| Key takeaways 1. Crypto assets have been legal and regulated in South Africa since 2022 as a financial product under the FAIS Act. 2. The FSCA had approved 310 CASP licences out of 533 applications as at 31 March 2026. 3. The SARB and the FSCA consider it unlikely that foreign-currency stablecoins will be authorised as a means of domestic payment (May 2026). 4. A 2026 draft brings crypto assets under capital flow controls: CASPs will need FinSurv authorisation to operate across borders. 5. The SARB has shelved a retail CBDC and is prioritising payments modernisation through PayShap. 6. Verified digital identity is the foundation for complying with the Travel Rule, capital flow controls and licensing. |
South Africa is one of the most active crypto markets in Africa. It is also one of the most regulated. In 2026, the South African Reserve Bank (SARB) and the Financial Sector Conduct Authority (FSCA) are putting the final pieces of the framework in place.
In this analysis we review what has changed, what is still open and what it means for exchanges, fintechs and banks.
Figure 1. Milestones in crypto regulation in South Africa, from 2018 to 2026.
How big is the crypto market in South Africa?
South Africa has almost 7.8 million registered users on its three largest crypto platforms and more than R25 billion in custody, according to the SARB.
The data comes from the SARB Financial Stability Review of November 2025. For the first time, the central bank included crypto assets and stablecoins in a new structural risk: technology-enabled financial innovation.
| Indicator | Value | Date |
| Assets in custody at Luno, VALR and Ovex | R25.3 billion | End of 2024 |
| Registered users on those three platforms | 7.8 million | July 2025 |
| Trading volume in US dollar stablecoins | Almost R80 billion | Year to Oct. 2025 |
| Same volume in 2022 | < R4 billion | 2022 |
| Monthly peak in rand stablecoins | R250 million | November 2023 |
| Bitcoin outflows from the 10 largest local wallets | R63 billion | Since January 2019 |
Table 1. The South African crypto market in figures. Source: SARB, Financial Stability Review, second edition 2025.
The most striking figure is the one for US dollar stablecoins: their volume has grown almost twentyfold since 2022. This is precisely what concerns the SARB.
“The South African financial system’s vulnerability will likely continue to increase until the existing gaps in the South African crypto asset regulatory framework have been closed.”
SARB. Financial Stability Review, November 2025, p. 33.
How is crypto regulated in South Africa?
South Africa regulates crypto assets on three fronts: FSCA licensing, AML obligations set by the FIC and, from 2026, SARB capital flow controls.
FSCA CASP licences
Since 19 October 2022, crypto assets have been a financial product under the FAIS Act. Any crypto asset service provider (CASP) needs an FSCA licence, a model comparable to MiCA licensing in Europe.
The process began on 1 June 2023. According to the FSCA update of 15 April 2026, as at 31 March 2026 the regulator had approved 310 licences out of 533 applications, with 17 declined and 124 withdrawn. It had also opened 81 investigations into unauthorised activity. Applications are mainly declined for failing to meet fit and proper requirements: insufficient operational capacity or competence.
Figure 2. Status of CASP licence applications to the FSCA as at 31 March 2026.
Travel Rule: identity travels with every transfer
The Financial Intelligence Centre (FIC) applies the Travel Rule through Directive 9, in force since 30 April 2025. CASPs must share originator and beneficiary data on every crypto transfer. From R5,000, more complete information is required. Below that amount, less information is required and it does not have to be verified. The approach is similar to VARA’s crypto regulation in the UAE.
There is no general ban on self-hosted wallets. Each CASP applies a risk-based approach. This tightening of AML rules was part of the effort that allowed South Africa to exit the FATF grey list on 24 October 2025.
Can stablecoins be used for payments in South Africa?
It is unlikely for stablecoins pegged to foreign currencies. The SARB and the FSCA consider it unlikely that they will authorise them as a means of domestic payment, given the risk of dollarisation.
On 28 May 2026, both regulators published a joint communication on crypto assets for payments. They made it clear that crypto assets and stablecoins are not money under the National Payment System Act. Nor are they legal tender.
Rand stablecoins remain an open question. The Intergovernmental Fintech Working Group (IFWG) is analysing them, with possible testing in its regulatory sandbox.
“[F]oreign currency-pegged stablecoins may result in the risk of currency substitution (‘dollarisation’), which would weaken the monetary policy transmission.”
SARB and FSCA. Joint communication of 28 May 2026.
What changes with the new capital flow controls for crypto?
The 2026 draft treats sending crypto abroad as a capital export. CASPs will need additional SARB authorisation and will have to report these transactions.
On 17 April 2026, the draft Capital Flow Management Regulations were published. They will replace the Exchange Control Regulations of 1961. On 3 August came the Crypto Asset Manual for cross-border transactions. The comment period closed on 30 September 2026. Both texts are drafts and may change before their final version.
Figure 3. How a cross-border crypto transfer would work under the 2026 drafts.
| CASP category | Activity | Limits |
| Category One | Person-to-person remittances | R5,000 per transaction per day; R25,000 per month |
| Category Two | Cross-border services between custodial and external wallets | Within each resident’s allowances |
| Category Three | Combines the activities of One and Two | Those of each category |
Table 2. CASP categories with FinSurv authorisation in the draft Crypto Asset Manual (August 2026).
