South Africa's Crypto Sector Warns Against Overly Restrictive Cross-Border Payment Rules

A coalition of South African crypto businesses and advocates has launched a campaign to prevent what they see as overly restrictive draft regulations on cross-border payments. The CATASTROPHE (Crypto Asset Taskforce for Advancing Sound, Technology-Neutral Regulation for Opportunity, Prosperity and a Healthy Economy) coalition is made up of regulated Crypto Asset Service Providers (CASPs), institutions, tech startups, law firms, and individuals.

The proposed regulations, published by the National Treasury and South African Reserve Bank (SARB), would block cross-border crypto payments by businesses and restrict individual self-custody. This would put local businesses at a competitive disadvantage globally and force legitimate activity to go underground or overseas.

According to CATASTROPHE, thousands of jobs in South Africa could be threatened, millions of crypto holders would be adversely impacted, and billions of tax revenues to SARS could disappear if the draft regulations are implemented as currently drafted. The coalition emphasizes that regulating equivalent cross-border economic activity consistently is a more reasonable approach.

SARB Governor Lesetja Kganyago has stated that similar payment activities should be subject to similar regulatory expectations, whether performed by a bank or a fintech. CATASTROPHE calls for a level playing field for cross-border payments without discriminating against any particular technology, promoting competition, innovation, and choice.