New draft rules could reshape crypto in South Africa

Shalom,

Victoria from Techpoint here,

Here’s what I’ve got for you today:

• Crypto industry pushes back on treasury draft
• Transfer costs rise despite CBN fee cuts
• SA pulls AI policy after AI makes up sources

Crypto industry pushes back on treasury draft in SA

South Africa is rewriting its exchange-control rulebook for the first time in more than 60 years, and the crypto industry isn’t thrilled. On April 17, 2026, the National Treasury published draft Capital Flow Management Regulations to replace the 1961-era framework and formally bring crypto into the country’s capital control system. The goal sounds reasonable: modernise oversight, tighten crypto monitoring, and align with global anti-money-laundering standards. But major players like VALR and Luno say the details raise serious concerns, and with the public comment deadline shortened to May 18, the industry is rushing to respond.

At the centre of the backlash are provisions that cut straight into how crypto works. The draft gives authorities broad powers to search and seize assets, including crypto, and would require every buyer to declare how and where their crypto was acquired. Penalties for getting it wrong are steep: up to R1 million in fines and five years in prison. But the biggest sticking point is classification. Under the proposal, even crypto trades between South Africans on local platforms could be treated as “capital exports,” as if the money had left the country. Luno’s regional lead, Marius Reitz, says that simply doesn’t make sense, assets held locally should be treated as local.

There’s also a layer of uncertainty baked into the rules. The draft repeatedly references a “determined threshold” — the level above which stricter controls apply — but never actually defines it. That leaves businesses trying to plan around a framework that is both strict and vague. Farzam Ehsani didn’t hold back, calling the document “alarming,” especially given how it could classify locally issued stablecoins and tokenised assets as foreign, effectively penalising innovation happening inside South Africa.

The timing is awkward because the sector has been gaining real traction. Since licensing kicked in under the Financial Sector Conduct Authority in 2023, hundreds of crypto firms have applied, with about 300 approvals so far. Crypto payments are no longer niche; they’re accepted at hundreds of thousands of merchant outlets, and partnerships like Discovery Bank’s integration with Luno show how embedded the space has become. Industry players worry that overly broad rules could undo that progress, especially if developers need Treasury approval just to build with blockchain-based tools.

What makes this more complicated is the bigger picture. South Africa is trying to position itself as a serious player in digital finance, even as it navigates other policy tensions, from satellite licensing disputes to recent tech policy missteps. The old exchange-control system dates back to apartheid-era restrictions designed to prevent capital flight. 

Now, instead of scrapping that logic, the government is updating it and pulling crypto into the mix. The industry’s concern is simple: if modernisation ends up adding more friction instead of less, it could send the wrong signal about where South Africa is really headed. The May 18 deadline is the first test of whether Treasury is listening.

Transfer costs rise despite CBN fee cuts

The Central Bank of Nigeria has effectively rewritten the price list for sending money, and at first glance, it looks like good news. On April 21, 2026, the regulator released a draft revised Guide to Charges, its first major update in six years, promising cheaper transfers across the board. Under the proposal, transfers below ₦5,000 are completely free; those between ₦5,000 and ₦50,000 drop to a flat fee of ₦10; and anything above ₦50,000 stays capped at ₦50. On paper, it reads like a win for everyday users.

But that’s only half the story. At the same time, the government has quietly reshaped another charge that sits on top of those fees: stamp duty. Reintroduced under the Nigeria Tax Act 2025, the ₦50 levy now applies to transfers of ₦10,000 and above, and crucially, it’s now charged to the sender, not the receiver. That shift changes how the cost is felt. A ₦15,000 transfer that used to cost ₦25 now costs ₦60. So while bank fees have gone down, the total cost of sending money has actually gone up for millions of people.

