SA's crypto regulations ‘deny investors access to best-performing asset of past decade', says Luno GM
South Africa's crypto regulation debate has, at its centre, an ominous-sounding 'Board Notice 90'. No, it's not an order for Anakin Skywalker to go lightsabre-happy on younglings; it is an obscure piece of regulation that, in practice, keeps the country's most popular investment structures (pension funds) locked out of the global crypto boom.
Finance Minister Enoch Godongwana insists that prohibition is necessary. When asked why in Parliament, he said cryptocurrencies were 'risky investments' and the rules were designed to protect 'unsophisticated investors.'
But Marius Reitz, Luno's general manager for Africa and Europe, isn't buying it. 'It is becoming increasingly irresponsible for South African regulators and financial institutions to deny investors access to the best-performing asset of the past decade: bitcoin,' he said.
The art of protection
Reitz argues the minister's reasoning is inconsistent. Retail investors are already free to open an account with Binance, Luno or VALR and put their savings into bitcoin or ethereum directly. What they can't do is gain exposure through a Collective Investment Scheme (CIS) — the family of unit trusts, hedge funds and exchange-traded funds (ETFs) that anchor South African retirement and savings products.
'The surprising part,' said Reitz, 'is that unsophisticated investors are free to invest directly in crypto but are prevented from doing so via structured and professionally managed portfolios.'
Globally, crypto ETFs have moved from niche to mainstream. In the United States, BlackRock's bitcoin ETF became the fastest fund in history to hit $70-billion under management. Local investors, meanwhile, can only watch from the sidelines.
History casts a long shadow
To understand how we got here, you have to go back more than six decades. South Africa's exchange control regime was created in 1961, in the aftermath of the Sharpeville massacre. Capital fled the country, and the apartheid government introduced sweeping controls to put a stop to this. Those regulations are still largely in place, despite the democratic transition.
A 2020 Reserve Bank position paper even admitted that exchange controls 'do not govern the transfer of cryptocurrencies in and out of South Africa'. In practice, that means a regulatory vacuum.
The vacuum was finally punctured in October 2022, when the Financial Sector Conduct Authority declared crypto assets to be 'financial products', forcing service providers to obtain licences. Two months later, Godongwana designated crypto-asset platforms as 'accountable institutions' under the Financial Intelligence Centre Act, subjecting them to anti-money laundering rules.
Changing the game
Then, in a landmark judgment in May 2025, Judge Mandlenkosi Motha ruled in the North Gauteng High Court that cryptocurrencies fell outside the 60-year-old exchange control framework. He called the regulations 'not fit for purpose' to deal with digital assets, adding bluntly: 'A regulatory framework addressing cryptocurrency is long overdue.'
That ruling has forced the Reserve Bank into action. Godongwana has confirmed that a new crypto framework will be published later this year, setting out clear parameters for cross-border flows and the responsibilities of crypto platforms. The focus is on preventing illicit financial activity, not enabling local investment.
It also followed the first of many bitcoin all-time highs. Hannes Wessels, Binance South Africa's general manager, told Daily Maverick, 'It reflects growing global confidence in digital assets, driven by strong institutional demand and regulatory progress. At Binance, we're proud to support this momentum and remain committed to accelerating crypto adoption worldwide.'
What this means for you
If the Reserve Bank tweaks the rules, especially by designating locally held crypto as 'onshore', it could open the door for South African ETFs and collective investment scheme (CIS) funds to include bitcoin. That would mean you could get exposure through the same structures that manage your retirement annuity or unit trust.
Luno estimates that clearer rules could unlock billions in institutional capital and generate up to R500-million in extra tax revenue. That's not just good for investors, it's money for the fiscus too.
Right now, the safest, most regulated investment vehicles in South Africa are shut out of crypto. If Board Notice 90 is amended, the average investor could finally get exposure to the digital asset class, but with the guardrails of professional management. Until then, it's DIY.
Execute Board Notice 90
Reitz's real gripe is with Board Notice 90 of 2014. The document prescribes what assets CIS funds can hold. Crypto is explicitly excluded. For Reitz, that means South African pension funds and institutional investors are locked out of the world's fastest-growing asset class. But, to be fair to the lawmakers, bitcoin was only five years old.
Between 2015 and 2025, bitcoin's value surged by around 37,000%, moving from about $430.57 to $119,448.49. Reitz argues that South African savers missed the bus, not because they were cautious, but because regulators decided on their behalf. 'A measured allocation to crypto assets could give ordinary investors a stake in the future of digital finance,' he said.
Luno wants the Reserve Bank to go further still, by designating digital assets as 'onshore' when held with locally licensed platforms. That would clarify whether bitcoin ETFs count toward the strict foreign asset limits that keep institutional investors cautious. Reitz says such a move could unlock billions in liquidity and generate up to R500-million in extra tax revenue.
The road ahead
Godongwana has never explicitly opposed changing bitcoin regulations; he is just wary of rushing it. His rhetoric has consistently centred on protecting the integrity of the financial system.
'Trust is fundamental to any financial system's effectiveness and existence,' he told MPs. 'To counteract this, we must adopt a regulatory framework that is as dynamic and proactive as the financial sector itself.'
But the clock is ticking. Other jurisdictions are already treating crypto as a legitimate asset class. South Africa's investors, many of whom already hold crypto directly, are left without the safeguards and efficiencies of professional management.
For now, Godongwana's caution carries the day. But with each passing year, the cost of sitting on the sidelines grows. DM
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