South African companies could soon be barred from moving crypto assets across the country’s borders, according to a draft framework released for public comment on Monday by the national treasury and the South African Reserve Bank.
Draft manual limits cross‑border crypto for firms
The 88‑page consultation paper, titled the Crypto Asset Manual for cross‑border activities, was issued by the Reserve Bank’s Financial Surveillance Department under Exchange Control Circular No 19/2026. It is not yet law; comments are accepted until 30 September, and the final manual will be drafted after the feedback is reviewed. Implementation also depends on the pending Capital Flow Management Regulations, which remain under review.
Under the proposal, resident individuals retain a limited pathway to move crypto offshore. They may transfer crypto from a South African custodial wallet to an offshore provider or to a private wallet within a R2 million discretionary allowance or a R10 million foreign capital allowance, the latter requiring approval for an international transfer and tax compliance verification via SARS eFiling.
Companies, however, receive no comparable route. The draft states that entities “may not enter into crypto asset transactions deemed as import or export of capital.” A table in the document classifies sending crypto from a domestic authorised crypto asset service provider to an offshore provider or private wallet as a “non‑permissible transaction,” as is receiving crypto from an offshore source. Domestic activities—buying crypto for rand, holding it in a custodial wallet, moving it between local providers, and selling it back for rand—remain permissible.
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Potential impact on business use cases
If the draft is adopted without amendment, several corporate applications of crypto could be shut out. Stablecoin settlement for importers and exporters, a leading use case for institutional crypto in emerging markets, would be unavailable to South African‑registered businesses. Likewise, crypto payment rails for local merchants receiving foreign payments, offshore token fundraising by domestic start‑ups, and corporate treasury strategies involving digital assets held abroad would be prohibited.
For example, a South African software firm invoicing a U.S. client in a dollar‑stablecoin would have no legal avenue to receive that payment through a licensed local provider. The company’s founder could still receive the funds personally within the individual allowance, but the corporate transaction would be blocked.
The Treasury and Reserve Bank argue the rules aim to “minimise the risk of regulatory arbitrage between regulated entities conducting cross‑border activities.” They warn that allowing individuals to do what firms cannot might encourage companies to route corporate flows through personal allowances, a practice the draft treats as a simulated transaction and therefore illegal.
When the Treasury published draft Capital Flow Management Regulations on 17 April, the focus was on individuals, raising concerns about declaration obligations and compelled asset sales. VALR CEO Farzam Ehsani called the document “alarming,” while Luno’s Marius Reitz warned it could stall South Africa’s fintech momentum.
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Beyond cross‑border restrictions, the proposal includes a second set of rules for individuals. While a licensed local provider could send crypto to a personal non‑custodial wallet, moving it back into a domestic custodial wallet is listed as non‑permissible. This creates a one‑way exit for self‑custody, but not an entrance.
Other provisions that may attract scrutiny include a minimum unimpaired capital requirement of R5 million or 15 % of a three‑year average gross income, whichever is higher; a ban on offshoring business processes; and a prohibition on transacting with residents of Lesotho, Namibia and eSwatini.
The draft reflects a tension between supporting innovation and maintaining financial stability. The intent is to prevent regulatory loopholes, but the strict separation between individual and corporate treatment could push businesses to seek alternative, possibly less transparent, mechanisms for cross‑border transactions, potentially weakening the oversight the rules aim to strengthen. Companies may seek custom software development services to handle these restrictions.
Written comments must be submitted to the Reserve Bank by close of business on 30 September 2026. The outcome of this consultation will shape how South African firms engage with crypto assets in the coming years.
