South Africa's crypto industry has won a round. In his medium-term budget policy statement on Wednesday, finance minister Enoch Godongwana told parliament that the National Treasury and the Reserve Bank would rewrite their draft rules on moving crypto assets across the country's borders after receiving "thousands of comments", TechCentral reported.
"It is clear that we need to take a different approach to these amendments," he said. "We must aim to shift away from pre-approvals. Instead, we must assess transactions for legitimacy and tax compliance." He added that the treatment of crypto should follow recommendations from the Financial Stability Board.
What the industry objected to
- The 17 April draft regulations would have required every buyer of a crypto asset to declare when and how it was bought and where it is held
- Officials would have gained powers to search for and seize currency, crypto, gold or securities, with fines of up to R1 million and up to five years in prison
- A Reserve Bank manual in August would have barred companies from moving crypto across the border in either direction
- Individuals could have sent crypto offshore only through authorised local providers and within their R2 million and R10 million allowances
That last company ban threatened rand stablecoins such as Zaru, launched in February with backing from Sanlam, Luno, EasyEquities and Lesaka Technologies. In September, VALR, Luno, AltCoinTrader and EasyEquities formed a coalition called Catastrophe to fight the rules, TechCabal reported, and GoTyme Bank joined it later that month.
The Reserve Bank's case for the rules has not gone away. It argued that because crypto payments are borderless, they offer a way around exchange controls.
