South African lawmakers propose draft rules on cross-border crypto transactions

South Africa’s Treasury and central bank are moving towards regulating the use of cryptocurrency for cross-border transactions.

The National Treasury and the South African Reserve Bank (SARB) released a draft rulebook on Monday that proposes that sending crypto offshore must be conducted through an authorized provider and reported to the central bank’s Financial Surveillance Department (FinSurv).

“The proposed regulatory measures seek to minimize the risk of regulatory arbitrage between regulated entities conducting cross-border activities, and to enhance the ability of the Financial Surveillance Department (FinSurv) to detect, deter and disrupt illicit financial flows,” Treasury and the Reserve Bank said in a joint statement.

The framework would not make crypto legal tender, nor do the rules distinguish between different digital assets.

The two bodies have invited comments from interested parties with a deadline for submission of Sept. 30.

The proposed rules build on previous National Treasury draft regulations issued in April, which would require crypto holders to declare assets above a certain threshold and hand over private keys to enforcement officers on demand.