South Africa Clarifies Crypto Regulations, Boosts Industry Growth

In 2025, South Africa is making significant strides in the cryptocurrency landscape, with new regulations providing clarity and integrating cryptocurrency into various financial transactions, including real estate. The country's approach to crypto regulations balances innovation with security, prioritizing investor protection. These new rules and regulations position South Africa to emerge as a leader in the crypto space on the African continent.

On May 15, 2025, the Pretoria High Court delivered a landmark judgment in the case of Standard Bank of South Africa vs. the South African Reserve Bank. The court ruled that cryptocurrencies do not constitute “capital” under the Exchange Control Regulations of 1961. This ruling offers long-awaited clarity for the crypto industry, as crypto assets are no longer subject to the country's strict exchange control regime.

On May 6, 2025, Directive 9 for Crypto Asset Service Providers (CASPs) and the Travel Rule was issued. This directive covers all CASPs acting as originators, beneficiaries, or intermediaries in crypto-to-fiat exchanges, wallet custody services, crypto asset transfers, and the provision of crypto-related financial services. CASPs are required to implement travel rules in line with the Financial Action Task Force (FATF) recommendations. Non-compliance can result in administrative sanctions under Section 45C of the Act.

On April 30, 2025, the Financial Intelligence Centre (FIC) mandated the travel rule for transactions exceeding ZAR 25,000 (approximately US$1,500). This rule requires CASPs to collect information about the sender and the receiver, including names, account numbers, and identification details, to promote transparency and reduce risks. This aligns with the FATF Recommendations aimed at complying with anti-money laundering rules.

The South African government does not consider crypto as a legal tender but is actively regulating the industry and recognizing it as a financial product. The government's primary approach in 2025 has been to integrate crypto assets into existing financial frameworks rather than creating new legislation for digital assets. The government's current priorities include evolving the crypto landscape, enhancing the anti-money laundering compliance framework, integrating international standards into the country’s national system, and fostering a secure environment for crypto regulations.

Cryptocurrencies are taxable in South Africa. The South African Revenue Service (SARS) treats cryptocurrencies as “assets of intangible nature,” subjecting them to capital gains tax and income tax. All crypto losses and gains must be annually reported; non-compliance can lead to penalties imposed by SARS. The tax rates vary depending on the type of transaction, with long-term investments subject to capital gains tax up to 18% on 40% of the gain, frequent trading or business income taxed at marginal rates of 18%-45%, and corporate gains taxed at 27% on 80% of gains. Mining, staking, airdrops, and DeFi activities are also subject to income tax at rates of 18%-45%, with guidelines still evolving. Buying, holding, or transferring crypto is not taxable.

Crypto Asset Service Providers (CASPs) operating in South Africa are required to obtain a Financial Services Provider (FSP) license from the Financial Sector Conduct Authority (FSCA). Crypto assets were considered financial products by the FSCA in 2019, making licensing mandatory. CASPs must also register as “accountable institutions” with the Financial Intelligence Centre (FIC) under the Financial Intelligence Centre Act (FICA). The licensing process involves demonstrating compliance with regulations related to anti-money laundering (AML) and countering the financing of terrorism (CFT), requiring strict adherence to the Travel Rule.

In 2025, the South African government demonstrated its support for blockchain and cryptocurrency through a complex regulatory framework. While the country does not consider crypto as a legal tender, it has legalized the trading of crypto as a legal financial product. The crypto regulatory agencies, such as the South African Reserve Bank (SARB) and the FSCA, are moving towards a robust regulatory framework to create an enhanced crypto landscape.