{"id":650857,"date":"2026-05-29T12:04:51","date_gmt":"2026-05-29T10:04:51","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=650857"},"modified":"2026-05-29T12:05:25","modified_gmt":"2026-05-29T10:05:25","slug":"bitcoin-and-stablecoins-are-not-money-in-south-africa","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/cryptocurrency\/650857-bitcoin-and-stablecoins-are-not-money-in-south-africa.html","title":{"rendered":"Bitcoin and stablecoins are not money in South Africa"},"content":{"rendered":"\n

The South African Reserve Bank and Financial Sector Conduct Authority (FSCA) have clarified that crypto assets used for domestic payments are not money, funds, or legal tender.<\/p>\n\n\n\n

The position was set out in a joint communication published on Thursday, 28 May 2026,  which dealt with crypto assets used to pay for goods and services in South Africa.<\/p>\n\n\n\n

It was signed by Arif Ismail, the head of the National Payment System department in the South African Reserve Bank (SARB), and Katherine Gibson, deputy commissioner of the FSCA.<\/p>\n\n\n\n

The communication applies to domestic crypto payments, including person-to-person, person-to-business, and business-to-business transactions. It does not apply to cross-border payments.<\/p>\n\n\n\n

The regulators said that crypto assets currently fall outside the National Payment System Act (NPS Act), even when used in transactions that resemble payments.<\/p>\n\n\n\n

That is good news for crypto asset service providers (CASPs), which do not need to be separately licensed to facilitate transactions using cryptocurrencies and stablecoins.<\/p>\n\n\n\n

The FSCA declared crypto assets to be financial products under the Financial Advisory and Intermediary Services Act (FAIS Act) in October 2022.<\/p>\n\n\n\n

That declaration brought advice and intermediary services related to crypto assets under South Africa\u2019s financial services licensing framework.<\/p>\n\n\n\n

As long as a provider has the relevant CASP licence or exemption from the FSCA, they can offer crypto payment services. Person-to-person transactions do not require a licence.<\/p>\n\n\n\n

\u201cPeer-to-peer transactions, direct exchanges of crypto assets between individuals that rely only on decentralised protocols, imply that no intermediation or advice is provided,\u201d the regulators stated.<\/p>\n\n\n\n

\u201cAs a result, there is currently no obligation for any party involved in that decentralised transaction to be authorised as an FSP.\u201d<\/p>\n\n\n\n

In effect, from a FAIS Act perspective, this is equivalent to a payer and payee transacting in cash, where no third party is needed to facilitate payment.<\/p>\n\n\n\n

However, this does mean that paying a merchant with Bitcoin or another crypto asset is not treated as a payment under South Africa\u2019s payment system law.<\/p>\n\n\n\n

Crypto is not money in South Africa<\/h2>\n\n\n\n
\"\"
Katherine Gibson, deputy commissioner of the FSCA<\/figcaption><\/figure>\n\n\n\n

The two regulators explained that the National Payment System Act deals with systems that enable payments or facilitate the circulation of money.<\/p>\n\n\n\n

They said crypto assets do not meet that interpretation because they are not money under the Act and are not treated as funds.<\/p>\n\n\n\n

The regulators also said crypto assets do not have legal tender status in South Africa. \u201cThis is in line with international best practice and should support monetary stability,\u201d they said.<\/p>\n\n\n\n

\u201cFurthermore, unbacked crypto assets, like Bitcoin, are not well-suited to perform the function of money and they are not recognised as legal tender in the SARB Act.\u201d<\/p>\n\n\n\n

The regulators argued that Bitcoin was not well-suited to function as a unit of account, means of exchange, or store of value.<\/p>\n\n\n\n

\u201cUnbacked crypto assets lack supporting assets, resulting in highly volatile prices. As a result, they are generally not well-suited to perform the main functions of money,\u201d the regulators said.<\/p>\n\n\n\n

\u201cInstead, these crypto assets are mostly held by investors hoping prices will rise. Therefore, the SARB is unlikely to consider regulating unbacked crypto assets as payment instruments.\u201d<\/p>\n\n\n\n

However, the regulators also later acknowledged that crypto assets are not purely speculative and could change utility in the hands of a financial customer.<\/p>\n\n\n\n

\u201cFor example, crypto assets may initially serve as an investment vehicle and later be used to purchase items in retail stores,\u201d they said.<\/p>\n\n\n\n

\u201cIn other words, crypto assets can function as investments, provide access to services, or be used as payments.\u201d<\/p>\n\n\n\n

Stablecoins could be treated differently<\/h2>\n\n\n\n
\"\"<\/figure>\n\n\n\n

Stablecoins, even when backed with fiat currencies that do fulfil these functions, also do not enjoy legal tender status in South Africa.<\/p>\n\n\n\n

However, the regulators took a more open position on these crypto assets, particularly those pegged to the rand and backed by appropriate reserve assets.<\/p>\n\n\n\n

They said that the Intergovernmental Fintech Working Group (IFWG) was analysing rand-pegged stablecoin use cases to inform future policy and regulatory responses.<\/p>\n\n\n\n

The Reserve Bank also said it was interested in testing domestic stablecoin payment use cases in the IFWG Regulatory Sandbox.<\/p>\n\n\n\n

However, it warned that foreign currency\u2013pegged stablecoins could create currency substitution risks and weaken monetary policy transmission.<\/p>\n\n\n\n

The Reserve Bank also highlighted its concerns that crypto assets posed a risk to the National Payments System.<\/p>\n\n\n\n

\u201cShould crypto assets gain widespread adoption, the NPS could be bypassed in favour of an alternative payment system,\u201d it said.<\/p>\n\n\n\n

South Africa\u2019s central bank also argued that many crypto assets lack interoperability and central clearing, meaning users may need to register with multiple CASPs to transact with their tokens.<\/p>\n\n\n\n

It also said that the adoption of cryptocurrencies, and crypto payments in particular, posed a threat to South Africa\u2019s financial stability.<\/p>\n\n\n\n

\u201cThe expanding use of crypto assets and large build-up of exposures or links to regulated financial institutions and the broader economy may pose risks to the stability of the financial system.<\/p>\n\n\n\n

The planned revision of the National Payment System Act could give the Reserve Bank powers to declare and regulate payment instruments other than money.<\/p>\n\n\n\n

That could allow the Bank to regulate crypto assets as domestic payment instruments in future, but only if a compelling case arises.<\/p>\n","protected":false},"excerpt":{"rendered":"

The FSCA and SARB have clarified the legal status of cryptocurrency and stablecoin payments in South Africa.<\/p>\n","protected":false},"author":15,"featured_media":650860,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44696],"tags":[49711,67755,105599,101311,23511],"class_list":["post-650857","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-arif-ismail","tag-financial-sector-conduct-authority-fsca","tag-katherine-gibson","tag-national-payment-system-nps","tag-south-african-reserve-bank-sarb"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/650857"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=650857"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/650857\/revisions"}],"predecessor-version":[{"id":650869,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/650857\/revisions\/650869"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/650860"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=650857"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=650857"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=650857"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}