For users, the draft sets these limits:
- Resident individuals can use their single discretionary allowance of R2 million a year and, in addition, a foreign capital allowance of up to R10 million, which requires SARS tax compliance status.
- Resident companies will not be able to move crypto assets out of the country through cross-border transactions, although they can hold crypto assets and trade them within the country.
- Sending crypto to one’s own wallet abroad also counts as a capital export.
On top of this comes CARF reporting to SARS, with a first reporting period from 1 March 2026 to 28 February 2027. The first return is due on 31 May 2027. The industry has responded with criticism.
“Luno believes that equivalent economic activity should attract equivalent regulatory treatment, irrespective of the underlying technology. The current draft falls short of this.”
Christo de Wit, South Africa country manager at Luno. Statement reported by TechCentral.
Will South Africa have a central bank digital currency?
Not in the short term. In November 2025 the SARB concluded that a retail CBDC is feasible but not needed at this time.
South Africa was a pioneer in testing blockchain in central banking with Project Khokha, launched in 2018 for wholesale payments and tokenised securities. But its position paper on a retail CBDC prioritises modernising the payment system with PayShap. We explain this in our analysis of the national payment system and PSP licences.
“[T]he compelling need is to modernise the payment system to give every South African fast, simple and secure digital payments.”
Rashad Cassim, Deputy Governor of the SARB. Speech of 9 June 2026.
Can crypto boost financial inclusion in South Africa?
Yes, in specific uses such as remittances and digital savings. But they only work if users trust that their identity and their funds are protected.
South Africa has the most developed banking sector on the continent. Even so, account ownership fell from 85.4% in 2021 to 81.1% in 2024, although it remains above the global average of 79%, according to the World Bank Global Findex 2025. We look at this in our article on digital transformation and inclusion in South Africa.
| Use | Opportunity | Regulatory requirement |
| Regional remittances (SADC) | Cheaper and faster transfers | Category One CASP and Travel Rule |
| Savings in digital assets | Access to investment without traditional banking | FSCA licence and KYC |
| Tokenised payments | Lower costs for small merchants | Rand stablecoins only, still under review |
Table 3. Crypto use cases for financial inclusion and how they fit the regulation. Compiled by Facephi.
Why is digital identity the underlying challenge?
Because every rule requires knowing who is behind each transaction: the Travel Rule, capital flow controls and FSCA licensing.
The fraud risk is real. In July 2025 the FSCA announced an investment of R200 million over 18 months to strengthen supervision, with a focus on the crypto sector. Deepfake investment scams and money mule accounts are two of the most frequently cited threats.
| Obligation | What it requires regarding identity | How it is addressed |
| FSCA licence | Robust customer due diligence processes | Digital onboarding with biometric verification |
| Travel Rule (FIC) | Verified originator and beneficiary data | Reliable, up-to-date KYC |
| Capital flow controls (SARB) | Knowing whether the customer is a resident, an individual or a company | Perpetual KYC (pKYC) and verified documentation |
| Fraud prevention | Detecting impersonation and third-party fronts | Detection of deepfakes and impersonation attacks |
Table 4. Regulatory obligations of a South African CASP and how they relate to digital identity.
We help exchanges and fintechs meet these requirements with KYC and identity verification solutions, digital onboarding with biometric verification and technology built for the crypto sector. You can review the full framework in our guide to regulatory compliance in South Africa.
Conclusion
South Africa has moved from observing crypto assets to integrating them into its financial system with clear rules. Licensing, the Travel Rule, limits on foreign stablecoins and capital flow controls form a demanding and coherent framework.
For the industry, the challenge is twofold. It must comply with several regulators at once and offer simple experiences to people who are not yet banked. Verified digital identity is the piece that connects both goals.
To go further, read our identity verification report for crypto asset providers.
Frequently asked questions about crypto in South Africa
Yes. It is legal and regulated. Since October 2022, crypto assets have been a financial product under the FAIS Act, and providers need an FSCA licence. They are not legal tender.
The SARB oversees financial stability, payments and capital flow controls. It considers it unlikely that foreign stablecoins will be authorised for domestic payments and is preparing to bring crypto assets under the Capital Flow Management Regulations.
As at 31 March 2026, the FSCA had approved 310 CASP licences out of a total of 533 applications.
It is the obligation for CASPs to share originator and beneficiary data on every crypto transfer. The FIC applies it through Directive 9, in force since 30 April 2025.
The SARB and the FSCA consider it unlikely that stablecoins pegged to foreign currencies will be authorised as a means of domestic payment. Rand stablecoins are under review by the IFWG.
Under the 2026 draft, up to R2 million a year with the single discretionary allowance and, in addition, up to R10 million with the foreign capital allowance, which requires SARS tax compliance status.
Not in the short term. In November 2025 the SARB concluded that a retail CBDC is not needed at this time and is prioritising PayShap.
An FSP licence from the FSCA, registration with the FIC, robust KYC and AML processes, compliance with the Travel Rule and, if it operates across borders, the future FinSurv authorisation.
