A coalition representing South Africa's regulated cryptocurrency industry is urging National Treasury and the South African Reserve Bank (SARB) to reconsider newly proposed cross-border regulations before they are finalised, warning that the measures would harm domestic businesses and jobs, slow economic participation, and isolate the country from the global digital economy.

CATASTROPHE — the Crypto Asset Taskforce for Advancing Sound, Technology-Neutral Regulation for Opportunity, Prosperity and a Healthy Economy — has launched a national campaign to highlight what it describes as the unintended adverse consequences for South Africa if the draft rules become law.

In a press release, the coalition says it brings together many leading regulated Crypto Asset Service Providers (CASPs) and other organisations, including VALR, Luno, AltCoinTrader and EasyEquities, as well as professors, lawyers, economists, entrepreneurs and many other members of the public.

Two Critical Issues in the Draft Regulations

The draft framework, published by South Africa's National Treasury and the SARB, introduces two major restrictions.

Blocking cross-border crypto payments by businesses: South African companies would be prohibited from using regulated crypto rails for otherwise legitimate international transactions, putting local businesses at a severe competitive disadvantage globally.

Restricting individual self-custody: While individuals can withdraw assets from a local CASP to a personal self-hosted wallet, transferring those assets back into a regulated South African platform would be designated as “non-permissible”. According to the coalition, this creates an arbitrary one-way door out of the domestic regulated ecosystem and would force legitimate activity underground or overseas.

According to the CATASTROPHE website, thousands of jobs in South Africa would be threatened, millions of South African crypto holders would be adversely impacted, and billions in tax revenue to the South African Revenue Service (SARS) could disappear if the draft regulations are implemented as currently drafted.

An Alternative: Technology-Neutral, Equivalent Treatment

As an alternative, CATASTROPHE proposes that South Africa regulate equivalent cross-border economic activity consistently. Banks, Authorised Dealers and Authorised Crypto Asset Service Providers may use different technologies, but equivalent activities should be subject to equivalent permissions, reporting obligations and regulatory outcomes.

The coalition points to remarks by SARB Governor Lesetja Kganyago at the MTN Group Fintech 2026 Summit:

“The principle is straightforward: similar payment activities should be subject to similar regulatory expectations, whether they are performed by a bank or a fintech.”

CATASTROPHE emphasises that failing to apply the same principle to cross-border payments would represent a departure from sound, technology-neutral regulation, and would be inconsistent with the principle articulated by the Governor himself.

In essence, the coalition calls for a level playing field for cross-border payments without discriminating against any particular technology. Regulation, it argues, should be fair and designed in the interests of South African consumers and businesses, promoting competition, innovation and choice.

Disconnect From Global Financial Progress

The proposed regulations come at a time when stablecoins and digital asset rails are expanding rapidly worldwide, delivering faster transaction speeds, lower cross-border costs and greater transparency — benefits that would accrue to South African individuals and businesses.

Global financial institutions are making multi-billion-dollar investments in stablecoin infrastructure. Since last year, payment giant Stripe and global card network Mastercard have acquired stablecoin businesses for $1.1 billion and $1.8 billion respectively, and major blockchain settlement initiatives by Visa and global banks have also been announced.

While the rest of the world integrates modern digital payment rails, the current draft regulations threaten to prevent South African businesses and residents from benefiting from these global advances. According to the campaign, billions of rand in foreign investment into South Africa have already been put on hold pending the outcome of the draft regulations.

About CATASTROPHE

CATASTROPHE (Crypto Asset Taskforce for Advancing Sound, Technology-Neutral Regulation for Opportunity, Prosperity and a Healthy Economy) is a single-purpose coalition of South African regulated CASPs, institutions, tech startups, law firms and members of the public. Formed to advocate for balanced, risk-based capital flow rules, the coalition will dissolve once its objective of achieving a better regulatory outcome for South Africa has been accomplished.

Source: BitcoinKE