Luno CEO James Lanigan warned that South Africa's draft Capital Flow Management Regulations could lock local businesses out of a $33 trillion global stablecoin payment market. The National Treasury and the South African Reserve Bank extended the public comment deadline for the draft regulations to June 30, 2026, after industry backlash forced them to push back the initial May 18 deadline. Lanigan stated the regulations, first published in late April, could inadvertently block South African firms from using stablecoins for cross-border payments and capital repatriation. The draft rules represent an attempt to overhaul the country's decades-old exchange control regime, but critics warn the current wording threatens to exclude South Africa from modern digital payment infrastructure as global financial institutions migrate on-chain.
National Treasury and SARB Extended Comment Deadline After Industry Backlash
The National Treasury and the South African Reserve Bank published the draft Capital Flow Management Regulations in late April. The initial public comment deadline was set for May 18, but regulators extended it to June 30, 2026, following immediate industry backlash. Critics raised alarms over severe enforcement provisions in the draft rules, including potential prison sentences, heavy fines, and fears that the state could aggressively seize assets or restrict crypto ownership thresholds, forcing investors to liquidate holdings into rands.
The National Treasury and SARB issued a joint statement in May attempting to clarify their position. The statement said regulators have no intention of criminalizing asset ownership or applying rules retrospectively. However, Lanigan highlighted what he described as a deeper systemic threat to the business-to-business financial sector: restrictions on stablecoin use.
Bloomberg Data Shows Stablecoins Settled $33 Trillion in 2025
Lanigan cited Bloomberg data showing that stablecoins accounted for $33 trillion in payments and blockchain transfers in 2025, nearly double Visa's $17 trillion. "Stablecoins are already settling more value annually than Visa and Mastercard combined," Lanigan said. "This is driven by the use of crypto by businesses, in addition to ordinary investors."
According to Lanigan, the current wording of the regulations could prohibit local enterprises from using stablecoins to execute cross-border payments or repatriate funds. He stated this would deal a severe blow to South African multinationals operating across the continent, where severe shortages of physical US dollars make moving money and repatriating profits through traditional banking networks notoriously slow and expensive.
"Local stablecoins are critical infrastructure to support domestic payments and treasury flows, while dollar stablecoins provide a fast bridge to global commerce and cross-border settlement," Lanigan explained. "Together, they reduce friction, lower costs, and make money move more efficiently at home and abroad."
Lanigan noted that businesses approach Luno almost daily looking for stablecoin solutions to navigate the continent's currency liquidity crisis. He warned that by leaving these rules ambiguous or overly restrictive, the government is actively reducing payment flows into South Africa, harming local businesses, and shrinking the national tax base.
Draft Instructional Manual Defining Cross-Border Transactions Yet to Be Released
The National Treasury and SARB acknowledged that the exact definitions of what constitutes a "cross-border crypto transaction" will only be revealed in a subsequent, yet-to-be-released draft instructional manual. Until that framework is released, businesses are being forced to comment on regulations that leave them in a legal gray zone.
The absence of standardized banking reporting codes for stablecoin transactions leaves local firms hesitant to adopt them, fearing noncompliance. Lanigan stated that the primary frustration for industry stakeholders is that regulators are asking for feedback on rules without providing the actual operational context.
"It is essential that South Africa moves, through thoughtful revision of the draft Capital Flow Management Regulations, to unlock the economic growth potential of stablecoins," Lanigan urged. "Without the integration of stablecoins into the local financial mainstream, South Africa will limit its competitiveness in the modern economic system."
Frequently Asked Questions
What did the National Treasury and SARB do with the comment deadline for the draft Capital Flow Management Regulations?
The National Treasury and the South African Reserve Bank extended the public comment deadline for the draft Capital Flow Management Regulations to June 30, 2026. The initial deadline was May 18, but regulators pushed it back after immediate industry backlash to the draft rules published in late April.
Why did Luno CEO James Lanigan warn about the draft regulations?
Lanigan warned that the draft Capital Flow Management Regulations could inadvertently lock South African businesses out of a $33 trillion global stablecoin payment market. He stated the current wording could prohibit local enterprises from using stablecoins to execute cross-border payments or repatriate funds, which would harm South African multinationals operating across the continent.
How much value did stablecoins settle in 2025 according to Bloomberg data?
According to Bloomberg data cited by Lanigan, stablecoins accounted for $33 trillion in payments and blockchain transfers in 2025, nearly double Visa's $17 trillion. Lanigan stated that stablecoins are already settling more value annually than Visa and Mastercard combined.
