South Africa plans to restrict cross-border transactions of corporate crypto assets, VALR warns it may weaken regulatory oversight

The South African National Treasury and the South African Reserve Bank (SARB) have released a draft regulation for cross-border transfers of crypto assets. Farzam Ehsani, co-founder and CEO of the crypto asset trading platform VALR, stated that unless key terms are significantly modified, the relevant framework could harm the domestic digital asset industry and drive funds overseas.

The draft allows individual residents to transfer crypto assets abroad within the existing foreign exchange limits but restricts companies from engaging in cross-border crypto asset transactions and categorizes some deposits from private non-custodial wallets as unacceptable transfers for local crypto asset service providers (CASP). Ehsani believes this could prompt businesses and retail investors to turn to overseas platforms.

Ehsani pointed out that prohibiting regulated entities from processing legitimate business transactions, especially cross-border stablecoin payments, could push transactions underground or abroad, thereby undermining the visibility and monitoring capabilities that regulators hope to achieve. The South African National Treasury and SARB have opened a public consultation, with the feedback deadline set for September 30.