South Africa is reportedly pioneering the way in the continent by necessitating licensing for digital asset exchanges.

South Africa’s financial overseer has declared that by the year’s end, all crypto exchanges in the nation must secure licenses, as per a report by Bloomberg.

Financial Sector Conduct Authority (FSCA) commissioner Unathi Kamlana revealed that since the commencement of the licensing initiative, approximately 20 applications have been received, with the anticipation of more before the November 30 deadline.

Kamlana added that in the event of crypto exchanges operating beyond the deadline without a license, the regulator will resort to “enforcement action.” This could include penalties or the shutting down of non-compliant businesses.

Kamlana emphasized that bringing crypto products under a regulatory purview is a prudent move, considering the potential risk to financial customers. He expressed the necessity for a period of evaluation to determine the efficacy of these measures and assured of continued collaboration with the industry for the refinement and implementation of needed changes.

With this move, South Africa becomes the front-runner in the continent in making it mandatory for digital asset exchanges to acquire licenses as crypto regulators globally are ramping up crypto regulations.

This regulation impacts several notable trading platforms that originate from South Africa, including Digital Currency Group-owned Luno and Pantera Capital-backed VALR crypto exchange. Globally operating platforms like Binance, which have a presence in the country, will also need to comply with the licensing requirement.

As per an FSCA representative, anyone offering financial services in crypto assets, barring certain exceptions like crypto miners and NFT service providers, must seek authorization. Non-compliance with this requirement is a legal infringement, and the concerned authorities may initiate regulatory action.

The FSCA has been an active participant in crypto and fintech regulations, partnering with an “inter-governmental fintech working group” that comprises key financial sector regulators and policymakers, including the National Treasury and the South African Reserve Bank.

However, this trend of ramped-up regulations isn’t exclusive to South Africa. On July 3, Singapore’s Monetary Authority declared that crypto service providers must place customer assets in a statutory trust by the year’s end for secure storage. This move signifies a global trend towards more stringent regulation in the crypto sector.