The South African Central Bank has announced that cutting off banks’ relations with cryptocurrency investors due to possible risks is a threat to financial integrity.
The Reserve Bank of South Africa Prudential Authority has told banks and their subsidiaries not to cut off all ties to cryptocurrencies in its directives.
Central Bank Considers Cutting Crypto Relationships a Risk
The South African Central Bank, in its directive to its subsidiaries and banks, urged that breaking off cryptocurrencies poses a long-term risk to financial integrity and should be avoided.
This official announcement was signed by Fundi Tshazibana, CEO of Prudential Authority. In the past, some South African banks have cut ties with crypto asset service providers (CASPs) due to unclear regulations or high risk factor.
The published paper provides the following explanation about risk assessment:
“Risk assessment does not imply that institutions should avoid risk altogether, for example, through the wholesale termination of CASPs’ relationships with customers”
The text also states that such a move could even be a “threat” to overall financial integrity, as it could limit the possibilities of resolving issues such as money laundering.
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