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Key Takeaways
- Luno says the draft bans all South African companies from cross-border crypto transfers, including stablecoins, while individuals would get allowances.
- The exchange argues market makers, exporters paid in stablecoins and firms operating elsewhere in Africa would be hit hardest.
- The manual is still a draft, the Reserve Bank has not responded, and the claims reflect Luno’s reading of the text.
South African crypto exchange Luno has told the country’s central bank that draft rules for moving crypto across the border could raise costs for consumers, restrict local businesses and push activity into unregulated channels. The exchange made the argument in a formal submission to the South African Reserve Bank on the proposed Crypto Asset Manual, which is still a draft.
A Draft Manual Under Consultation
The Reserve Bank’s proposed manual would set exchange control rules for crypto assets. The document is a draft, and Luno described it as a starting point rather than a final position. The Reserve Bank has not published a response to the submission, and no date for final rules was given in the material reviewed.
Luno said it shares the goals of the Reserve Bank and National Treasury, including a modern system with a sharp focus on reporting higher-risk flows. Marius Reitz, the exchange’s general manager for Africa, said the submission is meant to help the final rules deliver on that aim.
“We regard the draft manual as a starting point rather than a final position.”
Luno said the draft gets one important element right. Under it, buying and holding crypto on a locally licensed platform counts as a domestic activity, and only moving crypto offshore or off a platform counts as cross-border.
The Ban on Corporate Cross-Border Transfers
Luno’s main objection concerns companies. According to the exchange, the draft bans all South African companies from moving crypto across the border in any direction. Individuals would receive allowances, but companies would get no threshold, no exception and no way to apply.
That would include stablecoins, which companies can use to settle payments and make intercompany transfers faster and more cheaply than through correspondent banks. Luno said the provision is out of step with how companies already invest and trade abroad through their banks. It also argued the provision contradicts the “positive bias” approach described in the national Budget Speech earlier this year.
These are Luno’s readings of the draft. The text of the manual was not reviewed for this article.
Market Makers and Exporters Among the Affected
Luno said the effects would reach beyond crypto firms. Market makers, which keep local crypto prices in line with global prices, are almost exclusively companies, according to the exchange. Without them, it said, trading would thin out and South Africans would pay more to buy and hold crypto. Lower volumes could then reduce the local industry’s sustainability, future innovation and tax revenue.
The exchange also said legitimate business would be blocked. South African exporters paid in stablecoins would be unable to receive payment lawfully, and companies operating elsewhere in Africa would lose a practical route to bring earnings home. Luno noted that the UAE, Singapore, the UK and the EU all include companies in their crypto frameworks and said South Africa risks falling behind as a result.
One-Way Rules and Inconsistent Treatment
Luno raised several further concerns. Under the draft, crypto can leave a South African platform but can never return, even from a customer’s own private wallet, which the exchange said could push assets offshore. FNB, one of the country’s largest banks, cited exchange control compliance last week when it launched a crypto service in which assets cannot be transferred in or out.
Luno also said the draft would treat all stablecoin payments as capital flows, while the same invoice paid in U.S. dollars through a bank would be treated differently. It argued that treating payments differently based on the instrument used raises questions about consistency with South Africa’s International Monetary Fund commitments and the Reserve Bank’s own methodology.
The exchange traced those problems to what it called a foundational error: treating all crypto assets alike based on their form rather than their function. The draft puts Bitcoin, stablecoins, and utility tokens under one set of rules, even though Luno said the Reserve Bank’s own research recognizes they differ. It also called the proposed transaction limits too low for real-world remittances.
