South Africa’s crypto rules will get a second draft. Finance Minister Enoch Godongwana told Parliament on Wednesday 21 October 2026 that National Treasury and the South African Reserve Bank (SARB) will rewrite the draft Capital Flow Management Regulations, the rules that would bring crypto assets inside the country’s exchange control system. Speaking in his Medium-Term Budget Policy Statement speech, he said the two bodies had received “thousands of comments” and that consultations will start, with a revised second draft to follow. He gave no date. He did not say which provisions will change.
This is a rewrite, not a withdrawal. The draft regulations published in April and the draft Crypto Assets Manual published in August are still drafts, and neither has been withdrawn or adopted. What the minister changed is the stated method: “We must aim to shift away from pre-approvals,” he said, adding that transactions should instead be assessed for legitimacy and tax compliance.
None of these South Africa crypto rules is in force, and none has been dropped. For holders of bitcoin, stablecoins and other tokens, the drafts still contain a written declaration duty above a threshold nobody has set, a duty to sell declared coins for rand if Treasury or an authorised firm offers to buy them, search and seizure powers, and penalties of up to R1 million or five years in prison. Whether any of that survives into the second draft is the open question.
What Godongwana said: a different approach, a second draft, no timetable
The crypto passage of the speech runs to six sentences under the heading “Crypto regulations”. Godongwana recalled that Treasury and the SARB had published draft capital flow management regulations earlier this year, “which included the cross-border treatment of crypto assets”.
“We received thousands of comments, and it is clear that we need to take a different approach to these amendments,” he said.
Instead of pre-approvals, he said, transactions must be assessed for legitimacy and tax compliance, and the treatment of crypto assets should be guided by the recommendations of the Financial Stability Board, the body of central banks and finance ministries that coordinates financial rules for the G20. His last sentence on the subject set out the next step: “Consultations will commence, with the aim of publishing a revised second draft of the regulations for further input.”
The press read it as a climbdown: TechCentral wrote that Treasury “backs down”, and Bitcoin.com News said South Africa “backtracks”. The words of the speech support something narrower: a change of approach and a new consultation. The speech names no regulation that will go, no threshold, no penalty that will be cut. It speaks of “the regulations” and never mentions the Crypto Assets Manual, so it is not clear whether the manual will be redrafted on the same track.
What the April Capital Flow Management Regulations would do to crypto
The draft was published for comment on 17 April 2026 as Government Notice No. 54520 in Government Gazette No. 7375, according to the government news agency SAnews. It would replace the Exchange Control Regulations of 1961, the framework that still governs how money leaves and enters the country. SAnews said the overhaul is aimed at combating illicit financial flows, and Treasury and the SARB later described the goal as helping the SARB detect, deter and disrupt them.
The draft text puts crypto assets next to currency, gold and securities in almost every provision. Its definition of “capital” expressly includes crypto assets. An “authorised crypto asset service provider” is a provider registered under the Financial Intelligence Centre Act that Treasury has also authorised to handle crypto transactions treated as imports or exports of capital.
Trading only through authorised providers
Under draft regulation 3, anyone who is not an authorised provider may buy, sell, borrow or lend crypto assets above a “determined threshold” only with an authorised provider, unless Treasury grants permission. The threshold is a value set by the Minister of Finance. The draft does not give a figure. A buyer must apply to an authorised provider, hand over the documents it asks for and use the coins only for the purpose stated in the application. If the coins are no longer needed for that purpose, the holder must immediately offer them for sale to Treasury or an authorised provider, which can buy them back in rand at the original price or another price it sets.
A 30-day declaration and a duty to sell
The provision critics call forced sale is draft regulation 8. Anyone in South Africa who controls, obtains or becomes entitled to transfer crypto assets above the determined threshold must declare them in writing to Treasury or an authorised person within 30 days. Treasury, an authorised dealer or an authorised provider “may purchase” those assets, and the holder “must sell” them, for rand, at a price not below market value on the day of purchase.
