The National Treasury and the South African Reserve Bank (SARB) published a draft Crypto Assets Manual for public comment, outlining a new framework to authorise, monitor and report cross-border crypto asset activity.
The manual is designed to complement the draft Capital Flow Management Regulations released in April and forms part of broader efforts to tighten oversight of crypto-related international financial flows.
Under the proposals, crypto transactions would be treated as cross-border when assets move between a South African-authorised Crypto Asset Service Provider (CASP) and an offshore CASP, or from a domestic CASP to a non-custodial wallet. Such transactions would have to be reported to SARB’s Financial Surveillance Department (FinSurv).
Resident individuals would initially be allowed to externalise crypto assets through authorised providers within existing foreign exchange limits. This includes the single discretionary allowance of about $122 000 a year and the foreign capital allowance of about $608 000 a year, the latter requiring tax clearance.
Resident companies would not be permitted to engage in crypto asset transactions that are classified as capital imports or exports. Transfers between authorised domestic CASPs would be regarded as domestic and would not need to be reported.
The draft introduces three categories of authorised CASPs:
-Category One providers would facilitate remittances using crypto assets as a settlement mechanism.
-Category Two providers would enable specific cross-border crypto transfers through custodial wallets.
-Category Three providers would combine both functions.
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Firms seeking authorisation would require approval from FinSurv, a Financial Sector Conduct Authority licence, registration with the Financial Intelligence Centre, and minimum unimpaired capital of about $304 000 or 15% of average gross income, whichever is higher.
Category One remittance activity would be limited to about $304 per transaction per day and about $1 519 per applicant per month.
Clients would not own or take possession of the crypto assets; settlement between the client and the CASP would occur in rand.
Authorised CASPs would be required to onboard clients in line with the Financial Intelligence Centre Act, retain transaction records for at least five years, monitor custodial wallets, report any deviations within seven days, and submit cross-border transaction data through the FinSurv Reporting System.
The manual emphasises that crypto assets are not legal tender in South Africa, are not guaranteed by the SARB, and remain subject to risks including price volatility and limited legal protection.
Treasury and the SARB said the proposals remain open to revision following public consultation and further stakeholder engagement.
