VALR Responds to Proposed Cross-Border Crypto Ban

South Africa’s proposed cross-border crypto rules have drawn strong reactions from the country’s digital asset industry. Among the first to respond is VALR, the country’s largest crypto exchange. While the company supports stronger regulation, it believes parts of the proposal could hurt legitimate businesses instead of stopping illicit financial activity.

The response follows the publication of a draft Crypto Asset Manual by the National Treasury and the South African Reserve Bank (SARB). The proposal would regulate cross-border crypto transactions under South Africa’s capital flow management framework. It would also stop companies from transferring crypto assets abroad while allowing eligible individuals to make qualifying transfers through authorised providers.

VALR Supports Regulation but Questions the Proposal

VALR says it welcomes stronger oversight of the crypto industry. The exchange supports efforts to improve financial stability, protect consumers, and combat money laundering. However, the company believes the proposed restrictions on corporate crypto transfers could create unintended consequences.

Farzam Ehsani, VALR’s co-founder and CEO, said the proposal could push legitimate businesses away from regulated platforms instead of improving transparency. According to Ehsani, that outcome would make it more difficult for regulators to monitor financial activity. It could also reduce the transparency that the National Treasury and the SARB are trying to achieve. He added that the proposal could slow the growth of South Africa’s digital asset industry.

“This would reduce the very visibility and surveillance that Treasury and the Reserve Bank seek to achieve, while undermining employment, tax revenue, investment, innovation and business formation.”

Stablecoins Could Also Be Affected

Ehsani also highlighted the role of stablecoins in modern payments. He argued that regulated businesses should continue using stablecoins for legitimate cross-border transactions. According to him, the technology already offers faster, cheaper, and more transparent international payments than many traditional systems.

“This is particularly concerning when stablecoins and other crypto assets can facilitate cross-border payments more quickly, cheaply and transparently than traditional channels, while remaining fully subject to appropriate reporting and oversight.”

VALR believes regulation should focus on supervising how companies use digital assets instead of limiting access to the technology itself.

VALR Calls for Industry Engagement

Despite its concerns, VALR has not rejected the draft framework. Instead, the exchange has encouraged businesses, customers, and other stakeholders to participate in the public consultation process before regulators finalise the rules. Ehsani also questioned the reasoning behind the proposed corporate restriction.

“On what principled basis should corporations and institutions be prohibited from using this technology to move value legitimately between South Africa and the rest of the world?” He said regulators and industry participants should work together to develop practical rules that support innovation while protecting the financial system.

Why the Proposal Matters

South Africa already has one of Africa’s most developed crypto regulatory environments. The Financial Sector Conduct Authority (FSCA) licenses Crypto Asset Service Providers. The Financial Intelligence Centre also requires regulated firms to comply with anti-money laundering rules, customer due diligence requirements, and the Travel Rule.

The proposed framework would introduce another layer of oversight. It would bring cross-border crypto transfers under South Africa’s capital flow management system. For regulators, the goal is to strengthen financial integrity and reduce illicit financial flows. For exchanges like VALR, the challenge is ensuring that new rules do not discourage legitimate business activity or weaken South Africa’s position as a regional crypto hub.

What Happens Next?

The draft regulations remain open for public comment. After reviewing industry feedback, the National Treasury and the SARB will decide whether to revise the proposal before publishing the final framework. For now, nothing changes for VALR customers or other crypto users.

Licensed exchanges will continue operating under the existing rules until regulators introduce any new requirements. The outcome of the consultation could shape one of Africa’s most important crypto regulatory frameworks. It may also influence how other countries regulate cross-border digital asset transactions.

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Editorial Takeaway

VALR’s response shows that the debate is no longer about whether crypto should be regulated. Instead, the discussion now focuses on how regulators can build rules that strengthen oversight without limiting legitimate innovation.

South Africa has an opportunity to create a balanced framework that protects the financial system while allowing compliant businesses to compete globally. If regulators strike that balance, the country could reinforce its position as one of Africa’s leading digital asset markets.