South Africa’s National Treasury and South African Reserve Bank (SARB) are preparing to revise proposed regulations governing cross-border cryptocurrency transactions after receiving thousands of public comments on the draft framework.
Finance Minister Enoch Godongwana announced the change in direction while presenting the 2026 Medium-Term Budget Policy Statement on October 21. He said the volume of feedback made it clear that the authorities needed a different approach to the proposed amendments.
“We must aim to shift away from pre-approvals. Instead, we must assess transactions for legitimacy and tax compliance,” Godongwana said.
The government plans to begin further consultations and publish a revised second draft of the regulations for additional public input.
The announcement follows months of opposition from cryptocurrency exchanges, digital asset businesses and other financial sector participants, who warned that the original proposals could restrict legitimate transactions, complicate the use of stablecoins for international payments and push crypto activity towards offshore platforms.
Although the government has not abandoned its plans to oversee cross-border crypto movements, the proposed shift could change how those transactions are assessed and reported.
Why South Africa proposed new crypto rules
South Africa’s proposed changes form part of a wider effort to update its exchange control framework, which governs the movement of capital into and out of the country.
National Treasury published the draft Capital Flow Management Regulations in April 2026 as part of an overhaul of the existing framework. The SARB’s Financial Surveillance Department subsequently published a draft Crypto Assets Manual for Cross-Border Activities in August, setting out how crypto transactions involving local and foreign platforms or private wallets would be treated.
The authorities’ stated concern is that cryptocurrency can move across borders without passing through traditional banking channels. This can make it more difficult to monitor capital movements, enforce exchange control requirements and detect illicit financial flows.
Under the proposed framework, certain transfers involving South African-authorised crypto-asset service providers, offshore platforms and non-custodial wallets would be treated as cross-border transactions subject to specific conditions and reporting requirements.
A non-custodial wallet allows users to control their own private keys rather than relying on an exchange or another third party to hold their crypto assets.
The draft manual proposed that cross-border crypto transfers should take place through authorised service providers and be reported to the SARB’s Financial Surveillance Department. It also placed significant limits on how individuals and businesses could move crypto assets across borders.
The authorities intended the framework to complement existing rules on financial crime, tax compliance and crypto-asset services rather than replace them.
However, critics argued that applying traditional exchange control principles to crypto without sufficiently accounting for how digital assets are used could restrict legitimate financial activity.
Why the proposed rules faced backlash
The proposals attracted opposition from crypto exchanges, fintech companies, banks and other industry participants.
One of the central concerns was that the framework could make it difficult for South African businesses to use stablecoins for cross-border payments.
Stablecoins are crypto assets designed to maintain a relatively stable value by tracking an underlying asset, commonly a fiat currency such as the US dollar. Businesses and individuals can use them for payments, settlement and international transfers.
Industry participants argued that restrictions on these transactions could force companies back towards traditional foreign exchange channels, which may be slower or more expensive for some use cases.
Another point of contention involved transfers between regulated local platforms and self-custody wallets.
Under the proposed framework, transfers from a domestic authorised crypto-asset service provider to a non-custodial wallet could trigger cross-border treatment and associated restrictions. Critics argued that the approach risked limiting legitimate self-custody and making it harder for South Africans to interact with international crypto platforms and decentralised finance applications.
Businesses also raised concerns about the proposed treatment of corporate crypto transactions. Restrictions could affect companies using digital assets for international payments, treasury operations and settlement.
The industry’s objections were not necessarily a rejection of regulation itself. Many participants argued that oversight should focus on the purpose and risk of a transaction rather than treating a transaction differently simply because it uses blockchain technology.
The response was substantial. According to Godongwana, the authorities received thousands of comments on the draft regulations.
The proposals also drew attention from a wider group of financial sector participants concerned about how the rules could affect competition, investment and South Africa’s ability to participate in emerging digital financial networks.
Treasury signals a shift away from pre-approval
Godongwana’s announcement suggests that the government is reconsidering how it intends to oversee cross-border crypto transactions.
