The disruptive nature of the cryptocurrency industry poses significant challenges for regulators as they struggle to define what aspects require oversight.
According to Lesetja Kganyago, Governor of the South African Reserve Bank (SARB), this complexity has made it difficult to establish clear regulatory frameworks. Kganyago shared these insights at the 2025 World Economic Forum (WEF) annual meeting in Davos, Switzerland.
“I’d say that the ecosystem is fairly dynamic, but it’s volatile,” said Kganyago.
“It’s characterised by rapidly-moving technological innovation…so part of it is going to be a learning journey between the players and the regulators.”
Kganyago stressed the importance of clear and consistent regulations across jurisdictions, emphasizing that regulatory frameworks should apply uniformly, whether they govern crypto, banking, trade, or consumer protection.
“Governments must set rules that are clear, that are transparent and not [set] by political parties that industry could throw resources to because they do not like a particular approach of a particular politician or political party, and therefore throw resources to knock this one out or to keep this one in place.
That for me is regulatory capture.
We need a society that frames conversations about how policies, how regulations should evolve, such that regulations are clear for everyone across industries.”
He highlighted that South Africa’s regulatory approach prioritizes collaboration with the industry to co-create frameworks that are both practical and effective.
South Africa’s Financial Sector Conduct Authority (FSCA) classified crypto assets as financial products requiring regulatory oversight in 2022, making South Africa the first African country to do so.
South Africa’s
Financial Regulator, FSCA, Declares Crypto Assets as a Financial Product
A crypto asset is used as an investment vehicle… and it resembles a financial product – you invest in it, you get returns from it.” – FSCAhttps://t.co/FOAe4pMmy3
— BitKE (@BitcoinKE) October 21, 2022
The regulations came after an inter-governmental Fintech Working Group (IFWG) was established and which drew up 25 recommendations on how to bring crypto assets into the South African regulatory remit in a phased and structured approach across 3 identified areas.
“As a regulator, we do not regulate technology. We regulate activity; we are technology agnostic. It’s not for governments to decide which assets or products the consumer should be using,” added Kganyago.
The South African Regulatory Body, IFWG, Publishes a Position Paper on Crypto Assets: https://t.co/JKdctzQG7z
— BitKE (@BitcoinKE) June 11, 2021
Kganyago’s position was endorsed by Stellar Development Foundation CEO, Danelle Dixon, who was a participant at the annual meeting.
“Governor, what you said is exactly what we all wanted. We wanted rule-making and clarity; we wanted that to happen. That wasn’t happening for four years, and I think that’s the challenge. I think it wasn’t about just trying to vote people out so that we get the policies in.
It was trying to get the thing that you are articulating that happens in South Africa.”
PARTNERSHIP | British Actor, Idris Elba, Partners with Stellar Network to Explore Blockchain Solutions for West Africa
The Hollywood actor holds the belief that the potential shift from conventional banking to cryptocurrency-based financial services in West Africa could be as… pic.twitter.com/8zK03kKPV5
— BitKE (@BitcoinKE) October 19, 2023
Kganyago has also expressed his opinion regarding a South African bitcoin reserve strategy, stating that he does not see any intrinsic value in Bitcoin as opposed to gold.
According to Reuters, the crypto industry invested over $119M to advance legislation favorable to the sectorhttps://t.co/SiP2xQYmWs @SAReserveBank pic.twitter.com/wg0btW5TGO
— BitKE (@BitcoinKE) January 22, 2025
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