Crypto Assets in South Africa: Clarity Through Contrast in Regulation and Case Law

Two recent developments have provided some much-needed clarity on the treatment of crypto assets in South Africa.

On 28 May 2026, the South African Reserve Bank (“SARB”), the Financial Sector Conduct Authority (“FSCA”), the Prudential Authority and the Financial Intelligence Centre issued Joint Communication 1 of 2026: Crypto Assets for Domestic Payment Purposes (“Joint Communication”), clarifying the regulatory treatment of crypto assets when used for domestic payment purposes.

Just days later, on 1 June 2026, the Gauteng Division of the High Court handed down judgment in Mangundhla and Another v South African Reserve Bank and Others (2022/029979) [2026] ZAGPJHC 579 (1 June 2026) (“Mangundhla”), finding that Bitcoin is both “money” and “capital” for purposes of South Africa’s exchange control framework.

At first glance, the Joint Communication and the judgment appear to be at odds.

The Joint Communication states that crypto assets are not considered payment for purposes of the National Payment System Act, 78 of 1998 (“NPS Act”), are not regarded as “money” or “funds” for purposes of the NPS Act, and do not constitute legal tender in South Africa. By contrast, Wilson J in the Mangundhla judgment concluded that Bitcoin is both “money” and “capital” for purposes of the Exchange Control Regulations, 1961 and the Currency and Exchanges Act, 9 of 1933.

The Joint Communication and the Mangundhla judgment collectively illustrate an increasingly important feature of crypto asset regulation - the legal characterisation of crypto assets depends on the legislative framework and regulatory purpose under consideration.

Taken together, the Joint Communication and Mangundhla judgment provide valuable insight into how South African regulators and Courts are approaching crypto assets as the country’s digital asset framework continues to evolve.

The distinction between financial products and recognised payment instruments

The main message of the Joint Communication is that regulation under the Financial Advisory and Intermediary Services Act, 37 of 2002 (“FAIS Act”) should not be confused with regulation under South Africa’s payments legislation.

On 19 October 2022, the FSCA published the Declaration of a Crypto Asset as a Financial Product under section 1(h) of the FAIS Act. The declaration included crypto assets within the definition of “financial product” and resulted in crypto asset service providers becoming subject to the FSCA’s licensing and supervisory framework. Persons rendering advice or intermediary services in relation to crypto assets are generally required to be authorised as financial services providers in terms of section 7 of the FAIS Act.

The purpose of the declaration was to regulate crypto asset-related financial services and enhance customer protection. It was not intended to recognise crypto assets as money, currency or legal tender, nor was it intended to bring crypto assets within South Africa’s national payment system.

The Joint Communication therefore emphasises that authorisation under the FAIS Act does not amount to authorisation to provide payment services under the NPS Act and does not alter the legal status of crypto assets for payment purposes.

This distinction has become important as crypto asset adoption has grown and businesses have explored the use of digital assets in commercial transactions and payment arrangements.

What does the Joint Communication say?

The Joint Communication states that crypto assets are currently “not considered payment for purposes of the NPS Act”.

It further confirms that crypto assets:

• currently fall outside the scope of the NPS Act;
• are not regarded as “money” or “funds” for purposes of the NPS Act; and
• “do not constitute legal tender” in South Africa.

The Joint Communication therefore confirms that crypto assets do not currently form part of South Africa’s regulated national payment system.

Why does the NPS Act matter?

The NPS Act establishes the legal framework through which payment obligations are cleared and settled within South Africa’s financial system. It regulates payment clearing services, settlement systems, payment system participants and the broader infrastructure through which payments are processed and settled.

Against this backdrop, the statement that crypto assets are “not considered payment for purposes of the NPS Act” carries important consequences.

It means that crypto asset transactions do not currently form part of South Africa’s regulated national payment system and that crypto assets are not recognised as payment instruments under the existing legislative framework.

Importantly, however, the Joint Communication does not prohibit the use of crypto assets in commercial transactions.

Parties remain free to agree contractually to settle obligations using crypto assets. Businesses may choose to accept crypto assets as consideration for goods or services. The regulators’ communication does not state that these arrangements are unlawful, but rather that they remain private contractual arrangements that fall outside the national payment system and do not enjoy the legal status afforded to recognised payment instruments.

The Mangundhla judgment

Only a few days after the Joint Communication was issued, the Gauteng Division handed down judgment in Mangundhla.

The case concerned approximately 1680 Bitcoin, with a value of just under R182 million, that had been transferred from South Africa to wallets accessible through cryptocurrency exchanges registered outside South Africa, and the Court considered the following issue:

“The central question in this case is whether cryptocurrency (in this instance Bitcoin) constitutes either “money” or “capital” for the purposes of section 10 (1) (c) of the Exchange Control Regulations, 1961. I conclude that it is both.”

The applicants challenged a forfeiture order issued under the Exchange Control Regulations on the basis that cryptocurrency was neither “money” nor “capital” and therefore fell outside the exchange control framework. Wilson J rejected those arguments, and held that cryptocurrency constitutes a “financial capital asset” in terms of the Exchange Control Regulations, and that excluding it from the exchange control framework would undermine the very purpose of South Africa’s exchange control regime.

