The National Treasury and the South African Reserve Bank (SARB) are assuring crypto traders that newly proposed laws do not seek to criminalize the possession of digital assets, nor will they apply retrospectively.

The authorities were responding to a wave of public and media backlash over the draft Capital Flow Management Regulations, which are currently open for public review.

According to the draft, the regulations aim to manage and enforce control over cross-border financial flows. This will overhaul the existing 1961 Exchange Control Regulations by shifting from a rigid pre-approval model to a modern, risk-based surveillance system. Crucially, these new regulations are designed to formally define crypto assets and bring them within the scope of South Africa’s capital flow framework.

Legal and financial experts note that this development aligns with broader regulatory shifts in South Africa, such as the Financial Sector Conduct Authority (FSCA) previously declaring crypto assets as financial products. However, the draft caused massive public concern, with many arguing that the regulations failed to provide clear insight or protections for individuals who already hold acquired crypto assets.

Message from the National Treasury and SARB

In a joint statement, the National Treasury and the SARB assured the public that their inputs to the regulations are actively being considered. To give stakeholders enough time to review the text and provide thorough feedback, authorities have extended the deadline for public commentary from May 18 to June 30.

“A proposed cross-border crypto asset framework, in the form of a draft manual, will soon be released for public comment to complement the draft regulations,” the authorities stated. “This draft manual will provide clarity on the proposed activities that would result in a crypto asset transaction being considered cross-border, and clarify when a transaction is subject to appropriate capital flow management measures.”

The authorities added that public fears regarding asset seizures, specifically concerns that holders of crypto, gold, or foreign currency might be forced to sell their holdings to the state or authorized foreign exchange banks, are misunderstood. A requirement to dispose of these assets would only arise under highly limited and specific circumstances, such as when a financial offense has been committed.

“The proposed framework will complement the regulatory regimes already implemented by the Financial Intelligence Centre (FIC) and the Financial Sector Conduct Authority (FSCA),” they concluded.

How to Comment on the Draft Bill

Members of the public, crypto traders, and industry stakeholders are encouraged to submit their formal written inputs before the extended deadline.

• Submission Deadline: Close of business on Tuesday, 30 June.
• Where to Send Comments: Written submissions must be emailed directly to the National Treasury at Commentdraftlegislation@treasury.gov.za.

Following the June deadline, the National Treasury and the SARB will review all public submissions and make appropriate revisions to the final framework.

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