds to Be Banned From Crypto Investment, Draft Rules Indicate

 

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South African pension funds are to be banned from investing in cryptocurrencies under new draft rules.

  • “A fund may not invest in crypto-assets directly or indirectly,” the proposed rule change states in the Government Gazette published Friday.
  • This would replace existing legislation that allowed portfolio managers to invest as much as 2.5% of funds in crypto as part of an umbrella “other assets” category.
  • The South African government defines a crypto asset as any digital representation of value “not issued by a central bank, but is capable of being traded, transferred or stored electronically by natural and legal persons for the purpose of payment, investment and other forms of utility; applies cryptographic techniques and uses distributed ledger technology.”
  • Such a broad definition points toward the ban extending to non-fungible tokens (NFTs) and similar tradeable digital assets.
  • Financial regulators in South Africa have in recent months indicated there would an acceleration in crypto regulation in response to retail investors being scammed by fraudulent investment firms.

Read more: South Africa’s Financial Watchdog to Bring Crypto Exchanges Into Regulatory Oversight



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