South Africa's National Treasury has unveiled a draft regulation that could fundamentally alter the crypto landscape. The proposal grants authorities sweeping powers to inspect personal devices for crypto apps and mandates the surrender of digital assets. Non-compliance carries severe consequences—a 1 million rand ($60,480) fine or five years imprisonment.

The Draft Capital Flow Management Regulations 2026 marks the first major overhaul of exchange controls in six decades. Industry leaders like VALR CEO Farzam Ehsani condemn the measures as regressive, warning they could drive innovation offshore. The framework treats cryptocurrencies as a systemic risk rather than a financial opportunity.

Border controls would empower officials to demand private keys, while peer-to-peer transactions face strict limits. This comes as global jurisdictions increasingly seek to regulate—rather than restrict—digital asset markets. South Africa's approach contrasts sharply with progressive frameworks emerging in Europe and the Middle East.