South African Crypto Exchanges Advocate for Pension Fund Investment in Crypto Assets
South African cryptocurrency exchanges are pushing for a change in regulations that currently prohibit pension funds from investing in crypto assets. They argue that allowing pension funds to include crypto assets in their portfolios would enable South Africans to benefit from the substantial growth in cryptocurrency value.
Call for Progressive Policies from the South African Treasury
Crypto exchange VALR’s founder and CEO, Farzam Ehsani, highlighted the significant growth in the value of crypto assets since the prohibition on pension fund investments came into effect. Ehsani emphasized the need for Regulation 28 to be revised to give pension funds the option of including crypto assets in their investment strategies.
Marius Reitz, general manager at Luno Africa, echoed Ehsani’s sentiments, emphasizing that removing the prohibition would align South Africa with global financial market leaders and encourage institutional participation in the crypto space.
Initially, South African regulations permitted pension funds to invest up to 2.5% of their holdings in crypto assets. However, a government proposal in late 2021 banned such investments entirely, citing consumer protection concerns. This prohibition officially took effect in January 2023.
Afridax CEO Frank Leonette believes that the current regulations need to be amended to allow South Africans to diversify their pension funds and benefit from the strong performance of crypto assets like Bitcoin.
The South African Treasury has been urged to formulate policies that promote progress and consider the potential benefits of allowing pension funds to invest in crypto assets. Industry players stand ready to assist in crafting a national cryptocurrency policy that aligns with global standards.