National Treasury has proposed sweeping new controls on the use and movement of crypto assets, limiting how South Africans can buy, sell, lend and transfer digital currencies, particularly across borders.
The government department published the Draft Capital Flow Management Regulations 2026 for public comment last week.
The draft regulations represent a fundamental overhaul of South Africa’s exchange control framework, moving away from the pre-approval model, towards a risk-based system focused on reporting, surveillance of high-impact and high-risk cross-border transactions and combating illicit financial flows.
In draft regulations, Treasury says individuals and firms that are not authorised crypto asset service providers will be prohibited from transacting in crypto assets above a yet-to-be-determined threshold, unless they do so through licensed intermediaries or obtain explicit permission.
The rules effectively centralise high-value crypto activity within regulated entities, requiring anyone seeking to transact above the threshold to apply through an authorised provider and disclose detailed information about the purpose of the transaction.
Crypto assets acquired through such applications may only be used for the stated purpose, with any unused portion required to be offered back to the Treasury or an authorised provider.
The proposal also grants Treasury broad discretionary powers over the sector. It may restrict specific providers from transacting with certain individuals, funds or foreign governments, or limit the purposes for which crypto assets can be used.
Search and seize
Cross-border flows are a major focus of the draft framework, as the regulations prohibit, without approval, the export of crypto assets, currency, gold or securities from South Africa, as well as payments to foreign entities using these instruments.
Travellers may be required to declare crypto holdings when leaving or entering the country, and enforcement officers are empowered to search, seize and potentially forfeit undeclared assets suspected of being moved in contravention of the rules.
The draft further introduces strict reporting obligations, saying South Africans who acquire foreign currency or crypto assets above the threshold must declare them to the Treasury within 30 days.
In some cases, individuals may be required to sell those assets to the Treasury, an authorised dealer or a licensed crypto provider at market-related prices denominated in rand.
Additional provisions require residents to declare all foreign or crypto assets, including details on how and where they were acquired and held. Once declared, such assets may not be sold or transferred without approval from the Treasury or an authorised official.
The measures signal a significant tightening of South Africa’s approach to digital assets, aligning crypto oversight more closely with existing exchange control regulations that govern foreign currency and capital flows.
If implemented, the framework could reshape the local crypto market by increasing compliance requirements, limiting peer-to-peer transactions above certain values, and reinforcing the role of regulated intermediaries.
‘Decisive shift’
Frank Leonette, founder of local crypto exchange Afridax, says under draft Capital Flow Management Regulations, crypto assets are explicitly classified as “capital” − placing them firmly within the country’s exchange control regime.
He notes that the proposal introduces a new class of regulated entities – authorised crypto asset service providers – effectively positioning licensed exchanges as the only legal gateway for significant crypto transactions.
“Individuals would be restricted from buying, selling, lending, or transferring crypto above certain thresholds unless done through these authorised platforms,” Leonette says.
“Crucially, cross-border crypto transfers would require approval, aligning digital assets with traditional foreign exchange controls.”
He adds that the regulations introduce requirements for declaring crypto holdings, limits on usage based on declared purpose, and broad enforcement powers − including the ability to freeze or seize crypto assets in cases of non-compliance.
“The move signals a decisive shift – from crypto as a decentralised financial alternative, to crypto as a regulated channel for capital movement. While this could strengthen licensed exchanges and formalise the industry, it raises questions about the future of self-custody, peer-to-peer trading and financial privacy.”
He points out that for everyday users, crypto is becoming more controlled. “You can expect mandatory use of regulated platforms, identity verification and more transaction monitoring. There may also be requirements to declare holdings, and in some cases authorisation to move funds even from your own private wallet.
“The rules also use adjustable ‘thresholds’ that regulators can change at any time without passing a new law. That means users and platforms need to stay flexible, because the goalposts can and will move.”
Afridax is ready for this shift, Leonette tells ITWeb. “The platform was built licence-first and compliance-first from day one, already aligned with both the Financial Sector Conduct Authority and the Financial Intelligence Centre. That gives it a strong head start as the market transitions.”
However, he states there will be substantial structural changes required to adapt to the new regulations.
“The crypto industry will need to align and present a unified voice to rebuttal some of the harsh regulation proposed around private wallet controls. Lack of disclosure on thresholds is confusing and needs to be workable for today’s financial landscape.”
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