REGULATION | ‘Crypto is Not Money in South Africa,’ Say Reserve Bank (SARB) and the Financial Sector Conduct Authority (FSCA)

South African regulators have drawn a clear line between crypto assets and money declaring that Bitcoin and stablecoins are neither legal tender nor recognized forms of money under the country’s payments framework.

In a joint statement issued by the South African Reserve Bank (SARB) and the Financial Sector Conduct Authority (FSCA), authorities said crypto assets used for domestic transactions fall outside the scope of the National Payment System Act even when they are used to pay for goods and services.

The guidance covers

• person-to-person,
• person-to-business and
• business-to-business transactions

within South Africa, but excludes cross-border payments.

The clarification means crypto asset service providers do not require separate payments licenses to facilitate cryptocurrency transactions provided they hold the appropriate crypto-asset service provider authorization under existing financial services regulations.

Peer-to-peer transfers conducted directly through decentralized protocols also remain outside licensing requirements.

The regulators said crypto assets do not qualify as money or funds under South African law and therefore cannot be treated as payment instruments within the national payments system. They added that cryptocurrencies do not enjoy legal-tender status, a position they said aligns with international regulatory practice and supports monetary stability.

SARB and the FSCA were particularly critical of unbacked cryptocurrencies such as Bitcoin arguing that their price volatility limits their usefulness as a unit of account, medium of exchange, and store of value. The central bank has previously warned that crypto assets and stablecoins could pose risks to financial stability if adoption grows faster than regulation.

Stablecoins received a more nuanced assessment.

While regulators stressed that fiat-backed stablecoins also lack legal-tender status, they said authorities are studying the potential use of rand-backed stablecoins through the Intergovernmental Fintech Working Group. SARB has also expressed interest in testing domestic stablecoin payment applications through its regulatory sandbox.

At the same time, the central bank warned that foreign-currency stablecoins could encourage currency substitution and weaken monetary-policy transmission, echoing broader concerns among regulators globally about the growing role of dollar-backed digital assets.

The guidance comes as South Africa continues to expand its oversight of digital assets. Earlier this year, the government announced plans to bring cryptocurrencies under its cross-border capital flow framework, while regulators have repeatedly emphasized that crypto assets should be treated as financial products rather than currencies.

Stay tuned to BitKE for updates into crypto regulation in South Africa.

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