South Africa is set to become one of Africa's first countries to require licenses for cryptocurrency platforms, approving about 60 exchanges and providers by the end of this month.

The move by South Africa's Financial Sector Conduct Authority (FSCA) could make it a model for crypto regulation across the continent as authorities seek to oversee the booming digital asset market while still fostering innovation.

The FSCA received over 300 applications from crypto firms seeking operating permits after setting a Nov. 30 deadline. Officials are reviewing the submissions through existing financial services laws, rather than drafting new crypto-specific rules.

"We are processing those licensing applications and we're doing so in a phased kind of manner given the numbers," FSCA Commissioner Unathi Kamlana told Bloomberg.

The regulator decided the current Financial Advisory and Intermediary Services (FAIS) Act, which governs financial advisors and intermediaries, could sufficiently cover crypto providers for now, Kamlana said.

Key requirements under FAIS include assessments of firms' "honesty, integrity, competency and ability." Licensing would give South African crypto users better recourse if exchanges breach conduct rules.

"If you wait for the Rolls-Royce kind of regulatory framework, you still have those risks anyway," Kamlana said of the interim approach using FAIS. "And we might need to build on that as we discover what those [crypto-specific] gaps are."

South Africa's push contrasts with Nigeria, where escalating government crackdowns on crypto exchanges have sparked an industry backlash. Nigerian security forces recently arrested two executives from Binance, the world's largest crypto exchange, as part of a wider campaign against ”unaccounted” fund flows

While still finalizing its licensing regime, the FSCA is considering requiring roughly 10% of crypto providers with offshore headquarters to establish local branches for proper oversight.

South Africa is home to major crypto trading platforms like Luno, owned by Digital Currency Group, and VALR, which is backed by Pantera Capital. Global giants like Binance also operate there.

NODO has previously reported on how the country is positioning itself as a continental leader by adopting global standards for crypto asset reporting and only permitting registered service providers to operate.

Cape Town hosts the most crypto firms of any South African city, the FSCA study found, reinforcing its status as a tech hub for Africa's digital asset industry.

As crypto goes mainstream across the continent, a key challenge for regulators is implementing guardrails to curb illicit finance and investor risks. South Africa's balanced, phased licensing approach could offer a regulatory blueprint for African nations looking to create credible oversight regimes that can nurture their crypto markets.