The proposed Capital Flow Management Regulations in South Africa are set to overhaul the country's financial control system, with a focus on cryptocurrency transactions. According to the draft regulations, residents who hold digital assets above an unspecified threshold would be subject to strict new conditions, including prior permission for buying, selling, lending, or transferring assets.
The regulations also introduce a requirement for declared purposes for transactions, and any spending outside of this purpose could trigger a mandatory resale of assets into rand. Cross-border crypto transfers and payments would require regulatory approval, with unauthorized transactions facing outright bans.
Authorities would gain powers to search individuals and demand asset declarations, with the ability to seize assets suspected of breaching the new rules. Critics have responded sharply to the draft, arguing it raises serious constitutional issues around privacy, property rights, and freedom of association.