South Africa regulates cryptocurrency investments in pension funds
The authorities will take action due to the lack of protection for investors and the speculative nature of the crypto market
Enoch Godongwana, finance minister of South Africa, presented a new bill that excludes the possibility of investing in cryptocurrencies and stipulates some prohibitions when investing the money of the users of pension funds.
In the previous legal norms they contemplated the possibility that the “portfolio managers” will make investments in a “category” that was called “other assets” where the different crypto assets on the market were included.
The amount established by the legal status was 2.5 % of the total money that the affiliates had in the pension fund. However, the new recommendations that are contained in regulation 28 are intended to be normal in the way in which investments can be made.
The Regulation 28 is a rule used by the Pension Fund Law to govern “how funds can be invested and is intended to prevent investors from overinvesting in a single type of asset.”
According to South African officials, there is great concern due to the behavior of cryptocurrencies in the global market, which is “speculative”, thus they are analyzing the different options that allow studying the “possible applications of distributive ledger technology”.
Pension funds and cryptocurrencies
One of the first pension funds in the United States to approved investments in crypto assets was the Fairfax County Police Officers Retirement System in Virginia, starting in 2018 with 0.5 % of those established for business related to blockchain.
Currently, the fund has been increasing its investment percentage in this sector, reaching around 7 % in this type of assets.
M. Rodríguez
Source: noticiascripto.com
