Growing pushback against proposed cross-border rules for crypto

Opposition to South Africa’s proposed cross-border crypto rules is spreading beyond the industry’s exchanges, with digital bank GoTyme joining a coalition that argues the draft would shut businesses out of stablecoin payments.

More than 200 organisations and nearly 6 300 individuals have signed up to Catastrophe, a coalition of crypto businesses and supporters campaigning for changes to proposed rules that would restrict cross-border crypto transactions.

A separate DearSA campaign has recorded nearly 2 900 responses to the draft Crypto Asset Manual, published for comment in August. The public has until Wednesday, 30 September, to comment.

Local bank GoTyme is one of the signatories, as are virtually all crypto exchanges and numerous crypto asset service providers (Casps), including VALR, Luno, AltcoinTrader, EasyEquities, Money Badger, Africa Bitcoin Corporation, Novaque and Altify.

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The Draft Crypto Asset Manual proposes preventing businesses from using stablecoins for cross-border transactions, thereby forcing them to use more expensive and slower foreign exchange channels operated mainly by banks.

It would also allow individuals to move crypto from a local regulated platform to a self-custody wallet, but restrict moving it back. This creates the potentially bizarre situation where a South African based in Cape Town or Johannesburg moves crypto from a private self-custody wallet to a local exchange, yet this is treated as a cross-border inflow for regulatory purposes.

“GoTyme Bank has signed the Catastrophe coalition’s position on crypto asset regulation because we believe South Africa’s regulatory framework should apply consistent standards to equivalent financial activities, regardless of the technology used,” says GoTyme Bank in a statement.

“This is not a position on whether crypto should be regulated – it should be. It is a position on how: consistently, fairly, and aligned with regulatory purpose rather than technology labels.”

Proposed rules already delaying investment

Critics argue the proposed rules could have disastrous consequences for the development of the crypto sector in SA and drive investment and jobs offshore.

This is already happening, says VALR CEO Farzam Ehsani, who recently told Moneyweb that three proposed investments in South African crypto businesses, worth a combined R2.2 billion, had been put on hold. At the same time, investors awaited clarity on the rules.

“These are not theoretical,” he said. “I’ve been talking to the founders themselves, who are in direct conversations with those investors, who have said: ‘We are putting this on hold until we have clarity about what this means.’”

Carel de Jager, CEO of blockchain analytics firm Sixpence, told Moneyweb at its recent Money Summit that AI agents are beginning to transact online using stablecoins and private wallets and will eventually surpass humans in transaction volume.

He fears the proposed rules could exclude South Africa from that emerging market. “We [are] creating a framework or a regime where we basically cut off that part of the global economy entirely,” he said. “It’s so bad. It can be fatal for this country.”

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Crypto’s regulatory mismatch

Under the draft framework, local companies can hold and trade crypto domestically, but may not engage in crypto transactions that are deemed to be capital imports or exports.

That means a South African business could use traditional financial rails for a legitimate cross-border transaction but be prevented from undertaking an equivalent transaction through a regulated crypto asset service provider, says Catastrophe (which stands for Crypto Asset Taskforce for Advancing Sound, Technology-Neutral Regulation for Opportunity, Prosperity and a Healthy Economy).

“The activity should determine the regulation, not the technology used to perform it.

“If a transaction is lawful through one regulated financial channel, technology alone should not make the equivalent transaction unlawful through another.”

The SA Reserve Bank (Sarb) earlier told Moneyweb that the draft Crypto Asset Manual for Cross-Border Activities, as well as the draft Capital Flow Management Regulations, 2026, remain subject to refinement following the consideration of all public comments and stakeholder engagements.

“These are draft requirements, and National Treasury and the Sarb, in collaboration with other regulators, are still engaging on various aspects of crypto assets, including the approach to stablecoins. In addition, local and global developments continue to be closely monitored to inform our approach and regulatory response,” said the Sarb.

Listen/Read: SA crypto industry unites against new exchange controls

Ehsani points out that businesses dealing through the traditional forex system have a fallback option: where a licensed foreign exchange provider is unable to handle the payment because it falls outside that provider’s limited authority, the company can then use a bank with broader authority.

However, if it wants to make the same payment using stablecoins, the draft rules would not provide it with an equivalent route via a bank or another authorised crypto provider.

“The result is that two businesses trying to facilitate economically equivalent cross-border payments would face very different regulatory outcomes purely because one uses conventional banking rails and the other uses crypto rails,” said Ehsani on X.

“The restriction attaches to the technology rather than the underlying risk or economic activity.

“In essence, this bans crypto assets from being used as a cheaper, faster, and more transparent payment mechanism by all South African businesses.”

Catastrophe says it supports appropriate regulations, but that equivalent economic activity should receive equivalent regulatory treatment.

GoTyme Bank wants consistency in exchange control rules

In a statement, GoTyme Bank lays out its position on the proposed crypto rules:

• Inconsistent rules create perverse incentives. When regulators apply strict standards to banks but ambiguous standards to unregulated offshore platforms, you don’t eliminate crypto activity; they lose visibility, traceability, and the ability to embed consumer safeguards.
• Banks need regulatory clarity to compete. SA’s fintech future depends on banks’ ability to participate in the evolving payment infrastructure and settlement rails.
• This is about financial competitiveness, not just crypto. GoTyme’s signature reflects our interest in clear, consistent rules that allow all institutions to compete fairly and serve customers through innovative technology.

“GoTyme Bank supports crypto asset regulation being applied by consistent standards to all market participants. The principle is simple – equivalent activities should face equivalent requirements,” says the bank.

You can sign up with Catstrophe.co.za or make your comment known at DearSA.