South Africa plans new rules to stop crypto from being used to evade currency controls

Quick Take

  • South Africa’s central bank is planning to bring in new rules to stop cryptocurrencies from being used to evade currency controls
  • The new rules are expected to be put in place in Q1 2020
  • Just two weeks ago, South Africa’s First National Bank said it will stop serving cryptocurrency exchanges, including Luno, ICE3X, and VALR

The South African Reserve Bank (SARB), the country’s central bank, is planning to introduce new rules to stop cryptocurrencies from being used to evade currency controls.

SARB deputy governor Kuben Naidoo has reportedly said that the new rules would be put in place in Q1 2020. With these rules, the central bank would put restrictions on how much local currency (rand) can be sent outside South Africa.

At present, South Africans are limited to sending a total of 11 million rand (~$750,570) across the border - 1 million rand (~$68,225) without declaration and 10 million rand (~$682,285) with a special application to the South African Revenue Service. 

This leaves cryptocurrency as the most popular method of sending money anywhere in the world, but the central bank’s plan to enact restrictions is “far reaching and alarming,” said SA Crypto, South Africa’s blockchain community, adding:

“Conservative regulations would not only hinder innovation in South Africa, but repel investment into the country.”

Local banks too?

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