This article was first published by News24/CityPress on 8 July 2025
Since 2021, South Africa’s financial authorities – led by the South African Reserve Bank (SARB), in partnership with the Financial Sector Conduct Authority and National Treasury – have been developing a phased regulatory framework for crypto-assets. This process has involved classifying crypto-assets as financial products under the Financial Advisory and Intermediary Services Act (FISA) and bringing service providers under the Financial Intelligence Centre Act (FICA). Its intention is to provide greater oversight and legal certainty in a rapidly evolving sector. While this certainty is welcome, it risks turning into overreach when regulation begins to run ahead of the law. Legal certainty is undoubtedly important, but it must be rooted in clear legislation rather than regulatory discretion.
In May 2025, the Pretoria High Court ruled in favour of Standard Bank in a case involving the SARB’s attempt to freeze funds linked to crypto-asset transactions. SARB had argued that the transactions constituted cross-border capital movement and, thus, fell within the scope of existing exchange control regulations. The court disagreed with this view and held that, under current law, crypto assets are neither “money” nor “capital,” and that the SARB had acted beyond its legal authority. Although the case is under appeal, the judgment highlights a deeper issue in that crypto assets remain undefined in South African law, and that regulators have begun making assumptions about their powers that Parliament has not yet granted.
This is not a new concern. Since launching its Liberty First policy initiative in January 2025, the Free Market Foundation (FMF) has long warned that an unclear legal environment, combined with discretionary enforcement, would undermine both market innovation and legal certainty. We argued then – and continue to argue – that Bitcoin and similar decentralised assets should not be treated as threats to the financial system, but rather important tools for long-term monetary resilience.
South Africa’s public debt is projected to rise to 75.5% of its GDP in 2025/26, amounting to more than R6 trillion. Against this backdrop, of mounting fiscal risk, the FMF has proposed that the SARB and National Treasury should consider holding a strategic Bitcoin reserve as part of a broader sound money strategy. The primary reason for this is that Bitcoin, unlike fiat currency, cannot be debased through inflation. Its decentralised structure and fixed supply make it a credible hedge against fiscal irresponsibility and a weakening rand.
That said, South Africa is not without advantages. It has deep capital markets, a well-developed financial sector, and the capacity to lead on digital financial innovation in the Southern African region. Yet despite these strengths, its regulatory posture has remained cautious and reactive when it comes to crypto assets. Other countries, meanwhile, have been more proactive. Nigeria ranks among the global leaders in Bitcoin adoption despite ongoing regulatory hostility. El Salvador, despite its size, has gone further by declaring Bitcoin legal tender and using it to signal openness to new financial and technological models.
The opportunity is there. But to take it, South Africa must shift its mindset from managing risk through restriction to managing it through clear rules, open engagement, and respect for voluntary exchange.
The FMF supports clear and practical legal definitions for crypto assets. However, we remain concerned that current regulatory developments could pave the way for excessive state control. Treating crypto as “capital” for the purposes of exchange control, for instance, would entrench outdated frameworks that limit economic freedom and discourage investment. Heavy compliance costs imposed on emerging crypto businesses would protect established financial institutions and reduce competition.
There is also a broader context to consider. Much of the state’s energy appears focused on developing a central bank digital currency (CBDC). While a digital rand could, in theory, offer certain efficiencies, it remains a centrally issued instrument that raises serious questions around privacy, autonomy, and monetary freedom. This reality only underscores the importance of ensuring that regulation does not suppress decentralised alternatives in favour of a state-controlled model.
Sound money is a cornerstone of economic freedom. It provides individuals with the ability to save, invest, and plan without the constant erosion of value. Bitcoin and similar digital assets offer individuals more control over their financial lives. Their rise is not a threat to stability, but a reaction to the instability that excessive centralisation often creates.
Now is the time for a measured, principle-based approach. Policymakers should provide a legal framework that protects against fraud and abuse, while leaving space for innovation and voluntary exchange. They should not use the uncertainty surrounding digital assets as an excuse to reassert outdated command-and-control instincts.
The choices we make now will shape South Africa’s role in the future of finance. We can either lead by example or fall behind. But whichever path we take, we must be clear on the stakes. Economic freedom depends on more than what we earn or own. It also depends on the kind of money that we are free to use.
