South African crypto exchange Luno has warned that proposed rules for cross-border crypto transactions could conflict with the country’s international commitments. The company also says the rules could make South Africa’s financial system less competitive.
Luno raised the concerns in its formal submission on the South African Reserve Bank’s (SARB) draft Crypto Asset Manual for cross-border activities. The draft aims to bring crypto transfers into South Africa’s capital-flow monitoring framework.
However, Luno argues that some provisions could treat digital assets differently from traditional financial instruments, even when they serve the same economic function.
Luno Raises Concerns Over Stablecoin Payments
Stablecoin payments are among Luno’s main concerns.
The proposed framework would classify all stablecoin payments as capital flows, according to Luno. That would include payments for goods and services. By comparison, a similar transaction could count as a current payment if the customer used US dollars through a traditional bank.
Luno says this distinction raises questions about consistency with South Africa’s IMF commitments and SARB’s own methodology.
The company argues that regulators should focus on what a digital asset does rather than simply on its form.
Luno Wants Different Crypto Assets Treated Differently
Luno also objects to the draft’s broad treatment of crypto assets.
The proposed manual does not distinguish between Bitcoin, stablecoins and utility tokens. SARB has acknowledged that it needs more work on different crypto-asset categories.
Luno wants Bitcoin treated as an issuerless commodity. It also wants regulators to classify stablecoins as payment instruments under a dedicated regulatory framework.
Meanwhile, the company says regulators should treat utility tokens as blockchain infrastructure rather than automatically applying exchange-control rules.
Draft Rules Could Restrict Business Crypto Transfers
Another major concern involves businesses moving crypto across South Africa’s borders.
Under the draft framework, only individuals could initially externalise crypto through authorised crypto-asset service providers using their existing foreign-exchange allowances.
Businesses would not receive the same option.
Luno says this restriction could create problems for market makers and other companies that provide liquidity to local crypto platforms.
Market makers often move assets across borders to keep local prices aligned with international markets. Luno argues that restricting these firms could reduce liquidity and increase costs for South African crypto users.
Self-Custody Rules Raise Another Concern
Luno also challenges the proposed treatment of self-custodied crypto.
The draft would allow crypto to move from a local authorised platform to a customer’s non-custodial wallet. However, Luno says the framework does not provide a clear route for those assets to return from the wallet.
The company argues that this approach could encourage assets to remain offshore rather than strengthen South Africa’s regulated crypto market.
SARB Says the Framework Is Still Being Refined
The concerns come as South African regulators continue developing the framework.
National Treasury and SARB published the draft Crypto Asset Manual in August. The consultation closed on September 30, 2026.
The regulators said they would refine the manual after reviewing public comments and stakeholder feedback.
SARB says the framework aims to improve monitoring of cross-border crypto flows. It also seeks to detect, deter and disrupt illicit financial activity.
Under the proposed system, a cross-border event occurs when crypto moves between a domestic authorised crypto-asset service provider and an offshore provider. The definition also covers transfers from a domestic provider to a non-custodial wallet.
IMF Has Also Highlighted Stablecoin Policy Risks
Luno’s warning comes as the IMF examines stablecoins and capital-flow management in emerging markets.
In an August speech delivered in South Africa, IMF First Deputy Managing Director Dan Katz said stablecoins could improve competition and payment efficiency. He also warned that they could create new challenges around foreign-currency access and capital flows.
The IMF has highlighted South Africa’s draft Crypto Asset Manual as an important step toward better data collection and monitoring of digital assets.
However, the IMF has not said that South Africa’s draft rules violate its commitments. Luno makes that argument based on its interpretation of the proposed treatment of stablecoin payments.
Luno Calls for a More Flexible Framework
Luno says South Africa can protect its financial system without restricting legitimate digital-asset activity.
The company wants locally purchased crypto held on South African-licensed platforms to count as onshore assets. It also wants companies, including international market makers, to retain access to the local market under appropriate rules.
Luno further supports stablecoin payments and business cross-border transactions within a clear reporting framework.
Luno Africa general manager Marius Reitz described the current manual as a starting point rather than a final position. He said the company remains willing to engage with SARB and National Treasury.
South Africa Faces a Policy Balancing Act
The debate highlights a key challenge for South African regulators.
Authorities want to prevent crypto from becoming a channel for evading exchange controls or moving illicit funds. At the same time, stablecoins are becoming increasingly relevant to payments, remittances and international settlement.
The IMF has noted that stablecoins can offer lower-cost payment options. It has also identified risks involving dollar access and capital flows.
For South Africa, the final rules will need to balance financial surveillance with innovation and international competitiveness.
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Editorial Takeaway
Luno’s submission puts the spotlight on a key issue in South Africa’s crypto regulation: whether regulators should apply exchange-control rules based on an asset’s form or its economic function.
The draft remains subject to change. SARB and National Treasury have said they will consider stakeholder feedback before refining the framework.
For the country’s growing digital-asset industry, the final treatment of stablecoins, businesses and self-custodied wallets could shape how easily South Africa connects to the next phase of global digital payments.
