New Financial Services in SA
This Newsletter has reported on the creation of the new Payments Industry Body (PIB) over the last few months. Pushed by SARB, the plan is to have PIB up and running at the start of 2022. PIB will replace PASA and will be inclusive. The discussions on how to ensure that all the players in the payment ecosystem will be included and how to water down the power of the legacy banks have been extremely complex. EFSA is included in the debate and will represent the ecommerce sector in the future at the PIB. Our Chair, Karen Nadasen, sits in her personal capacity on the Design Board.
A point of discussion is where the new body will be recognised in law, with the COFI Bill being the most popular solution; and how will the new body be recognised? PASA has been recognised because it has the power to license certain financial activities. The new PIB is not likely to be given those powers, however, SARB recognises that it will need to be legally recognised if PIB is to enjoy influence.
Meanwhile, the regulators are planning to unveil a regulatory framework covering cryptocurrencies early next year to help protect vulnerable members of society from these highly risky assets. Other issues to be examined include how the currencies interact with traditional financial products, the risks they pertain to bank balance sheets, and whether they threaten fiscal stability. The introduction of regulations follows 2 major crypto scams that originated in SA, both of which led to the disappearance of billions of dollars in investments. Digital currencies have moved from the periphery of the finance world to the mainstream over the past few years, leading to deeper scrutiny worldwide to prevent providers from operating unfettered.
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