South Africa's National Treasury has gazetted the Draft Capital Flow Management Regulations 2026, modernising outdated exchange controls to include cryptocurrencies. The proposals aim to combat money laundering and illicit financial flows but have sparked debate over vague thresholds and restrictions on peer-to-peer transactions. Industry voices criticise the lack of defined limits and potential overreach.
The Draft Capital Flow Management Regulations 2026, issued under Section 9(1) of the Currency and Exchanges Act 9 of 1933, seek to replace the Exchange Control Regulations of 1961. Treasury states the measures target “combating money laundering, terrorist financing and the proliferation of illicit financial flows”.
Crypto payments enabler MoneyBadger, in a statement, argues that the draft bans peer-to-peer transactions above an undefined “determined threshold” unless routed through licensed providers. "Two individuals or a shop owner cannot buy, sell, or accept bitcoin directly above a certain value unless the transaction goes through a licensed crypto provider," MoneyBadger claims. Author James Caw, in a submission, echoes that the absence of exact monetary thresholds makes public consultation flawed, as it hinders assessing real-world impact.
Regulation 10 requires all individuals to declare crypto assets within 30 days, without a minimum threshold. The draft grants Treasury compulsory purchase powers over certain declared assets, payable in rand at market value. Commentators highlight concerns over Regulation 25(5), which allows demands for private keys or seed phrases on forfeited assets, though tied to contraventions with administrative safeguards.
Caw notes that post-action judicial review may prove too slow for volatile crypto markets. The regulations have prompted panic in South Africa's crypto community over fears of state overreach, though some provisions include procedural protections. Public submissions are urged to focus on the draft's text ahead of finalisation.