VALR and Luno, South Africa's largest regulated crypto platforms, have brought their fight into the public sphere by forming a coalition and initiating a petition against the draft rules. These rules could prohibit local companies from conducting cross-border payments using crypto assets.
The coalition named itself Catastrophe — Crypto Asset Taskforce for Advancing Sound, Technology-Neutral Regulation for Opportunity, Prosperity and a Healthy Economy. It includes VALR, Luno, AltCoinTrader, and EasyEquities, as well as professors, lawyers, economists, and entrepreneurs. The campaign launch is scheduled for Wednesday, September 9th, three weeks before the comment period ends on September 30th.
The issue concerns the draft guidelines for cross-border crypto activities, which were published by the national treasury and the Reserve Bank's financial supervisory department in early August, as well as the draft capital outflow management provisions that will replace the Export Control Regulations of 1961.
The coalition raises two main objections. The first is that South African companies may lose the ability to use regulated crypto channels for cross-border operations that are fully legal through banks. Local firms can own and trade cryptocurrency domestically, but they are prohibited from participating in transactions considered capital import or export. For example, a software company invoicing an American client in dollar-denominated stablecoins would not be able to legally receive the money through a licensed local provider.
The second objection, which the campaign calls the 'self-custody one-way street,' is that while an individual can move crypto assets from an authorized South African provider to a personal wallet, returning those assets is deemed unacceptable. The campaign states on its website: 'Good regulation should encourage activity to return to the regulated system, not create a one-way door out of it.'
Kganyago's Words
Catastrophe's central argument is based on an idea borrowed from the Reserve Bank's manager. Speaking at the MTN Group Fintech summit last week, Lesethja Kganyago outlined the concept of the central bank shifting from entity-based regulation to payment system activity-based regulation. He stated: 'The principle is simple: similar payment operations should fall under similar regulatory expectations, regardless of whether they are executed by a bank or a fintech company.'
The coalition believes that failing to apply this principle to cross-border payments is a deviation from technology-neutral regulation. They note that banks, authorized dealers, and licensed crypto providers may require different operational rules, but equivalent activities should attract equivalent permissions.
According to the campaign, hundreds of licensed crypto asset service providers operate in South Africa, employing thousands of people and paying billions of rand in corporate income tax, PAYE, and VAT. Catastrophe warns that these jobs will be threatened if the rules are adopted in their current form, and billions in foreign investment are already pending, although specific investors are not named.
Usually, regulatory lobbying happens discreetly, through written submissions and closed meetings. When journalists asked why the industry decided to go public, VALR CEO Farzam Ehsani, speaking as a signatory rather than on behalf of the campaign, replied that the stakes justified the move. He told TechCentral that the industry has interacted with politicians for years and will continue to do so, but the proposals contain potentially far-reaching consequences for South African businesses, consumers, and the broader digital asset industry. 'It is important that those who might be affected understand what is being proposed and have the opportunity to voice their opinion,' he added. He clarified that the campaign aims to broaden participation in consultations.
Ehsani made similar statements previously in a submission last month, arguing that banning legitimate corporate activity through regulated providers 'would likely push transactions underground or abroad' and deprive authorities of desired transparency. He had previously advocated for the complete abolition of capital controls while maintaining reporting obligations.
Commercial implications emerged on Tuesday, September 8th, when Luno announced a partnership with the US regulated digital clearinghouse Meridian. This will allow institutional clients to mint stablecoins upon receipt of a dollar payment. Dollars received via ACH, FedWire, or Swift are automatically minted into USDC or USDT and credited to the client's Luno wallet, replacing over-the-counter processes that can take hours or days. The launch will first occur in South Africa, utilizing the Class F digital asset license recently obtained by Luno in Bermuda.
Paul Harker, Luno's Global Head of Legal and Corporate Strategy, noted: 'The appeal of stablecoins to institutional treasurers is less about cryptocurrency and more about control. Businesses can plan their cash flow only if they can receive dollars when they need them, not just when their bank, counterparty, and correspondent network are all open.'
Luno also pointed out in the same announcement that the draft rules could make the product unavailable locally, as the proposed pre-approval would negate the purpose of instant settlement. This demand is not theoretical: the IMF reported in June that dollar-pegged tokens have become a significant cross-border channel in Nigeria, where dollar liquidity shortages leave businesses with few alternatives.
Bypassing Capital Controls
Part of the complaint relates to timing: Mastercard completed the acquisition of BVNK for up to $1.8 billion in August, marking the largest deal in a series of stablecoin deals by global payment networks.
Catastrophe's minimum requirement is level playing field: allowing local businesses to conduct cross-border operations in cryptocurrency, permitting asset movement in both directions between regulated platforms and self-custody, and regulating risk, not technology. Their ideal is the complete abolition of capital controls in South Africa. They stated they will disband after achieving the best outcome.
The Treasury and the Reserve Bank argue that the approach to cryptocurrency is aimed at minimizing regulatory arbitrage between entities conducting cross-border business. When the Treasury first signaled a change in February, it clearly identified the problem: 'Since crypto payments have no borders, they represent an opportunity to bypass capital controls.'
Thus, both sides want the same thing: crypto activity within a regulated system where it can be tracked. However, they disagree on which set of rules will keep it there. — © 2026 NewsCentral Media