Rather than requiring prior approval for certain transactions, the proposed direction would place greater emphasis on assessing whether transactions are legitimate and comply with tax requirements.
The distinction is important.
A pre-approval model can require users or service providers to obtain permission before carrying out a transaction. A verification-focused approach could instead assess the transaction’s legitimacy and compliance through documentation, reporting and oversight mechanisms.
However, moving away from pre-approval does not necessarily mean removing exchange controls or allowing unrestricted movement of crypto assets across borders.
The authorities have not yet published the revised draft, so the precise requirements remain uncertain. The final approach could still include reporting obligations, transaction monitoring, limits on certain activities and requirements for authorised service providers.
The announcement also does not mean that the government has approved all cross-border crypto transactions that would have been restricted under the original proposals.
For now, the significance lies in the decision to reconsider the framework before finalising the rules.
What the revised framework could mean for stablecoins and businesses
The revision could be particularly important for companies exploring stablecoins for international payments and settlement.
Stablecoins can offer an alternative way to transfer value across borders, particularly where traditional payment systems involve several intermediaries or delays. However, their use can also raise concerns involving money laundering, sanctions compliance, tax reporting and the movement of capital.
The challenge for regulators is to address these risks without unnecessarily restricting legitimate transactions.
Industry participants have argued that economically similar transactions should face comparable regulatory treatment, whether they are carried out through conventional financial infrastructure or blockchain-based systems.
This principle is consistent with the Financial Stability Board’s broader approach to crypto-asset regulation, which emphasises that similar activities and risks should be subject to appropriate and consistent oversight.
Godongwana said the treatment of crypto assets should be guided by the Financial Stability Board’s recommendations.
How the authorities apply that principle in the revised draft remains to be seen. Important questions include whether businesses will have more flexibility to use crypto assets for international payments, how transfers involving self-custody wallets will be treated, and what reporting obligations will apply to different types of transactions.
The revised rules could also affect South African crypto-asset service providers competing with offshore platforms. Industry participants have warned that requirements that are difficult or expensive to meet could discourage customers from using locally regulated services.
If the revised framework provides clearer rules for legitimate transactions while maintaining effective oversight, it could help address some of those concerns. Its actual impact will depend on the provisions included in the next draft.
South Africa’s crypto regulations are not being abandoned
Despite the government’s decision to reconsider the proposals, South Africa is not abandoning the regulation of crypto assets or cross-border capital movements.
Crypto-related activities are already subject to several legal requirements. The Financial Sector Conduct Authority regulates specified crypto-asset services under the existing financial services framework, while the Financial Intelligence Centre imposes anti-money laundering and related compliance obligations on covered businesses.
The proposed capital flow management framework is intended to address a different issue: how crypto assets moving into and out of South Africa should be treated under exchange control rules.
The revised proposals will need to account for these existing requirements while clarifying the responsibilities of service providers and the treatment of different transaction types.
For businesses and individual users, the distinction matters because a change in the proposed exchange control framework would not automatically remove other legal obligations.
The original regulations and accompanying manual remain draft proposals subject to revision. Until new requirements are finalised and come into force, users and businesses should not assume that the government’s announcement has made previously restricted transactions permissible.
What happens next?
National Treasury and the SARB are expected to conduct further consultations before publishing a revised second draft of the regulations for public comment.
The next version should provide greater clarity on how the government intends to assess cross-border crypto transactions, what role authorised service providers will play and how the rules will address legitimate commercial activity alongside financial crime risks.
The announcement marks a change in the government’s stated approach, but it is too early to determine how much the final framework will differ from the original proposals.
For South Africa’s crypto industry, the key issue is whether the revised rules can balance financial oversight with the practical needs of businesses and individuals using digital assets.
The government still wants to monitor cross-border capital movements and enforce tax compliance. The question now is how it will achieve those objectives without imposing unnecessary barriers on legitimate crypto transactions.
The revised draft will be an important step in determining how South Africa regulates the movement of digital assets across its borders.