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In a significant development, the Financial Market Regulator of the CEMAC Zone recently introduced updated financial market regulations. These regulations establish a long-awaited legal framework for crypto platforms operating within the Cameroon, Central African Republic, Chad, Congo, Equatorial Guinea, and Gabon regions. This move comes in response to growing concerns about the lack of regulation in the crypto-asset offerings market and aims to bring much-needed clarity and oversight to the industry.
Recognition of Bitcoin in the Central African Republic
Notably, the President of the Central African Republic passed a law recognizing Bitcoin as an alternative to the fiat currency within the CEMAC Zone applicable in this country.
However, the Banking Commission of Central Africa responded by issuing a decision in May 2022, prohibiting regulated financial institutions and their partners from facilitating any kind of crypto-asset transactions.
The Updated Regulation: An Overview of Virtual Asset Services
The publication of the updated regulation is a positive step forward, bringing more legitimacy and confidence to the crypto industry. This comprehensive framework defines virtual asset services and outlines the specific services or operations considered within this realm. The regulation includes the following virtual asset services:
- Custodial Services: Providers offering secure custody of virtual assets on behalf of others.
- Exchange Services: Facilitating the exchange of virtual assets for legal tender or other virtual assets.
- Trading Platforms: Operating platforms that enable users to buy, sell, and trade virtual assets.
- Additional VA-Related Services: Offering various services such as receiving and transmitting orders for third parties, managing portfolios, providing advice, and making investments.
Market Intermediaries and Virtual Asset Service Providers
The updated regulation introduces a new category of actors known as “Market Intermediaries.” These individuals or entities are accredited to provide financial services regularly.
Within this category, we find “Virtual Asset Service Providers,” which specifically offer services related to virtual assets. It is essential to note that the updated regulation also considers virtual asset services as a distinct type of financial service.
The Positive Impact on the Industry
The introduction of this legal framework brings much-needed clarity and stability to the crypto platforms operating in the CEMAC Zone. While we await the implementing instrument for this regulation, industry players can finally breathe a sigh of relief, as it signals a turning point and fosters a more conducive environment for growth.
Conclusion
The updated financial market regulation in the CEMAC Zone represents a significant milestone for the crypto industry, providing a clear legal framework for virtual asset services. This step is expected to enhance investor confidence, promote responsible practices, and drive the sustainable growth of crypto platforms within the region.
As the industry eagerly awaits the implementing instrument, stakeholders can take comfort in this positive shift towards a more regulated and secure environment for virtual asset services in the CEMAC Zone.
