South Africa to introduce cross-border crypto framework in 2025
It will set parameters, conditions, administrative responsibilities, and reporting requirements for cross-border crypto transactions.
South Africa’s finance minister, Enoch Godongwana, says the country will not draft a comprehensive cryptocurrency exchange control exemption framework.
Instead, the South African Reserve Bank (SARB) will publish a targeted framework later this year to regulate cross-border crypto asset transfers.
Quick facts
- Godongwana said the SARB will publish the framework after completing consultations with the National Treasury and the Financial Sector Conduct Authority (FSCA).
- The framework will specifically target crypto asset service providers (CASPs) involved in cross-border transactions, including major cryptocurrency exchanges operating in South Africa such as Binance, Luno, and VALR.
- It will set parameters, conditions, administrative responsibilities, and reporting requirements for cross-border crypto transactions. The goal is to prevent regulatory loopholes and stop illicit financial flows, Godongwana said.
Key quote
Godongwana said:
“Further, the National Treasury is currently engaging the SARB on updating and strengthening the exchange control legislative framework to enable the above framework.”
The National Treasury, through the Financial Regulators Steering Committee, comprising the SARB, FSCA, Prudential Authority and the National Treasury, will coordinate further discussions.”
Why it matters
- The move follows a May ruling by the Pretoria High Court that South Africa’s outdated exchange control rules do not apply to cryptocurrencies and need urgent reform. However, SARB appealed the judgment.
- According to Godongwana, the new framework addresses three primary regulatory concerns identified by the Intergovernmental Fintech Working Group: money laundering and terrorist financing, consumer protection and market conduct, and circumvention of exchange controls.
- Since December 2022, CASPs have been designated as accountable institutions under the Financial Intelligence Centre Act, making them subject to anti-money laundering and counter-terrorism financing rules.
