Luno challenges South Africa's draft crypto rules over IMF consistency concerns

Luno, a major cryptocurrency exchange, has criticized draft regulations proposed by South Africa’s National Treasury and the South African Reserve Bank (SARB). The company argues that the rules treat stablecoin payments inconsistently with the country’s international commitments, particularly those made to the International Monetary Fund (IMF). Under the draft, stablecoin payments would be classified as capital flows rather than current flows, unlike traditional currency transactions. Luno contends this inconsistency raises questions about compliance with IMF obligations and the SARB’s own methodologies.

The exchange also highlights what it calls a foundational error in the regulation: treating all crypto assets, bitcoin, stablecoins, and utility tokens, under the same framework. Luno advocates for distinct regulatory approaches, suggesting bitcoin be treated as a commodity, stablecoins as payment instruments, and utility tokens as infrastructure tools. This argument aligns with Luno’s earlier submissions, including one filed before the public comment period closed on September 30.

Luno supports the coalition of South African crypto firms, which opposes the draft’s ban on companies moving crypto across borders and the self-custody rule that prevents crypto from returning to local platforms. The exchange argues these restrictions would push assets offshore, thin trading volumes, and raise costs for buyers. Luno credits the draft for treating domestic crypto holdings on licensed platforms as local transactions, a point it had previously advocated for.

The SARB has acknowledged that the draft manual is still being refined and that its approach to stablecoins is under review. Luno’s General Manager for Africa, Marius Reitz, stated that the company is committed to engaging further with regulators to ensure South Africa does not fall behind in crypto regulation.