South Africa Crypto Industry Unites Against SARB Exchange Controls

What to know

• Leading South African crypto exchanges (VALR, Luno, AltCoinTrader) have formed the CATASTROPHE coalition to oppose draft exchange control rules.
• The SARB’s proposed rules would entirely prohibit resident businesses from conducting cross-border crypto transactions and place strict limits on individuals.
• The coalition argues the rules violate technology-neutral principles and will drive away foreign investment and local jobs.

South African crypto exchanges such as VALR, Luno, EasyEquities, and AltCoinTrader have formed the CATASTROPHE coalition to publicly oppose restrictive new cross-border exchange control rules proposed by the South African Reserve Bank (SARB) and National Treasury.

CATASTROPHE stands for Crypto Asset Taskforce for Advancing Sound, Technology-Neutral Regulation for Opportunity, Prosperity and a Healthy Economy. CATASTROPHE launched its petition on Wednesday, the 9th of September. 

As the September 30th deadline for public comment on the draft approaches, the coalition warns the industry of the impact of the Draft Crypto Asset Manual for Cross-Border Activities and the preceding Draft Capital Flow Management Regulations 2026.

The proposed rules, it says, will devastate the local digital economy, drive away foreign investment, and put domestic enterprises at a severe global disadvantage.

Understanding the Draft Rules and CATASTROPHE’s Position

The SARB’s stated objective with the draft manual is to bring crypto assets into South Africa’s broader capital flow management framework. The SARB says this will combat illicit financial activity and increase the Financial Surveillance Department’s (FinSurv) visibility over offshore wealth transfers.

To do so, the framework sets strict operational conditions for Authorised Crypto Asset Service Providers (CASPs). The coalition is pushing back against two provisions. First, the manual defines a specific “trigger point” for when a transaction becomes a cross-border transfer.

“The trigger point arises when crypto assets are transferred between a domestic Authorised CASP and an offshore CASP, or from a domestic Authorised CASP to a non-custodial wallet, resulting in a cross-border inflow or outflow that must be reported to FinSurv.” 

While the proposed framework imposes heavy oversight across the board, the practical implications vary significantly for retail users and corporate entities.

• Individuals: the draft allows individuals to transfer crypto abroad under existing exchange control allowances, including the Single Discretionary Allowance and the Foreign Capital Allowance.

A resident can move crypto from a licensed South African provider into a personal self-custody wallet. However, transferring those assets back into a regulated South African platform is impermissible. This creates a restrictive one-way door that CATASTROPHE believes shouldn’t exist. “Legitimate transfers should be possible in both directions, subject to appropriate safeguards.”

• Businesses: under the draft, businesses face a complete prohibition on utilising regulated crypto rails for cross-border transactions. Corporate entities cannot use digital assets for otherwise legitimate international trade, supplier settlements, or remittances, or cross-border transactions that would otherwise be entirely lawful through a bank. It effectively bans blockchain-based corporate finance.

CATASTROPHE says “legitimate business activity should not be prohibited simply because crypto assets are used as the settlement technology.”

The Innovation Bottleneck

A major point of contention within the draft manual is its failure to differentiate between volatile cryptocurrencies (like Bitcoin) and stablecoins. By treating all digital assets the same, the SARB is creating a major innovation bottleneck for companies trying to use blockchain technology for cheaper, real-time cross-border remittances.

Globally, stablecoins enable faster transactions and lower costs than the traditional banking system. As Luno recently warned, ignoring the utility of stablecoins for settlement purposes strips South African firms of a vital tool for competing in the global market.

The Industry’s Pushback

The CATASTROPHE coalition argues that the draft rules violate the very technology-neutral principles previously championed by SARB leadership.

At the recent MTN Group Fintech Summit, the SARB governor said, “Similar payment activities should be subject to similar regulatory expectations, whether they are performed by a bank or a fintech. If it walks and quacks like a duck, it is a duck, and it should be treated as one.” 

This is what the coalition is asking for. “Where activities and risks are economically equivalent,” CATASTROPHE argues, “the regulatory treatment should be equivalent too.”

Equivalent economic activities, the coalition proposes, should receive the same regulatory permissions, whether they use traditional banking infrastructure or blockchain technology.

According to prominent industry voices, including VALR’s leadership, they’re not seeking no oversight or regulation, but better regulation.

What’s Next for South African Crypto?

The coalition is calling on all South African individuals, entrepreneurs, and institutions to endorse their campaign at catastrophe.co.za before the public comment period closes on September 30, 2026. At the time of publication, they’d received signatures from over 100 organisations and nearly 2000 individuals.  A figure that’s still rising. 

If the Treasury and SARB proceed with the manual in its current form, the domestic ecosystem risks having billions of rand in foreign investment suspended.

South African businesses will be effectively cut off from using crypto as a legitimate cross-border payment rail, forcing them back to slower, traditional banking methods and causing a massive step backwards for the local fintech sector

Rather than establishing secure oversight, these capital exchange controls may ultimately push legitimate financial activity completely underground or offshore, leaving South Africa’s digital economy isolated from global progress.

CATASTROPHE says it has been created “to help South Africa achieve sound, technology-neutral regulation that protects the public interest while enabling opportunity, prosperity and a healthy economy.” It clarifies that it will cease to exist once it achieves that objective.