Brief
South Africa’s finance minister says treasury will rewrite crypto border‑rules after public comments
The Treasury and Reserve Bank will revise their draft capital‑flow rules on crypto assets, citing a need to shift from pre‑approvals to legitimacy checks.
By Felo News Desk · Published
Finance Minister Enoch Godongwana told parliament on Wednesday that South Africa’s Treasury and the Reserve Bank will rewrite their draft rules governing the cross‑border movement of crypto assets after receiving “thousands of comments,” according to TechCentral.
Godongwana said the government must move away from a pre‑approval regime and instead assess each transaction for legitimacy and tax compliance. He added that the treatment of crypto assets should follow recommendations from the Financial Stability Board, the G20‑focused international regulator.
The original draft, released on 17 April, would have brought crypto assets into the Capital Flow Management Regulations, replacing the 1961 Exchange Control Regulations. It required every buyer to declare when and how the asset was acquired and where it was held, and gave officials powers to search for and seize crypto, gold, securities or currency, with penalties up to R1 million and five years’ imprisonment.
The Reserve Bank warned that borderless crypto payments could be used to evade exchange controls, noting that nearly R63 billion had moved from South African bitcoin wallets to foreign wallets since January 2019. The draft also set a R2 million discretionary allowance and a R10 million foreign‑capital allowance for individuals, but barred companies from moving crypto across borders, labeling such transfers “non‑permissible.”
VALR CEO Farzam Ehsani called the draft “an alarming document” because of its broad search‑and‑seizure powers. Luno’s Marius Reitz warned that the rules could push crypto activity offshore, undermining South Africa’s economic relevance. No timeline for the revised draft was provided.
Key facts
- Finance Minister Enoch Godongwala announced a rewrite of crypto border‑rules after receiving thousands of comments. (techcentral.co.za)
- The original draft would have required written declarations for every crypto purchase and gave officials powers to seize assets, with fines up to R1 million and five years in prison. (techcentral.co.za)
- The Reserve Bank said nearly R63 billion moved from South African bitcoin wallets to foreign wallets since Jan 2019. (techcentral.co.za)
- VALR CEO Farzam Ehsani described the draft as "an alarming document". (techcentral.co.za)
- Luno warned the draft could push crypto activity offshore and harm the economy. (techcentral.co.za)
Sources
- [1] techcentral.co.za — originally reported as “Treasury backs down on crypto rules after 'thousands' of comments”
