South African Finance Minister Enoch Godongwana has announced plans to end the country’s crypto regulatory vacuum by drafting new rules to integrate digital assets into the national capital flow management regime.
Closing the Regulatory Vacuum
South African Finance Minister Enoch Godongwana has signalled a definitive end to the regulatory vacuum surrounding digital assets, revealing the National Treasury’s plan to publish draft regulations to bring cryptocurrency under the country’s capital flow management regime.
The move, detailed during a Feb. 25 budget speech, aims to integrate crypto assets into the cross-border capital movement framework. According to Godongwana, these new rules under the Currency and Exchanges Act will complement existing anti-money laundering and fraud prevention measures.
The Minister’s announcement follows a period of legal uncertainty sparked by a landmark Pretoria High Court ruling in May 2025. In the case of Standard Bank v SARB, Judge Mandlenkosi Motha ruled that South Africa’s 1961 exchange control rules do not apply to cryptocurrencies, which have been in existence for over 15 years. The ruling effectively exempted cryptocurrencies from capital restrictions until new legislation is drafted.
In his ruling, Motha slammed the South African Reserve Bank (SARB) for its reliance on outdated regulations to govern digital assets and rejected the notion that they meet the legal definition of money. However, the SARB has since appealed the decision to the Supreme Court of Appeal, with a hearing expected in 2026. The central bank insists that existing exchange control laws are the correct framework for regulation, and the High Court’s ruling remains suspended pending the outcome of the appeal.
Addressing the High Court’s critique that regulators had been caught napping despite crypto’s 15-year existence, Godongwana clarified that the government would not be seeking “exemptions” for the asset class. Instead, the South African Reserve Bank (SARB) is set to publish a comprehensive framework outlining parameters, administrative responsibilities, and reporting requirements for all cross-border crypto transactions.
Meanwhile, the SARB’s appeal has drawn criticism for what some call “wanting their bread buttered on both sides.” Historically, SARB officials, including Governor Lesetja Kganyago, have been hesitant to even use the word currency, preferring the term crypto assets or even cyber tokens.
Furthermore, while the South African Revenue Service (SARS) seeks to tax crypto gains at the highest possible rates as regular income, the Reserve Bank is now fighting for the right to regulate it under the same strict rules applied to foreign legal tender.
FAQ ❓
- What is the South African government’s new plan for cryptocurrency? National Treasury is drafting new regulations under the Currency and Exchanges Act to officially include crypto assets in the country’s capital flow management regime.
- Why is the South African Reserve Bank (SARB) introducing these rules now? The move follows a 2025 High Court ruling that declared 60-year-old exchange control laws inapplicable to digital assets, creating a temporary regulatory vacuum.
- How will the new framework impact cross-border crypto transactions? The SARB will publish specific administrative and reporting requirements to ensure all international crypto movements comply with national anti-money laundering standards.
- What is the current legal status of crypto exchange controls in South Africa? While the High Court ruled against existing controls, the decision is currently suspended pending an SARB appeal to the Supreme Court of Appeal in 2026.
