National Treasury and the South African Reserve Bank’s (SARB’s) updated statement on the Draft Capital Flow Management Regulations has moved South Africa’s crypto regulation debate into a more practical phase, says Bitexen CEO, Mark Diuga.
Extending the public comment deadline to 30 June 2026 gives industry participants more time to engage with the draft regulations. Just as importantly, Treasury and SARB have clarified that the draft regulations are not intended to criminalise the possession of crypto assets or apply retrospectively. A proposed cross-border crypto asset framework, in the form of a draft manual, is also expected to be released for public comment, providing more detail on what will constitute a cross-border crypto asset transaction and on the obligations that will apply to authorised crypto asset service providers.
“The updated statement is constructive because it moves the discussion away from fear about crypto ownership and towards the practical work of defining lawful cross-border activity, reporting obligations, and the role of licensed service providers,” says Diuga says, adding that clear regulation helps build consumer confidence, supports institutional participation, and gives compliant operators a more predictable environment in which to invest and build.
Having operated across multiple jurisdictions and regulated environments, Diuga says Bitexen has seen that regulation is most effective when it recognises how digital assets actually work. That is particularly important in South Africa, where the country’s regulatory direction is one of the reasons Bitexen entered the market. That distinction separates the possession of crypto assets from the financial integrity risks that can arise when value moves across borders.
Crypto assets do not always fit neatly into categories built for traditional financial infrastructure. In the conventional system, assets are usually understood as being held locally through regulated institutions or offshore through foreign intermediaries. Blockchain introduces another state: self-custody.
Self-custody means an individual holds and controls digital assets directly, rather than relying on a centralised custodian. It should not automatically be treated as hidden offshore activity. At the same time, self-custody does not eliminate the need for appropriate oversight when transactions raise legitimate concerns about financial integrity.
“Self-custody is a foundational feature of digital assets,” says Diuga. “The challenge is to build practical, risk-based regulation that distinguishes between lawful self-custody, regulated local custody, offshore financial activity, and genuinely suspicious or illicit flows.”
Treasury’s statement makes this distinction more important, not less. The forthcoming draft manual can give the market practical clarity on cross-border crypto asset activity while also recognising that blockchain networks are not simply digital versions of legacy financial rails.
Because digital assets are programmable and traceable, compliance does not have to rely only on traditional reporting models. Regulated service providers, transaction monitoring, Travel Rule implementation, and risk-based reporting can work together in ways that reflect how blockchain networks operate.
For Bitexen, Diuga says, that is where the long-term opportunity sits. South Africa’s digital asset market should not be limited to trading alone. A clearer framework can support tokenised assets, blockchain infrastructure, and regulated digital asset participation – contributing to a more mature ecosystem over time.
“South Africa has an opportunity to lead in blockchain-native financial infrastructure,” says Diuga. “The goal should be to protect the integrity of the financial system while still allowing responsible innovation to develop.”
The updated consultation process creates an important opportunity for regulators, financial institutions, compliance specialists, and digital asset businesses to contribute practical insight.
The real test now is whether the next version of the framework can protect the system, enable lawful participation, and recognise the technical realities that make digital assets different.