<\/p>\n
For a moment, South Africa appeared ready to regulate itself out of the next generation of global finance. The proposed rules for moving crypto assets across the country\u2019s borders risked restricting legitimate activity so severely that local businesses and investors could have been left watching the global digital economy develop from the sidelines.<\/p>\n
The announcement that National Treasury and the South African Reserve Bank will reconsider the proposals therefore represents something increasingly valuable in policymaking: sanity prevailing.<\/p>\n
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Growing pushback against proposed cross-border rules for crypto<\/p>\n
At the centre of the concern were the Draft Capital Flow Management Regulations 2026, published in April, and the subsequent Draft Crypto Assets Manual for Cross-Border Activities, published in August. Together, they proposed bringing cross-border crypto activity into South Africa\u2019s capital-flow management framework and setting out how such transactions would be permitted, reported and supervised.<\/p>\n
During the Medium-Term Budget Policy Statement on Wednesday, Finance Minister Enoch Godongwana acknowledged that the \u201cthousands of comments\u201d received made it clear that a different approach was needed.<\/p>\n
He indicated that the authorities should move away from requiring prior approval and instead assess transactions based on their legitimacy and tax compliance. Consultations will commence to publish a revised second draft of the regulations for further input.<\/p>\n
Real public consultation\u00a0<\/p>\n
This should bring considerable relief to South Africa\u2019s digital-assets sector. It also demonstrates why meaningful public consultation matters.<\/p>\n
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Businesses, industry bodies, professionals and individuals did not simply reject regulation. They questioned whether the proposed framework was proportionate, workable and aligned with the direction in which global finance is moving.<\/p>\n
Our industry\u2019s contribution appears to have helped the authorities recognise that effective oversight cannot be achieved by closing legitimate channels or forcing activity beyond South Africa\u2019s borders.<\/p>\n
The concern was never the need for regulation. It was whether the proposed solution would achieve its objectives without undermining legitimate activity and innovation.<\/p>\n
One example was the proposed treatment of self-custody, where individuals hold crypto assets directly rather than through an exchange. The proposals would have allowed assets to move from an authorised South African provider into a person\u2019s own wallet, subject to limits and reporting, but a transfer back to an authorised domestic provider would not have been permitted under the proposed framework.<\/p>\n
In practical terms, it was similar to allowing someone to withdraw an asset from a regulated institution but preventing them from bringing it back. More broadly, restrictions of this nature risked discouraging the use of licensed domestic providers, limiting legitimate commercial activity and pushing parts of the market offshore or outside the regulated system.<\/p>\n
Read:<\/p>\n
New cross-border crypto rules could drive business, jobs offshore
\nSars\u2019s draft crypto tax guide is years late and lacks clarity in key areas<\/p>\n
The implications extend beyond crypto trading. Stablecoins are increasingly being explored as infrastructure for international payments, remittances, settlement and digital commerce.<\/p>\n
Rand-denominated stablecoins could provide a way for the rand to participate in these emerging financial networks and support the use of rand-based value in the global digital economy.<\/p>\n
If South African businesses cannot interact efficiently with international platforms and new financial infrastructure, the global market will not wait. It will continue developing through dollar-, euro- and other currency-backed instruments, potentially leaving the rand increasingly peripheral.<\/p>\n
Revised framework\u00a0<\/p>\n
The revised framework should focus on the economic activity and its risks, rather than the technology through which it takes place. A lawful payment or investment should not automatically be treated more restrictively simply because blockchain technology is involved. Equivalent activities and risks should, as far as possible, receive equivalent regulatory treatment.<\/p>\n
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The objective should be to keep legitimate activity visible, regulated and onshore.<\/p>\n
South Africans should be encouraged to use licensed domestic institutions rather than face rules that may unintentionally push their activity offshore or outside the regulated system.<\/p>\n
The Minister\u2019s reference to the Financial Stability Board is particularly important. South Africa\u2019s approach should not be developed solely through a traditional exchange-control lens. It should be internationally aligned, risk-based and capable of addressing comparable financial risks consistently.<\/p>\n
Listen\/read:
Why SA needs stablecoin regulations \u2013 and fast
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Sarb doubles down on stablecoin regulation<\/p>\n
The real breakthrough may therefore not be the decision to rewrite the rules, but the change in regulatory philosophy. Moving from prior permission to legitimacy and tax compliance recognises that regulation should identify and address actual risk rather than prevent legitimate participation before it begins.<\/p>\n
This does not mean deregulation. It means designing rules that protect financial integrity while keeping lawful activity regulated, visible and onshore. Sanity, at least for now, has prevailed. The real test will be whether the revised framework allows South Africa not merely to regulate the future of finance, but to participate in it.<\/p>\n
Dr Wiehann Olivier is partner and Global co-Head of Digital Assets at Forvis Mazars.\u00a0<\/p>\n
#drawing #board #crossborder #crypto #rules<\/p>\n","protected":false},"excerpt":{"rendered":"
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