Is it working?

South Africa has moved from ad‑hoc fintech responses to a structured, multi‑regulator framework. The sandbox and guidance units (which reduce regulatory uncertainty); CASP licensing, which has brought a large part of crypto activity into a supervised perimeter; and the NPU/activity‑based payments reforms. If implemented on time inH2 2026, it should materially shift competitive dynamics by lowering infrastructure and licensing barriers for non‑banks. The main execution risks are sequencing (especially between COFI, NPS reforms, open‑finance and AI rules), coordination across multiple regulators and ensuring proportional compliance burdens for smaller fintechs so that innovation and inclusion are not choked by complexity or duplicative requirements.

Actions

Concrete actions already taken include: (i) establishment of the IFWG Innovation Hub, Regulatory Guidance Unit and Regulatory Sandbox, which admits innovators for controlled testing and feeds lessons into policy; (ii) classification of crypto assets as financial products under FAIS, FSCA’s licensing of CASPs (with more than 200 approvals by December 2024) and publication of CASP‑licensing updates and approved‑provider lists; (iii) publication of the IFWG Crypto‑assets Position Paper and related FSCA/FIC communications, mapping a phased regulatory roadmap across conduct, AML/CFT and exchange‑control dimensions; (iv) Budget‑level commitment to NPU establishment and activity‑based payments licensing in H2-2026; and (v) FSCA and PA surveys and strategy documents on AI in financial services and digital‑finance trends.

Are there plans?

Forward‑looking plans include: (i) implementing the activity‑based payments licensing regime in H2 2026, enabling fintechs and other non‑banks to access payment activities directly within a risk‑based regulatory framework; (ii) finalising crypto‑asset regulation by completing the FSCA CASP‑licensing wave (FAIS), embedding Travel‑Rule‑compliant AML/CFT controls and amending exchange‑control regulations to bring crypto flows formally into the capital‑flows framework; (iii) developing an open‑finance framework (data‑sharing, consent and API standards) to allow consumers and SMEs to share financial data securely with third‑party providers; and (iv) publishing an AI and machine‑learning regulatory discussion paper in 2026, leading to a joint FSCA‑PA instrument on responsible AI in financial services, coordinated with broader government AI policy.
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Is it on the agenda?

The 2026 Budget Review places fintech squarely within the financial‑sector reform agenda, highlighting: the Payments Ecosystem Modernisation (PEM) Programme, the NPU and activity‑based licensing for non‑banks; the use of digital infrastructure to reduce payment costs and support inclusion; and work to integrate crypto assets into the capital‑flows management framework and tax/AML regimes. Public speeches and fintech‑policy briefings emphasise that regulators will continue to use the IFWG Innovation Hub and sandbox to align regulation with innovation, while FSCA’s Regulatory Strategy2025-2028 identifies fintech, digital platforms, data and AI as priority themes cutting across sectors.

Goals

To build a coherent, activity‑based regulatory framework for fintech and digital finance, covering payments, open finance, crypto assets and data‑driven business models, so that innovation is enabled within strong consumer protection, anti-money laundering and countering the financing if terrorism, financial‑stability and fair‑competition safeguards.

Documents

• Document One

References

• Reference Link One
• Reference Link Two
• Reference Link Three

Departments / Govt Institutions

Financial Sector Conduct Authority (FSCA) South African Reserve Bank (SARB)