It’s no secret that crypto adoption and crypto regulation have not been keeping pace in South Africa, resulting in a complicated legal environment when it comes to how the digital asset is treated from a payment perspective and exchange control perspective.
On 1 June, Johannesburg High Court judge, Judge Stuart Wilson muddied the already-unclear waters further when he delivered a landmark ruling placing Bitcoin firmly within South Africa’s exchange control regime. He found that cryptocurrency is both “money” and “capital” under South African financial law, and offshore transfers can be seen as potential breaches of exchange control regulation.
Commenting on this are finance and banking experts from the commercial law firm Cliffe Dekker Hofmeyr (CDH), who explain that the ruling is important because it conflicts with prior legal classifications that deemed crypto neither money nor capital.
“In 2025, Judge Motha ruled that crypto is not money, foreign currency, or capital and, therefore, exchange control laws don’t clearly apply.”
According to CDH, this means we now have two conflicting legal interpretations of cryptocurrency at High Court level.
“There is no longer a single, authoritative legal classification of crypto in SA. The regulatory ‘standard’ that the market thought existed has been undermined,” says the law firm. “As a result, businesses don’t have clarity on whether crypto is deemed capital, money, or neither in the eyes of the law, and whether cross-border transfers involving crypto are restricted. This creates compliance ambiguity and legal risk.”
At the same time, the firm notes that two key pieces of legislation are under review, signalling a rapidly evolving financial landscape.
“The South African Reserve Bank (SARB) has proposed changes to the National Payment System Act, which governs domestic digital finance and payment systems,” CDH says. “The proposed reforms are driven by the SARB’s intention to modernise the payment landscape and would empower it to legally declare and regulate digital currencies – like crypto assets – as valid domestic payment instruments.
“Secondly, National Treasury has published draft Capital Flow Management regulations designed to replace the outdated 1961 Exchange Control Regulations. Among other things, they specifically bring crypto assets into the exchange control framework with the associated regulatory and compliance requirements for cross-border crypto transfers.”
As a result, the firm explains that the situation is cloudy at best as there is no settled legal definition across all the crypto-relevant laws.
“While crypto is legal in SA, it is currently not deemed legal tender,” CDH’s experts say. “It is, however, regulated by the Financial Sector Code Authority (FSCA) subject to Anti-Money Laundering rules, and taxed as an asset, despite exchange control treatment currently being contested.
“If there is one takeaway from the latest High Court ruling, it is that we are currently living in an evolving system which is possibly becoming a bit stricter where it matters,” the law firm says. “The shifts point to a legislature that is trying to keep up with the financial times. For corporate South Africa, this means less box-ticking and more thinking. There is a bit more flexibility, sure, but also a lot less certainty.”