South Africa moves closer to leaving the FATF graylist
South Africa is making a concerted effort to exit the Financial Action Task Force (FATF) grey list, a designation given to countries with inadequate measures to combat money laundering and terrorist financing. The country has been given until October 2025 to ensure the full and sustainable implementation of reforms, and the spotlight is on demonstrating the effectiveness of the comprehensive changes already implemented since the grey listing in February 2023.
The key to South Africa's exit from the grey list lies not in new actions but in proving the durability and effectiveness of the reforms already underway. The country needs to maintain and enforce legislative amendments aimed at strengthening financial oversight, improve regulatory supervision and coordination among law enforcement agencies, and demonstrate that these measures are effectively applied in practice, not just established on paper.
The culmination of these efforts will be a final on-site assessment visit by FATF officials, scheduled for late July 2025. This visit will verify that the reforms are operational and sustainable. If found satisfactory, South Africa is poised for formal removal from the grey list at the FATF plenary meeting in October 2025.
The FATF's focus on countries' ability to regulate cryptocurrencies is not lost on South Africa. Last year, a report by the regulator noted that 97% of African countries are partially compliant or non-compliant with the FATF's guidelines on implementing crypto regulations to combat money laundering and terrorist financing. In response, South Africa has stepped up its crypto regulatory activities, licensing 248 crypto firms since its greylisting in 2023.
The FATF grey list includes 11 African countries, with South Africa and Nigeria among them. This high representation of African countries on the list underscores the continent's challenges in meeting the FATF's standards. The FATF is prioritising how nations regulate cryptocurrencies due to their rising use in money laundering and terrorist financing.
In conclusion, South Africa's journey to exit the FATF grey list is a significant step towards strengthening its financial system and combating money laundering and terrorist financing. The country's success in this endeavour could serve as a model for other African nations facing similar challenges.
- Amidst South Africa's efforts to exit the FATF grey list, Nigeria, another African country, finds itself in the same predicament.
- The general news surrounding Africa highlights the FATF's emphasis on nations' regulation of digital finance, including cryptocurrencies, in the continent.
- The business sector in Africa, particularly in South Africa and Nigeria, is closely watching the progress of crypto regulatory activities.
- Should South Africa successfully exit the FATF grey list, it could potentially lead to a cascade of regulatory changes in the Defi and crypto finance realm across Africa, reshaping the political and financial landscape of the continent.
