Investing.com - Bitcoin and other major digital coin prices dropped on Wednesday in Asia, after South Africa joined a growing list of countries to announce plans for tighter regulation of cryptocurrencies.
South Africa's central bank outlined plans for new rules that would hold crypto exchanges accountable for ensuring that trade in crypto assets complies with anti money-laundering regulation.
Japan, Denmark and Bulgaria have all announced intentions to regulate crypto trading more tightly this week, in line with a commitment announced by the leaders of the G20 group of nations at their summit in Buenos Aires last month.
Bitcoin, the world’s largest digital coin, lost 1.81% to $3,577.4 by 12:58 AM ET (06:58 GMT).
Ethereum slid 6.59% to $119.4, XRP was down 1.86% to $0.32346, and Litecoin dropped 3.66% to $30.767.
Most major crypto assets had staged a mild recovery on Tuesday.
The South African Reserve Bank's consultation paper didn't propose banning trade in cryptocurrencies.
“In order to achieve anti-money laundering/combating the financing of terrorism (AML/CFT) requirements, more specific requirements will be necessary in line with the recent amendments to the Financial Action Task Force (FATF) Recommendations,” the paper read, adding that “regulatory action should not be delayed.”
It is soliciting opinions until February 15.
FATF, the global anti-money-laundering body, is expected to release guidelines for new rules on the oversight of cryptocurrencies by June 2019.
In South Africa, the proposed rules require all cryptocurrency asset trading platforms, custodial service providers, and payment service providers to register with the authorities and comply with the AML/CFT provisions of the Financial Intelligence Centre Act.
Cryptocurrency service providers should also monitor user transactions, especially large transactions that could be related to terrorism.
The G20's declaration covers economies that account for over 90% of world GDP. However, smaller jurisdictions and offshore tax havens such as the Marshall Islands are still plowing ahead.
The island nation is developing its national cryptocurrency known as Sovereign (SOV), which could be launched this year. The team behind the digital coin said last week that it had made “significant progress in finding partners, investors, and developers” to realise the project.
Major financial bodies such as the International Monetary Fund and the U.S. Treasury Department have criticised the project, warning of “potential costs arising from economic, reputational, AML/CFT, and governance risks.”