Crypto industry stakeholders are calling for national treasury to classify bitcoin as an onshore asset when held by local, licensed cryptocurrency exchanges.

According to Digital Currency Group-owned cryptocurrency exchange Luno, the move will advance the status of bitcoin in South Africa’s financial regulatory landscape and allow institutional investors to apportion a larger share of their funds to the asset class.

“Internationally, cryptocurrencies are now just another recognised asset class to invest in along with stocks, government bonds and fiat currencies,” said Paul Harker, global head of legal and corporate strategy at Luno, in a statement this week.

“In the current constrained fiscal reality, our government has little room to manoeuvre. Pro-growth and forward-looking decisions are essential.”

South African regulators have taken a cautious approach to the inclusion of cryptocurrencies into the financial system. The Financial Sector Conduct Authority in October 2022 declared crypto assets as financial products under the Financial Advisory and Intermediary Services Act. This was the first move to place crypto assets within South Africa’s regulatory framework, allowing for increased regulatory oversight, improved consumer protection, clarity on the taxation of crypto assets and a decrease in the level crypto-related fraud.

Tax revenue

According to Luno, South Africa risks falling behind in embracing crypto as a recognised asset class by institutional and individual investors. Luno urged finance minister Enoch Godongwana to help change this classification, claiming it would, at “no cost to the fiscus”, see the returns generated by these assets “reinvested in South Africa, which in turn will increase tax revenue”.

Digital currencies are classified neither as onshore nor offshore assets, according to South African regulations. Luno said this “policy uncertainty” complicates the reporting of cross-border crypto transactions to the Reserve Bank.

Read: Keep bitcoin away from South Africa’s strategic reserve: Helen Zille

Although other advancements, such as the creation of a central bank digital currency, are still under consideration by the Reserve Bank, cryptocurrencies do not enjoy fiat currency status in South Africa. Other proposals, such as the inclusion of bitcoin in South Africa’s strategic national reserve, have been scoffed at by Reserve Bank governor Lesetja Kganyago.

The Reserve Bank told TechCentral on Friday that several frameworks have been developed by the Intergovernmental Fintech Working Group as part of work being done to develop comprehensive cryptocurrency regulations for South Africa. “The classification of crypto assets as domestic or foreign for capital flow management purposes will form part of a framework to be decided on in due course,” it said.

Luno has called for speedier interventions.

“Luno acknowledges the forward strides already made in South Africa’s regulation of digital assets,” the company said in the statement. “But ordinary South Africans and the fiscus have yet to experience the true benefit of the digital asset revolution that has boosted the economies of many other countries.” — (c) 2025 NewsCentral Media

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