In considering whether Bitcoin constitutes “capital” for purposes of regulation 10(1)(c), the Court held:

“It seems to me that even if capital is given the relatively narrow definition of any financial asset that is capable of holding value or being used as a medium of exchange, cryptocurrency is certainly capital.”

The Court explained that Bitcoin is capable of being purchased, held as an investment, exchanged for fiat currency and used as a medium of exchange. As a result, it falls within the concept of “capital” for purposes of the Exchange Control Regulations.

The Court also concluded that transferring Bitcoin to wallets maintained on foreign cryptocurrency exchanges amounted to the export of capital from South Africa and therefore required exchange control approval.

Perhaps most notably, the Court expressly disagreed with the earlier decision in Standard Bank of South Africa v South African Reserve Bank 2025 (5) SA 289 (GP) where Motha J held that (i) cryptocurrency does not constitute “money” or “capital” and falls outside of the Exchange Control Regulations; (ii) the “60 plus old Excon Regulations [may not be] fit for purpose to deal with the machinations in the world of cryptocurrency”; and (iii) if the scope of capital was to be extended to include cryptocurrency, it has to be done by way of legislative amendment.

Wilson J concluded that the earlier decision was clearly wrong, before finding that the emphasis placed in Standard Bank on the intangible and technological features of cryptocurrency overlooked its economic reality and practical use as a form of value and medium of exchange.

The Court’s conclusion on the status of Bitcoin as money was equally clear:

“In my view, Bitcoin is clearly money.”

The Standard Bank decision remains subject to appeal before the Supreme Court of Appeal, and it is therefore possible that the appellate Court will provide the definitive determination on whether cryptocurrency constitutes a “financial capital asset” for purposes of South Africa’s exchange control regime. Such clarity would be desirable, as a conclusive ruling from the Supreme Court of Appeal would promote greater legal certainty in this evolving area of law.

Is there a contradiction?

Despite the apparent tension, the Joint Communication and Mangundhla judgment are in fact addressing different legislation and different regulatory objectives.

The Joint Communication considers whether crypto assets currently fall within the NPS Act and whether they should be recognised as payment instruments within South Africa’s regulated payments infrastructure.

The Mangundhla judgment, on the other hand, considers whether Bitcoin constitutes money or capital for purposes of South Africa’s exchange control regime.

The two exercises serve fundamentally different purposes:

• The NPS Act is concerned with payment system regulation, clearing and settlement infrastructure and the regulation of payment instruments within the formal payments ecosystem in South Africa.
• The Exchange Control Regulations are concerned with the movement of value across South Africa’s borders and the preservation of exchange control mechanisms designed to regulate capital flows.

Viewed through this lens, the two positions are not necessarily inconsistent. The same asset may be characterised differently depending on the purpose of the legislation being applied.

Indeed, the reasoning in the Mangundhla judgment suggests that South African Courts are likely to adopt a functional approach to crypto assets - i.e. Courts may increasingly consider the economic role they perform in a particular statutory context.

Stablecoins and future regulatory developments

The most significant forward-looking aspect of the Joint Communication concerns stablecoins.

The regulators indicate that proposed reforms to the NPS Act may enable the SARB to designate and regulate payment instruments other than money where appropriate. This could create a legislative basis for regulating certain crypto asset payment arrangements in future.

Significantly, the Joint Communication distinguishes between unbacked crypto assets such as Bitcoin and stablecoins.

While the SARB indicates that it is unlikely to designate unbacked crypto assets as payment instruments due to concerns regarding volatility and their ability to perform the traditional functions of money, the communication adopts a noticeably different approach to stablecoins.

The Intergovernmental Fintech Working Group is currently considering use cases for rand-backed stablecoins and the SARB has expressed an interest in exploring stablecoin payment arrangements through the Regulatory Sandbox.

Practical implications for businesses

For crypto asset service providers, the Joint Communication confirms that compliance with the FAIS Act remains important. However, authorisation under the FAIS Act does not provide a basis for offering regulated payment services under the NPS Act.

For fintech businesses and payment service providers, the communication provides important clarity regarding the current regulatory perimeter and confirms that crypto asset payment arrangements remain outside South Africa’s regulated national payment system.

At the same time, the Mangundhla judgment demonstrates that crypto assets are unlikely to escape all regulatory oversight merely because they operate through new technologies. Businesses that facilitate cross-border crypto asset transactions should carefully consider the potential exchange control implications of those activities.

Perhaps most importantly, the Joint Communication and Mangundhla judgment suggest that regulators and Courts are moving towards a more practical approach to crypto asset regulation, with the outcome depending on the applicable regulatory framework under consideration.

It will however be important to look out for any developments regarding the pending appeal to the Supreme Court of Appeal in respect of the Standard Bank decision.

Looking ahead

The Joint Communication and Mangundhla judgment represent two important developments in South Africa’s evolving crypto asset framework which demonstrate the increasingly nuanced approach being adopted by South African regulators and Courts.

As digital asset regulation continues to mature, businesses should expect the legal treatment of crypto assets to depend less on what crypto assets are and more on the function they perform within the particular legislative and regulatory framework under consideration.

For more information on the Joint Communication, the Mangundhla judgment, crypto asset regulation, digital asset payment arrangements or the potential implications of future reforms to South Africa’s payments and exchange control framework, please contact Clyde & Co’s Corporate and Regulatory team.