In brief
The 2026 Budget Speech signals a major shift in South Africa’s regulatory treatment of crypto assets, as draft regulations are expected to bring crypto assets formally within the exchange control framework based on statements made by the Minister of Finance. Once amended, cross‑border crypto transfers may require prior approval, exposing businesses to potential sanctions for non‑compliance. The change could materially impact intra‑group crypto asset flows, crypto‑based settlement models, deal execution and service providers facilitating offshore transfers that involve crypto assets. Organisations should begin mapping crypto touchpoints, reassessing contractual arrangements and preparing governance measures ahead of having to apply to the South African Reserve Bank (SARB) for exchange control approvals when offshoring crypto assets.
In more detail
During the Budget Speech on 25 February 2026, the Minister of Finance announced that draft regulations will shortly be published in terms of the Currency and Exchanges Act to “include crypto assets in our capital flow management regime”. This has been noted by many as a signal to market that the Exchange Control Regulations, 1961 will likely be amended so that crypto assets fall within South Africa’s exchange control framework, a significant step in the ongoing saga of whether crypto assets require regulatory approval for cross-border transfer.
The debate on this issue centres on the South African Exchange Control Regulations, which restrict the movement of currency and capital into and out of the country to maintain economic stability. Specifically, regulation 10(1)(c) provides that “capital” may not be transferred out of South Africa without SARB approval. The consequences of non-compliance with regulation 10(1)(c) may be severe, as the SARB is empowered to, amongst other powers, set transactions aside, block accounts, and impose administrative penalties linked to the amount of capital moved offshore. However, the meaning of “capital” has been the topic of several legal challenges, with courts typically taking a narrower approach than desired by the SARB.
Notably, the Minister’s announcement comes against the backdrop of the High Court’s decision in Standard Bank of South Africa v. South African Reserve Bank and Others (047643/2023) [2025] ZAGPPHC 481 (“Standard Bank”), where the Court held that novel assets, such as crypto assets, do not fall within the meaning of “capital” in regulation 10(1)(c) and crypto assets therefore do not fall into the exchange control framework. Although the decision in Standard Bank is subject to appeal, the present position is that cross‑border transfers of crypto assets do not, for now, trigger exchange control approval. But this regulatory gap may be quickly closing.
If crypto assets are brought into the same perimeter as other forms of capital regulated under the Exchange Control Regulations, the commercial impact could be material for businesses (and individuals) that move meaningful amounts of crypto across borders. In practice, this will translate into additional compliance steps before cross-border transfers of crypto assets can proceed, and the imposition of punitive sanctions where exchange control approval is not acquired in respect of such transfers.
For example, intra‑group cash management carried out through crypto assets may become subject to exchange control approval. The convenience and low cost of moving value between South African and offshore group entities using crypto rails could be replaced by an approvals‑driven process. Similarly, payment models that rely on stablecoins or crypto‑based settlement mechanisms may need to be redesigned to accommodate exchange control requirements, including how and when cross‑border transfers occur.
From a deal perspective, transactions that involve moving crypto assets or token‑based instruments across borders will have to factor exchange control approvals into their timelines and closing mechanics, which can add friction and cost to cross‑border execution.
Finally, crypto asset service providers and other financial services players that facilitate cross‑border crypto transfers — typically on behalf of clients — will need exchange control permission for those flows, depending on how the amendments are drafted.
These outcomes are still speculative, as the Minister of Finance did not provide further context of how the country's capital flow management regime will be developed to accommodate crypto assets or when this will occur. However, given similar scenarios in the past, such as in 2011's Oilwell (Pty) Ltd v. Protec International Ltd and Others, where the question was where intellectual property fell into regulation 10(1)(c) or not, it seems likely that an amendment to explicitly bring crypto assets under the Exchange Control Regime is possible.
There are practical steps that participants in the crypto transfer chain can take ahead of the exchange control reform, for example:
- Mapping key crypto touchpoints and documenting cross-border flows, to quickly identify which transactions are likely to be caught once the regulatory perimeter tightens.
- Engaging proactively with banks and key vendors to understand what information, supporting documents and controls they are likely to require when exchange control begins to apply to crypto transfers.
- Reviewing and refreshing contracts and deal documents to allocate regulatory change risk, including cooperation, disclosure and appropriate protections where the contractual relationship includes the cross-border transfer of crypto assets.
- Implementing monitoring and contingency plans to respond quickly when the draft regulations are published and the compliance picture becomes clearer.
Even though these amendments may be inevitable, they may leave a deeper legal question unanswered around the tension between crypto assets and any notion of territoriality. Crypto assets do not fit neatly into the traditional idea of exchange control as crypto transfers are not “territorial” in the same way as fiat payments. The underlying systems are often wholly decentralised and operate globally and independent of any single location by design. The move to bring crypto into South Africa’s exchange control regime is accordingly best understood as part of government’s wider effort to regulate crypto assets, and to align cross‑border crypto value movement with existing anti‑money laundering and anti‑fraud measures.
For now, it remains possible to transfer crypto assets outside South Africa without exchange control approval, but this window will, in all likelihood, soon be shut. Businesses operating in this gap should start preparing for a world where exchange control permission may be required — by tightening governance, stress‑testing operating models, and ensuring they can produce the documentation and audit trail needed to comply and to avoid the severe sanctions that can follow non‑compliance.
*****
Gabriel Rybko, Associate, and Despina Lazanakis, Trainee Solicitor, have contributed to this legal update.