The growing adoption of crypto-currency by institutional investors calls for a coordinated and comprehensive policy and regulatory responsibility.
However, the disruptive nature of the crypto space poses a challenge for regulators, as they struggle to come to grips with exactly what they must regulate.
So said Lesetja Kganyago, governor of the South African Reserve Bank (SARB), at the 2025 World Economic Forum annual meeting, currently under way in Davos, Switzerland.
The governor participated in a panel discussion on the crypto-currency landscape, joined by Coinbase CEO and co-founder Brian Armstrong, Franklin Resources CEO Jennifer Johnson and Stellar Development Foundation CEO Danelle Dixon, among others.
The panel delved into the current state of the crypto-currency ecosystem, highlighting global regulatory standards, economic freedom, integration of crypto by financial service firms, as well as the impact of the pro-crypto Trump administration on legislation in the US.
“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.”
Armstrong believes it’s the dawn of a new day for the crypto industry. “You have to remember that over the last four years in the US, it was a very hostile environment. I think the lack of clarity got weaponised, and some people in the government tried to curtail or kill the industry unlawfully.
“So, with a new administration coming in, I think we have a path to get clear rules, and we're going to have, hopefully, legislation passed through Congress which will bring in a lot of new investment. And so crypto is really in its infancy. I think it's incredibly exciting.
“This is a technology that's going to update the financial system globally, make it faster, cheaper, more efficient, and the long-term impact of this is that it's actually going to increase economic freedom in the world.”
Dixon added: “I think it's growing. I also still think it's misunderstood. I think that there's not a lot of focus on the actual utility, the velocity of all the assets, like what's actually happening on the chain, that's really transformational.”
Kganyago stressed the importance of clear, consistent regulations across jurisdictions, noting it should not matter whether regulation is for 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 noted that SA’s approach to regulatory engagement focuses on co-creating frameworks with the industry to ensure they are practical and effective.
Dixon commented: “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.”
The crypto-currency industry has dominated headlines and conversations in recent months, compounded by the Donald Trump presidency.
In 2024, Trump made crypto an important element of his campaign strategy, pledging to create a “strategic Bitcoin reserve” and position the US as the “crypto capital of the planet”.
Ahead of the US president’s inauguration on Monday, Bitcoin – the world’s most popular digital currency – surpassed $100 000per single coin, with predictions its rise could potentially reach $150 000 by mid-2025.
Responding to a question from the audience as to whether a Bitcoin strategic reserve is still on the cards for the US, as previously promised by Trump, Armstrong stated: “There is a proposal for the US government to start to hold Bitcoin, and the US government, like many countries, holds reserves in a variety of different assets; for example, gold, oil, rare minerals, etc.
“Many governments hold gold, but I think they should start to hold Bitcoin because it is essentially the new gold standard – it’s a core way to hold assets and value over time. It’s still nascent enough – it has some volatility but that’s getting less and less over time. It still has a lot of upside potential.
“If the US gets that legislation approved, which I hope they do, the rest of the G20 will follow and that could be a huge driver of Bitcoin price appreciation.”
Commenting on whether SA could also follow suit in terms of a Bitcoin strategic reserve, Kganyago said there needs to be distinction between the technology that underpins these assets and the assets themselves.
“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.
“I would have a significant problem with a lobby that says governments should hold this or that asset without the strategic intent of government. There is a history to gold; currencies were once pegged to gold. If we now say Bitcoin is the standard, what about platinum, coal – why don’t we hold strategic beef reserves, mutton reserves, or apple reserves? Why Bitcoin?
“It’s a public policy issue that we have got to be engaged in and I would caution against the move that would say there is an industry with a particular interest in a particular product and we would like to impose it on society and say it must be held as a reserve.”
The South African central bank governor also emphasised the need for transparency and fairness in financial products.
Share