South Africa is tightening the regulatory net around crypto – this time targeting cross-border capital flows.
In an effort to safeguard the financial system while encouraging legitimate investment and capital inflows, national treasury will shortly publish amendments to the exchange control regulations under the Currency and Exchanges Act, finance minister Enoch Godongwana said on Wednesday in his budget speech.
According to the budget, the amendments aim to include crypto assets in the capital flows management framework to complement regulation by the Financial Sector Conduct Authority, which officially declared crypto assets – such as bitcoin and ethereum – to be “financial products” under the Financial Advisory and Intermediary Services Act.
“Similar regulatory action has been taken by the Financial Intelligence Centre, which in 2025 designated crypto asset service providers as accountable institutions subject to supervision, including reporting, registration and enforcement,” the budget said.
Crypto adoption in South Africa has continued to rise, reflected both in the number of registered users at major trading platforms and the value of crypto assets held in custody.
In its Financial Stability Review for 2025, the South African Reserve Bank flagged cryptocurrencies as a new risk to domestic fiscal stability.
TechCentral reported at the time that Nicola Brink, head of department for financial stability at the Reserve Bank, said new technologies can be both good and bad, but they present risks that require monitoring and mitigation.
“The adoption of crypto is increasing in South Africa, both in terms of the number of registered users and the value of crypto assets under custody. One of the key transmission mechanisms through which crypto assets can affect financial stability is through their use in payments and settlements. Also, as crypto payments are borderless, they present an avenue to circumvent exchange controls,” Brink said.
Analysis done by the Reserve Bank shows that since 1 January 2019, nearly R63-billion has been sent from bitcoin wallets originating in South Africa to wallets abroad. Brink said this number is bigger when smaller cryptocurrencies are included.
To curb illicit international flows, national treasury and Reserve Bank and have been working on framework for overseeing cross-border transactions done using crypto.
Christo de Wit, country manager for Luno South Africa, told TechCentral that the new regulations had been expected after the high court in Pretoria ruled last year that crypto assets were not “currency” or “capital” under South Africa’s 1961 Exchange Control Regulations. This means crypto transfers offshore were initially deemed not to require the Reserve Bank’s approval. This ruling is suspended in practice as it is being appealed by the Bank.
De Wit said as digital assets become more mainstream and increasingly integrated with traditional finance, including being sent across borders, regulation will need to modernise and keep pace with their inevitable adoption.
Because crypto assets are neither clearly designated as an onshore nor an offshore asset, this lack of clarity creates uncertainty for financial advisors and investors allocating capital investments to digital assets like bitcoin, as offshore assets are subject to capital allocation limits.
Luno has proposed that crypto be designated as an onshore asset when traded through licensed South African crypto asset service providers (Casps). This will mean investors are not subject to offshore investment limits when investing locally.
Designating crypto as an onshore asset could encourage greater domestic investment in digital assets, progress discussions on the listing of locally traded crypto exchange-traded products and increase tax revenue for the fiscus.
Asked if Luno expects any operational, reporting or cost implications, De Wit said the company does not expect anything “major” for clients.
“Should the Reserve Bank provide clarity on the onshore or offshore status of crypto assets, Casps will report on behalf of users, as traditional financial institutions do. Crypto assets will be subject to exchange control restrictions which limit how much money a firm or individual can send outside of the country per year and how that money leaving the country is reported to authorities,” he said.
Luno has urged the Reserve Bank to implement or amend its cross-border reporting framework to allow for the reporting of cross-border inflows and outflows of crypto assets including stablecoins. Crypto assets like stablecoins are increasingly being used to power cross-border payments globally due to their global nature, lower cost and significantly faster processing times.
Meanwhile, on the Financial Intelligence Centre, which was established to combat money laundering and the financing of terrorist and related activities, the budget said the centre will focus on 10 sectors of designated non-financial businesses or professions. It will do this by adopting a risk-based supervisory approach to identify higher-risk entities, which include designated non-financial businesses or professions, crypto asset service providers, credit providers the South African Mint and South African Postbank.
The treasury has also announced that in an effort to promote South Africa as a competitive financial and investment hub in Africa, it will expand the HoldCo (holding company) concept for corporations. This will allow asset managers to manage their portfolios locally in foreign currency as corporations are permitted to do.
The reforms will enable the creation of a “synthetic financial centre”, which is a digital, borderless ecosystem where financial activities (trading, lending, asset management) occur via smart contracts and derivatives, mimicking traditional, geographic-based hubs.
It will engage in two main activities – the management of portfolios of foreign assets, and the trading of foreign currency denominated financial instruments.
It said this would enable asset managers to intermediate in global capital flows, particularly those invested in Africa, and attract and manage the foreign savings of South African investors. – © 2026 NewsCentral Media
