The South African Intergovernmental Financial Technology Working Group (IFWG) recently included Mercury FX, a UK-based e-money company, in its first cohort of regulatory sandboxes. The company, which uses the Ripplenet blockchain, says it wants to demonstrate that its technology is capable of reducing the money transfer window to minutes.
Fast and cheap money transfers
In addition, Mercury FX, which says it has tested the technology in the Philippines and Mexico, says its XRP token solution will enable low-cost cross-border money transfers. In addition to Ripple, the company also reveals that it will partner with Valr (a local cryptocurrency exchange) to achieve this goal.
However, according to the IFWG, the inclusion of Mercury FX in the sandbox does not constitute a change in the status of the company’s license, nor an implied or tacit endorsement of the product or service in question. This means that the Mercury process remains subject to certain restrictions imposed by the competent authorities. Moreover, most of the tests are carried out under South African foreign exchange control regulations.
At the same time, the IFWG’s statement also sets out the operating parameters to which Mercury FX will adhere. The statement reads as follows:
Mercury is examining the regulatory and associated implications and reporting requirements for crypto assets (specifically XRP) used for low value cross-border remittances between South Africa and the UK and vice versa.
The IGWG added that at the end of the studies, which can last six months, the lessons learned should clarify how these innovations can be taken into account from a regulatory point of view in the future, thus contributing to regulatory certainty.
Five cryptographic objects accepted
According to the WGIG, during the Regulatory Sandbox enforcement window, which ended on the 15th. A total of 52 applications were received by May 2020. However, only six applications received a node, and five of those are blockchain and crypto solutions.
Of the five, Xapo Technologies, like Mercury FX, will also test the XRP regulatory system for low value cross-border transfers between South Africa and the UK. On the other hand, Centbee will test the regulation of crypto assets (including BTC and BSV) for low value cross-border remittances between South Africa and Ghana and vice versa.
What do you think of the IFWG’s endorsement of cryptocurrency companies? You can share your thoughts below in the comments section.
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