South Africa might be taking a different approach to crypto regulations. Rather than implementing government-based regulations on cryptocurrencies, a self-regulatory approach may be adopted.
Why self-regulate crypto? According to Bridget King, the Finance and Banking Practice Director at a South African law firm, prematurely regulating cryptocurrencies could stem their growth and the overall innovation of the industry.
King told the Business Report that:
“If laws are drafted based on existing technology, which is still in its growth phase, there is a risk that the technology may have moved so much by the time the legislation is enacted, that this legislation is obsolete or requires updating almost immediately.”
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Bitcoin.com reports that representatives from the private sector in South Africa have proposed forming a Self-regulatory Organization (SRO). The argument behind this is that cryptocurrencies are not properly suited to traditional centralized supervision or regulations. The SRO would be able to better implement industry standards and make more informed decisions about crypto than any government body could.
Bridget King also warned, however, that a self-regulatory approach to crypto would have to be balanced against not delaying a regulatory framework by too much. Is the suggestion, therefore, to self-regulate for right now and then implement government regulations later, once crypto has completed innovating? But, will crypto ever be done innovating? So, where should the line be drawn?
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Bitcoin [BTC] is becoming increasingly popular in South Africa. South Africa allows cryptos to be used as payment in several different instances, so it’s no wonder why regulatory discussions are beginning to pop up in the country.
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What do you think about the potential approach of South Africa? Is self-regulation of crypto the way to go in the future?
Featured image: Kurious