Growing demand for South African pension funds to invest in cryptocurrencies like Bitcoin is gaining momentum. Currently, Regulation 28 restricts pension fund investments, but proposals suggest amending the regulation to include cryptocurrencies, potentially impacting the industry and investors. Advocates argue that the cryptocurrency sector has matured and integrated into the global financial system, citing examples like PayPal, BlackRock, and Discovery's Bitcoin fund. Allowing pension fund investments could benefit both the industry and investor protection by offering safer, regulated access to these assets.
As the value of cryptocurrencies, particularly Bitcoin, continues to rise internationally, there have been growing calls for South African pension funds to be allowed to invest in cryptocurrencies.
“Crypto assets have increased 4.25x , a 325% increase. Bitcoin specifically appreciated 5.8x , a 480% increase,” said Ehsani. “If you just look at the facts, it’s integrated by major global financial corporations.” These include companies such as PayPal and BlackRock. The United States, for example, is considering a strategic Bitcoin reserve, and US asset managers offer Bitcoin investments to institutional investors.
This direct investment can be risky, and opening pension funds to cryptocurrency investments would provide safer, regulated access to these assets for South African investors. He suggested that the Treasury and regulators adopt a balanced perspective, especially considering that pension funds are already permitted to allocate a small percentage of their assets to alternative investments.
CRYPTOCURRENCY PENSION FUNDS REGULATION 28 INVESTMENT SOUTH AFRICA
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