TLDR:

  • SARB will publish new rules on cross-border crypto transfers by year-end, says Finance Minister Godongwana.

  • Court ruling exempts crypto from SA exchange controls until new regulations arrive, sparking SARB response.

  • Judge Motha says crypto is not money, citing its global nature and lack of legal tender status in South Africa.

  • SARB framework aims to close gaps in regulating crypto exchanges, investment platforms, and payment providers. 

South Africa’s crypto landscape is about to change. Finance Minister Enoch Godongwana confirmed that the South African Reserve Bank will take the lead on a new regulatory framework for cross-border crypto transfers. This follows a High Court ruling that digital assets do not fall under the country’s outdated exchange control laws. 

The move comes amid rising pressure from lawmakers and regulators to create rules that address illicit flows and market oversight. Investors and crypto businesses now wait to see how the new rulebook will shape operations in and out of the country.

Court Ruling Sets Stage for New Crypto Regulations

In May, Judge Mandlenkosi Motha of the Pretoria High Court ruled that existing exchange control regulations do not apply to cryptocurrencies. He said crypto is not money but an asset that is bought and sold, citing its global, borderless nature. 

This decision temporarily freed crypto assets from South Africa’s exchange controls until new regulations are introduced. The Reserve Bank appealed the ruling, but the judgment put pressure on regulators to act quickly.

Motha criticized the Reserve Bank for failing to produce a comprehensive regulatory framework despite crypto’s 15-year history. He noted that other asset classes, such as intellectual property rights, already had their place in exchange control rules. The court’s position directly challenged the SARB’s previous stance that cross-border crypto transfers could be criminal under current laws. This legal shift forced policymakers to fast-track solutions.

Godongwana addressed the matter in response to parliamentary questions from Wendy Alexander, a member of the Standing Committee on Finance. 

He confirmed that the SARB framework will define the rules for crypto asset service providers, including exchanges like Luno, Binance, and VALR. It will also cover investment and payment platforms where value is moved across borders through crypto assets.

SARB Framework to Target Cross-Border Crypto Transfers

The planned framework will set parameters, conditions, and reporting duties for cross-border crypto transactions. According to Godongwana, this will help close gaps that could allow regulatory arbitrage or illicit money flows. 

The National Treasury, along with the Financial Sector Conduct Authority and Prudential Authority, will be part of the process.

The Intergovernmental Fintech Working Group had already identified three main risks in crypto: money laundering, terrorist financing, and evasion of exchange controls. Since December 2022, CASPs have been classified as accountable institutions under the Financial Intelligence Centre Act. 

This means they must comply with anti-money laundering and counter-terrorist financing obligations.

In 2022, the FSCA also declared cryptocurrency as financial products under the FAIS Act, placing them under stricter licensing requirements for service providers. The new SARB-led rules are expected to align with these existing measures while focusing specifically on cross-border movement.

Once published later this year, the framework will replace the temporary gap created by the High Court ruling. For investors, the upcoming regulations may reshape how cryptocurrencies are moved in and out of South Africa, directly impacting trading, investment, and payment services.

 

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