By Colleen Goko.
South Africa took a step on Monday toward bringing cryptocurrency into its financial rulebook, releasing draft guidelines that for the first time spell out when moving crypto across borders becomes a regulated and reportable event.
The draft Crypto Asset Manual, published jointly by the National Treasury and the South African Reserve Bank, builds on a broader overhaul of the country’s capital flow rules proposed in April.
The move comes as crypto use deepens in South Africa. The country already has hundreds of licensed virtual asset service providers, according to blockchain analytics firm Chainalysis. Major banks are also in advanced stages of developing crypto products for institutional clients.
The practical effect is that if you want to send crypto offshore, you will soon need to do it through an authorised provider, and the transaction will be reported to the Reserve Bank’s Financial Surveillance Department, known as FinSurv.
The rules are designed to prevent crypto assets from being used as a backdoor around South Africa’s existing financial controls and to help authorities detect and disrupt illicit financial flows.
Under the proposed rules, a crypto transaction only becomes a cross-border event when assets move from a local authorised Crypto Asset Service Provider to an offshore provider, or into a private, non-custodial wallet.
Buying or selling crypto in rand through a local provider would not trigger a report. For now, only individuals would be permitted to move crypto assets offshore, and only within their existing foreign currency allowances.
The SARB said the framework does not give crypto legal tender status and does not yet distinguish between different types of crypto assets, with further research ongoing.
Interested parties have until September 30 to submit comments.