Condia and Bitcoin.com both report that holders above the threshold could have been required to declare and sell to the state for rand, and Bitcoin.com says the thresholds were to be set in the manual, which gave no figures. Treasury and the SARB answered that reading in a joint statement on 15 May, the same one that extended the comment deadline to 30 June 2026. The draft regulations, they said, “do not intend to criminalise the possession of crypto assets” and will not apply retrospectively. “Any requirement to dispose of these assets would arise only under limited circumstances,” the statement added, giving the example of an offence. The wording of regulation 8 in the April text was not changed by that statement.
Border declarations, searches and the R1 million penalty
Under draft regulation 5, travellers entering South Africa would have to declare in writing any crypto assets in their possession or under their control, as they would cash or gold. Under draft regulation 4, people leaving would have to say, if asked, whether they hold crypto they intend to take out. Enforcement officers, a category that covers customs officers, immigration officers, police and Border Management Authority staff, could search people and outgoing parcels, and seize crypto assets they suspect, on reasonable grounds, are being taken out of the country in breach of the rules.
Any breach is an offence under draft regulation 29, including a false or incorrect statement in a declaration. The penalty is a fine of up to R1,000,000, imprisonment of up to five years, or both. Where the offence involves money or crypto, the fine can instead equal the value of the assets, if that is higher. VALR chief executive Farzam Ehsani called the April draft “an alarming document”, pointing to its search and seizure powers, TechCentral reported.
The August Crypto Assets Manual and self-custody wallets
On 3 August, Treasury and the SARB published a second document for comment, the draft Crypto Assets Manual for cross-border activities, with comments due by 30 September. It is meant to explain how the regulations would work in practice: how a firm applies to become an Authorised CASP, which cross-border transactions need permission, and what must be reported to the SARB’s Financial Surveillance Department (FinSurv).
The manual sets the point at which a crypto transaction becomes cross-border. According to the 3 August statement, the trigger arises when crypto is transferred between a domestic Authorised CASP and an offshore CASP, or from a domestic Authorised CASP to a non-custodial wallet, and the resulting flow must be reported to FinSurv. That means, the statement says, that “only individuals, at this stage, will be allowed to externalise crypto assets via Authorised CASPs”, within their single discretionary allowance or their foreign capital allowance. TechCentral puts those at R2 million and R10 million, the second requiring approval with tax compliance checked through the South African Revenue Service.
What Table 1 of the August statement says about non-custodial wallets
The statement includes a table of transactions, Table 1. A resident individual who moves crypto from a domestic Authorised CASP to an offshore CASP, or to “the individual’s non-custodial wallet”, is making an export of capital, reportable to FinSurv. The same rows mark these transfers as non-permissible for South African entities. In the other direction, a transfer from an offshore CASP to a domestic Authorised CASP is an import of capital, reportable, and again non-permissible for South African entities “as well as transfers originating from non-custodial wallets”.
Critics went further. Condia wrote that the manual would have banned transfers to and from non-custodial wallets, which critics called a ban on self-custody, and Bitcoin.com said both inbound and outbound transfers involving such wallets would have been prohibited, quoting industry analysts who said it would cut South Africans off from decentralised finance (DeFi). The table, as published, does not prohibit an individual’s outward transfer to a personal wallet: it classes it as a reportable export that counts against the offshore allowance. Inward transfers from non-custodial wallets are listed as non-permissible. Read literally, that leaves no listed route for sending coins from a personal wallet back to a local exchange.
Companies would have no route at all. Because only individuals may externalise crypto at this stage, TechCentral said, firms could not move crypto across the border in either direction. That reaches rand stablecoins aimed at corporate treasuries. TechCentral cites Zaru, launched in February with backing from Sanlam, Luno, EasyEquities and Lesaka Technologies. Luno argued that treating stablecoin payments as capital flows, when the same payment through a bank would not be, may conflict with South Africa’s commitments to the International Monetary Fund, TechCentral reported. It also objected to the company ban. Our guide to how stablecoins work and what backs them explains why a rand token is still a crypto asset under these definitions.
The August statement itself warned that the manual “has not yet taken into consideration the inputs already submitted” on the regulations, and that both documents remain subject to refinement. The minister’s speech is the first official word on how far that refinement may go.
