South Africa Cracks Down on Offshore Crypto Transfers
South Africa has proposed new rules to limit certain offshore transfers of cryptocurrencies and stablecoins. The draft crypto asset manual for offshore transactions, published by the South African Reserve Bank's (SARB) Financial Surveillance division, outlines a mix of outright bans and reporting requirements.
The consultation period runs until the end of September. Under the proposed rules, companies are banned from using cryptocurrencies or stablecoins for offshore receipts or payments, while inbound transfers from self-hosted wallets are prohibited entirely.
However, individuals can transfer crypto to or from abroad, subject to usual exchange control restrictions and reporting requirements. Licensed domestic crypto asset services providers (CASP) must report such transactions, which are classified as offshore exchanges even if intended for domestic usage.
The rules also impose limits on remittances using stablecoins, with a daily limit of R5,000 ($308) or monthly limit of R25,000 ($1,540). Asset transfers are subject to an annual discretionary limit of R2 million ($123,000), or R10 million for proven tax compliance.
The proposed rules come amidst changes in South Africa's foreign exchange controls, partly due to recent court cases involving cryptocurrency regulations. Last year, the SARB lost a case where a judge ruled that cryptocurrencies are not covered by South Africa's exchange control regulations because they are not 'currencies'. The Treasury is now taking steps to revise the regulations.