There are two different agendas at play here. The CBN is trying to push financial inclusion and make small and mid-sized digital payments cheaper so more people, especially low-income users and small businesses, move away from cash. The federal government, meanwhile, is focused on revenue. The old Electronic Money Transfer Levy has been reworked into stamp duty, expanded, and made more visible. And the numbers show why: the government is projecting ₦456.07 billion from it in 2026, rising to over ₦750 billion by 2028. This isn’t a minor tweak; it’s a serious revenue line.

There is at least one clear win in the mix. POS withdrawals — long a grey area where agents set their own prices — are finally getting structured. The new guide pegs on-us withdrawals at ₦100 per ₦20,000, compared to the current reality where some agents charge ₦100 for as little as ₦5,000. For Nigerians who still rely heavily on cash, that’s a meaningful correction in a largely unregulated corner of the system.

Still, the pressure point is obvious. For people who send money regularly, including salaries, rent, school fees, and family support, that extra ₦50 per qualifying transaction adds up quickly. 

What’s more, the apex bank has raised the cost of getting or replacing an ATM card to ₦1,500 (up from ₦1,000) but has also scrapped the monthly maintenance fee people used to pay on naira cards. Basically, you now pay more upfront, but avoid those small recurring charges. The new guide also pushes digital payments harder. POS transactions stay free for customers (merchants pay instead), virtual cards are free, and other fees are being tweaked to make the system more transparent and cashless-friendly.

SA pulls AI policy after AI makes up sources

South Africa has just pulled off a first nobody wants. The government used AI to help draft its national AI policy, and the AI appears to have made up a chunk of the bibliography. Communications Minister Solly Malatsi withdrew the Draft National Artificial Intelligence Policy on April 26, 2026, after News24 flagged references to academic papers that simply don’t exist. The citations looked legitimate — real-sounding authors, convincing titles — but the work couldn’t be traced to any actual research.

An internal review backed that up. The sources weren’t real, and the most likely explanation is familiar to anyone who has used generative AI: hallucination. Malatsi didn’t mince words. He said the issue goes beyond a technical error and has damaged the credibility of the entire policy. In his view, AI-generated content slipped into an official government document without proper human checks, an “unacceptable lapse.” He also hinted that officials involved in drafting and quality assurance will face consequences.

The scale of the embarrassment is hard to ignore. This wasn’t a rough internal draft. The policy had already gone through Cabinet and was approved at the highest level, including by President Cyril Ramaphosa, before being opened to public comment on April 10 with a June 10 deadline. In other words, fake citations passed multiple layers of government review before a journalist spotted the problem. That raises uncomfortable questions about how closely such documents are actually scrutinised.

What makes this more painful is that the policy itself wasn’t trivial. It proposed a National AI Commission, an AI Ethics Board, and even an AI Insurance Superfund, modelled after South Africa’s Road Accident Fund, to compensate people harmed by AI where liability is unclear. It was meant to be a serious governance framework. Now, it’s effectively back to square one. The consultation process will likely restart, and South Africa’s credibility in shaping AI policy takes a hit just as it was gaining momentum.

Zoom out, and this isn’t just South Africa’s problem. Across Africa, countries are racing to define their stance on AI. Nigeria, for instance, is preparing its own national AI strategy under Communications Minister Bosun Tijani, while Kenya, Rwanda, and Egypt are moving in similar directions. The incident gives weight to concerns raised by lawmakers like Khusela Diko, who has warned against relying on AI in drafting national policy. The risk is no longer theoretical.

The timing couldn’t be worse. South Africa is already in the middle of high-stakes tech policy debates, from satellite licensing reforms to tensions around Starlink and its local regulatory battles. Malatsi has been pushing an ambitious digital agenda, but this setback may slow things down. More broadly, it’s a cautionary tale for governments everywhere: AI can speed up policy work, but without rigorous human oversight, it can just as quickly undermine it. The real question now is how many other policy documents, globally, are sitting on equally shaky foundations.

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Have a lovely Tuesday!

Victoria Fakiya for Techpoint Africa