A new crypto coalition, called CATASTROPHE, warns proposed cross-border regulations could threaten thousands of jobs, hit millions of crypto holders and cost the fiscus billions of rand in tax revenue.
It is calling on National Treasury and the South African Reserve Bank (SARB) to rethink the draft rules.
“Thousands of jobs in South Africa would be threatened, millions of South African crypto holders would be adversely impacted and billions [in] tax revenues to the South African Revenue Service could disappear if these draft regulations are implemented as currently drafted,” the alliance warns.
The Crypto Asset Taskforce for Advancing Sound, Technology-Neutral Regulation for Opportunity, Prosperity and a Healthy Economy (CATASTROPHE) is a coalition of crypto asset service providers, including VALR, Luno, AltCoinTrader and EasyEquities, as well as professors, lawyers, economists, entrepreneurs and other members of the public.
“We support effective regulation, transparency, reporting, tax compliance and measures to combat financial crime. But regulation should not discriminate against an activity simply because it uses a different technology,” it says on its website, which was registered on 10 August.
Maybe, maybe not
CATASTROPHE, launched today and formed over the past few weeks, wants all South African individuals and businesses to endorse a campaign to get National Treasury and SARB to change the proposed crypto provisions in the Draft Capital Flow Management Regulations and its associated manual by the end of the month.
SARB’s move aims to align digital currency with a 1961 Currency and Exchanges Act, which itself stems from a 1933 law. There are currently dissenting views from two High Courts as to whether crypto can be regulated under this law.
In a 2025 Pretoria High Court case, Judge Mandlenkosi Motha found that crypto-currency was not subject to South Africa’s existing foreign exchange regulations.
But in a June 2026 judgement from the Johannesburg High Court, Judge Stuart Wilson expressly departed from that finding, ruling that Bitcoin constitutes capital under the country’s exchange control framework and can be subject to forfeiture for regulatory breaches.
Comment on the Draft Capital Flow Management Regulations closed at the end of June, with National Treasury subsequently publishing a draft manual governing cross-border crypto transactions, open for comment until the end of this month.
Desiree Reddy, director at Deneys Attorneys, has noted that National Treasury publishing the manual ahead of government finalising the regulations creates uncertainty – a situation National Treasury has also acknowledged.
The manual, National Treasury says, forms part of a “broader effort to strengthen the oversight of cross-border financial activities and to address emerging risks associated with crypto assets”.
Harmful repercussions
CATASTROPHE argues the proposed legislative changes are restrictive and will harm domestic enterprises and jobs, slow economic participation, and isolate South Africa from the global digital economy. It says the draft rules “introduce two major restrictions”.
The first would see local businesses “prohibited from using regulated crypto rails for otherwise legitimate international transactions,” limiting their ambition to be globally competitive, CATASTROPHE says.
The second means individuals could move crypto from a local provider to a self-hosted wallet but could not transfer it back to a regulated South African platform. “This creates an arbitrary one-way door out of the domestic regulated ecosystem and would force legitimate activity to go underground or overseas,” says CATASTROPHE.
CATASTROPHE says government should instead apply the approach SARB governor Lesetja Kganyago laid out at the MTN Group Fintech 2026 Summit last week.
One rule for them all
Speaking about the National Payment Systems Bill and regulation of fintech firms versus banks, Kganyago said: “Similar payment activities should be subject to similar regulatory expectations, whether they are performed by a bank or a fintech.”
The coalition argues that failing to apply the same principle to cross-border payments would represent a departure from sound, technology-neutral regulation and would be inconsistent with the principle articulated by the governor.
“Equivalent economic activities must receive equivalent regulatory treatment regardless of whether traditional banking infrastructure or blockchain technology is used,” its statement says.
CATASTROPHE adds: “While the rest of the world integrates modern digital payment rails, the current draft regulations threaten to prevent South African businesses and residents from benefiting from these global advances.”
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