State seeks greater control over cryptocurrency, public participation essential

Solidarity has submitted comments on the National Treasury’s proposed regulations governing gold and cryptocurrency, as contained in the draft Capital Flow Management Regulations. The submission can be viewed here.

Among other provisions, the proposed regulations would require all cryptocurrency holdings to be declared to the state. Failure to do so, or where the state believes that cryptocurrency has been acquired through improper or unexplainable means, could result in criminal prosecution and the forfeiture of the assets concerned to the state.

According to Theuns du Buisson, economic researcher at the Solidarity Research Institute (SRI), this proposed expansion of state control over cryptocurrency is out of touch with the realities of the modern economy.

“Cryptocurrency has become an established component of many investment portfolios and is increasingly used to facilitate fast and cost-effective international transactions. It makes little sense to place unnecessary obstacles in its way,” he said.

Du Buisson points out that South Africa already has extensive legislation in place to combat fraud, money laundering and other financial crimes.

“These proposed regulations create the impression that cryptocurrency is used primarily by criminals.

“In the process, the Treasury risks further undermining South Africa’s attractiveness as an investment destination in exchange for safeguards that are already provided for under existing legislation,” he said.

According to Du Buisson, the root of the problem lies in South Africa’s continued reliance on exchange controls and capital flow restrictions.

“Many potential investors look elsewhere because they have no assurance that they will be able to repatriate their returns from South Africa,” he said.

Du Buisson believes that the time has come for these controls to be fundamentally reviewed and ultimately abolished.

Solidarity encourages members of the public to participate in the public consultation process by submitting comments on the proposed regulations to the National Treasury before 30 June 2026. Comments can be emailed to commentdraftregulations@treasury.gov.za and commentdraftlegislation@treasury.gov.za.

“Policy changes with such far-reaching implications for investment, property rights and economic freedom should be subject to thorough public debate and scrutiny,” he concluded.