From the February budget to the October rethink: the dates
| Date (2026) | Step | Source |
|---|---|---|
| February | Budget speech: crypto assets “will now be governed in the cross-border movement of capital framework” | ITWeb |
| 17 April | Draft Capital Flow Management Regulations published for comment | SAnews, Treasury |
| 15 May | Joint statement: comment deadline extended, no intent to criminalise possession | SARB, Treasury |
| 30 June | Extended deadline for comments on the draft regulations | SARB |
| 3 August | Draft Crypto Assets Manual for cross-border activities published | Treasury, SARB |
| 30 September | Comments on the draft manual close | Treasury, SARB |
| 21 October | Medium-Term Budget Policy Statement: revised second draft promised, no date | gov.za |
In September, the SARB said the proposals were still “draft requirements” and that it was engaging with the industry on several points, including stablecoins, according to TechCentral.
Why the SARB wants crypto inside exchange control
Residents still face limits on how much money they can move abroad, and crypto offers a way around them. “Crypto payments are borderless, they present an avenue to circumvent exchange controls,” the Reserve Bank warned, as quoted by TechCentral, which also reported a SARB estimate that nearly R63 billion moved from South African bitcoin wallets to foreign wallets since January 2019. Coindaro has not checked that figure against a SARB publication.
The capital-flow rules would sit on top of two regimes already in force. The Financial Sector Conduct Authority (FSCA) has declared crypto assets such as Bitcoin and Ether to be financial products under the Financial Advisory and Intermediary Services Act, and since 2025 the Financial Intelligence Centre has treated crypto asset service providers as accountable institutions with reporting and registration duties, ITWeb reported. The August statement says the new measures would complement oversight by the FSCA, the FIC and the revenue service. None of those bodies wrote the contested rules: they come from Treasury and the SARB.
Ehsani wants more than a redraft. According to Bitcoin.com, he called for the exchange control regime to be abolished, citing Nelson Mandela’s 1996 State of the Nation Address and its promise to phase out capital controls gradually. If the controls stay, he argued, they should apply on a technology-neutral basis rather than single out digital tools.
What happens next to South Africa’s crypto rules: a second draft with no date
Consultations come first, then a revised second draft, then another round of public comment. Treasury has published no calendar for any of those steps. A final version would still have to be gazetted before it took effect.
The minister’s preference for checking transactions after the fact, rather than approving them in advance, points at the permission system in draft regulation 3 and at approval-based routes such as the R10 million allowance. He did not tie it to any provision, though. Several questions remain open:
- whether the 30-day declaration and the duty to sell in draft regulation 8 stay, and whether the threshold finally gets a figure;
- the R1 million fine and the five-year prison term, kept or cut for individual holders;
- a possible redraft of the manual as well, including its non-custodial wallet rows;
- a lawful route for companies, rand stablecoin issuers included, to move crypto across the border.
Luno warned that the rules as drafted would raise costs for ordinary users and push activity into channels regulators cannot see, Bitcoin.com and Condia reported. Neither Luno nor VALR had published a statement on the 21 October announcement itself when this article was written; their quoted views date from the consultation. For readers following the rand stablecoin side, the Africa Stablecoin Summit in Cape Town on 12 and 13 November is the next large industry gathering in the country.
How the South African draft compares with Europe and Russia
Self-custody restrictions are on other agendas too. Russia plans to bar transfers to self-custody wallets as it ends peer-to-peer crypto trading, as covered in our report on Russia’s P2P and wallet rules for 2027. The European Union took another route. Under the Transfer of Funds Regulation, Regulation (EU) 2023/1113, in force since 30 December 2024 alongside the MiCA licensing regime, a crypto firm that sends coins to a self-hosted address, or receives them from one, must obtain and hold the sender and recipient information for that transfer. Above 1,000 euros, it must take adequate measures to assess whether its own customer owns or controls that address (Articles 14(5) and 16(2)). The EU checks who controls the wallet; it does not forbid the transfer. Our MiCA explainer sets out what EU rules require of crypto firms.
Custodial and non-custodial wallets, in short
A custodial wallet is an account at an exchange or broker: the provider holds the private keys, and the customer holds a claim on the provider. A non-custodial or self-custody wallet keeps the keys with the owner, on a phone app or a hardware device, and no company can freeze or move the coins. That difference is why the South African manual treats a withdrawal to a personal wallet as coins leaving the regulated perimeter. Our guide to crypto wallets, custody and how to choose one covers both types.