On 15 May 2025, the Gauteng Division of the High Court delivered a decision in Standard Bank of South Africa v South African Reserve Bank and Others [2025] ZAGPPHC 481 that draws attention to the interpretive boundaries of South Africa's Exchange Control Regulations, particularly in the context of cryptocurrency.

At the heart of the judgment lies a simple but legally consequential question: Is cryptocurrency "currency", "capital", or even "money" for the purposes of the Exchange Control Regulations, 1961?

The court's answer - a clear and deliberate "no". Concluding that until such time Parliament or the National Treasury acts, cryptocurrency remains, in the eyes of the law, beyond the reach of Exchange Control Regulations.

The dispute

The dispute arose from a forfeiture order issued by the South African Reserve Bank ("SARB") following its investigation into a company involved in cryptocurrency trading, suspected of contravening Exchange Control Regulations. Whereafter, SARB directed that approximately R26 million held in accounts linked to the company be forfeited to the state.

SARB advanced its case on the premise that the transactions contravened regulations 3(1)(c) and 10(1)(c) of the Exchange Control Regulations, which specifically requires authorisation for:

• Regulation 3(1)(c): payments made to, or on behalf of, persons outside the Republic; and
• Regulation 10(1)(c): the export of capital.

However, noting that the transactions involved cryptocurrency, Standard Bank, acting as a secured creditor, applied to court to set aside the forfeiture order arguing that the transactions did not contravene Exchange Control Regulations as cryptocurrency is neither recognised as money, currency, nor capital within the meaning of the regulations.

Cryptocurrency is not a "currency" or "capital"

This is the first South African judgment to directly address whether crypto assets fall within the ambit of the Exchange Control Regulations. While the parties did not dispute that cryptocurrency is not a legal tender in the Republic, SARB argued - in line with the definition of foreign currency – that "cryptocurrency was an instrument that permitted payment in currency which is not legal tender in the Republic". In essence attempting to categorise cryptocurrency as a form of payment.

However, the notion to characterise crypto as a proxy for foreign currency was rejected as inconsistent with both the text and purpose of the regulation. In adopting a restrictive interpretative approach, the court held firmly that cryptocurrency is not money, it is an asset that is bought and sold, it is not a legal tender nor does it fall within the regulatory references to foreign currency or negotiable instruments.

As regards to capital and relying on the case of OilwelI (Pty) Ltd v Protect International Ltd and Others SARB argued that the export of cryptocurrency amounts to an export of capital in that "capital is the making of monetary resources in a foreign jurisdiction." However, relying on the same case, the court again applied a restrictive approach. Accordingly on its current wording, cryptocurrency is not a monetary resource for purposes of Exchange Control Regulations nor can it be interpreted to fall within the ambit of capital being exported under regulation 10(1)(c).

SARB intends to regulate crypto

While the court notes a regulatory framework addressing cryptocurrency is long overdue, "one cannot say SARB has been caught napping".

In fact, in a 2021 "Position Paper on Crypto Assets" published by the Intergovernmental Fintech Working Group ("IFWG"), including SARB, the IFWG specifically recommended that SARB requests the Minister of Finance to amend the Exchange Control Regulations to include crypto assets under the definition of "capital" for purposes of regulation 10(1)(c).

Notwithstanding the above, the judgment underscores the distinction between policy intent and legal authority, reinforcing the principle that regulations with penal consequences must be clearly and narrowly construed.

For now, this remains the ranking judgement on the interpretation of the current exchange control manual in relation to crypto currency, other than stablecoins.

Stablecoins of course "marry" crypto with fiat currency, and as such we anticipate that it may at least be partially regulated by the current exchange control manual.

UPDATE: Since the initial drafting of this post, an appeal has been filed against this judgement. We will continue to track developments in the case, and post a follow-up when the appeal judgement is made public.