South Africa’s Reserve Bank and National Treasury have proposed new draft rules that would prohibit companies from using stablecoins for cross-border transactions while maintaining individual transfer allowances.

Key Points

• The proposed regulations would block South African companies from using stablecoins for any cross-border payments or incoming transfers.
• Individual users retain the ability to move up to R2 million annually without pre-clearance and up to R10 million with tax authority approval.
• Cryptocurrency exchanges VALR and Luno have formally objected, with Luno suggesting potential legal action if the government bypasses parliamentary oversight.
• Reserve Bank Governor Lesetja Kganyago stated the rules aim to integrate digital assets into existing capital flow measures to ensure regulatory consistency.
• Public comment on the draft proposal remains open until the end of September.

Why it Matters

This policy shift highlights a growing tension between traditional financial gatekeeping and the increasing use of stablecoins by businesses to bypass slow, expensive banking infrastructure. By restricting corporate access, South Africa risks pushing digital asset transactions into unregulated channels while diverging from the tax-focused regulatory approaches adopted by other emerging markets like Nigeria.