This is a guest article by Gilbert Punt CA(SA), CEO at Kuda FX. Views expressed are the author’s own.
Disclosure: Kuda FX holds a Crypto Asset Service Provider (CASP) licence relevant to the subject of this column.
Draft Capital Flow Management Regulations published in April 2026 represent a gradual loosening at the edges, driven less by pure policy intent and more by practical necessity.
South Africa’s decision to increase the Single Discretionary Allowance (SDA) from R1 million to R2 million has been widely welcomed. It reduces friction for individuals moving funds offshore and reflects a degree of responsiveness from policymakers.
The context, however, is important. The previous increase to R1 million was introduced in 2010 and remained unchanged for more than a decade. Over that period, inflation has broadly doubled the price level, which means the new R2 million limit largely restores the purchasing power of the original threshold rather than materially expanding it. Framed this way, the adjustment feels less like reform and more like a delayed alignment with economic reality.
More meaningful developments have taken place away from the headlines.
The introduction of inward loop structures in 2021 allows South African residents to reinvest externalised capital legitimately back into the country. While still subject to reporting and valuation requirements, it marked a shift away from the long-standing resistance to so-called “round-tripping” of capital and reflects a more pragmatic view of how South Africans operate across jurisdictions.
Even more notable is the growing use of trust-to-trust distributions, an area that remains largely unknown outside specialist circles. A post-2021 SARB circular amended the wording of the Authorised Dealer Manual and formally approved income and capital distributions from inter vivos trusts to non-resident beneficiaries, a definition that expressly includes offshore beneficiary trusts.
Following that change, SARS issued a complementary notice setting out the applicable procedure, including the Tax Compliance Status process and, where beneficiaries are not registered on the SARS database or are inactive, the issuance of a Manual Letter of Compliance for International Transfers. At the time, the significance of the amended wording was not widely appreciated, and the practical implications have only become clearer through application. These transactions still require careful structuring and alignment with both bank and regulatory expectations, but the formal basis for them is now established.
This is not a theoretical development. We have assisted clients in facilitating significant cross-border transfers using these structures. The process remains controlled and highly specific, but the practical reality is that transactions which would historically have been extremely difficult to execute are being accommodated.
What makes this particularly interesting is how it unfolded. The formal basis, the amended AD Manual wording, was put in place through the proper sequence: SARB circular, then SARS procedure notice. What lagged was recognition. The significance of the change was not widely understood at the time, and practical application only followed once specialists began to work through what the new wording actually permitted. In that sense, the gap was not between policy and practice, but between policy and awareness, a distinction that matters, because it suggests the system may be ahead of its own reputation in some areas.
That pressure is becoming more visible in the context of digital assets. National Treasury has confirmed that crypto assets will be incorporated into South Africa’s capital flow management framework, reflecting the reality that cross-border value transfer is no longer limited to traditional banking channels. Technologies such as stablecoins are already enabling faster and more flexible movement of capital, often outside the structures that exchange control was originally designed to govern.
The Standard Bank v SARB matter has already highlighted the legal uncertainty in this area, particularly around whether crypto assets fall within the existing definitions underpinning exchange control. Regardless of the eventual legal outcome, the case has made it clear that the current framework is being tested by developments it was not designed to accommodate.
The framework responds: Capital Flow Management Regulations 2026
In April 2026, National Treasury published the Draft Capital Flow Management Regulations (CFMR) for public comment. If gazetted in their current form, they will repeal the Exchange Control Regulations in their entirety, regulations that have been in force since 1 December 1961. The enabling statute remains the Currency and Exchanges Act of 1933, but the CFMR represents the most comprehensive overhaul of South Africa’s capital flow architecture in over six decades.
The name change is not cosmetic. “Exchange control” implies restriction at the point of transaction. “Capital flow management” implies calibrated oversight of movement across borders. Whether that distinction proves substantive in practice will depend largely on where Treasury sets the “determined thresholds” that now replace every hard-coded rand limit in the old regulations: amounts that will be set and updated by Gazette notice without requiring further regulatory amendment. The SDA and FIA amounts that practitioners have long worked with are not in the CFMR itself; they will follow in separate notices.
The most consequential structural addition is the formal incorporation of crypto assets into the capital flow framework. The CFMR defines crypto assets as capital, explicitly not currency, and explicitly not foreign currency, and subjects them to the same permission framework that governs cross-border foreign currency flows. A new category of regulated intermediary, the “authorised crypto asset service provider” (authorised CASP), mirrors the authorised dealer construct for crypto rails. Above the determined threshold, transactions in crypto assets, buying, selling, borrowing, lending, must be conducted through a Treasury-authorised CASP. The Standard Bank v SARB uncertainty, which turned on whether crypto fell within legacy exchange control definitions, is resolved by the CFMR through explicit inclusion rather than judicial interpretation.
The declaration regime is equally significant. Any person who acquires, controls, or becomes entitled to sell crypto assets above the threshold must declare this to Treasury within 30 days. Declared assets may not be sold, transferred, or disposed of without permission. Sending crypto to an offshore wallet or exchange constitutes an export of capital subject to the same pre-approval requirements that apply to other cross-border capital flows. The enforcement architecture goes further than most practitioners will have anticipated: if crypto assets are forfeited to the State, the owner is legally required to surrender all passwords, PINs, and access codes on written demand. Self-custody provides no insulation from enforcement reach.
A formal regularisation process for historic contraventions is available under Regulation 30, which explicitly states that “foreign property includes crypto assets”. Persons with undisclosed offshore crypto holdings may apply to regularise their position through full disclosure, a sworn affidavit, and payment of a levy of up to the full market value of the assets. For clients who have accumulated crypto offshore under the assumption that it sat outside the exchange control framework, this window deserves serious attention before the CFMR is gazetted.
From our position at Kuda FX, holding a CASP licence, the CFMR creates both an obligation and an opportunity. The obligation is to confirm, once Treasury publishes the authorisation criteria, whether our existing FSCA licensing satisfies the CFMR’s Treasury authorisation requirement or whether a separate application is needed. The opportunity is that the framework being built around crypto capital flows requires exactly the kind of authorised intermediary that a licensed CASP represents. Clients who use crypto as part of their cross-border payment or treasury activity will need an authorised counterparty; that is a service we are positioned to provide.
Progress, or catch-up?
Taken together, these changes (the SDA adjustment, inward loops, trust-to-trust distributions, and now the CFMR) point to a system that is gradually shifting from attempting to strictly control capital flows toward managing and monitoring them more effectively. That shift is necessary and, in many respects, overdue. At the same time, the pace of change remains measured, and in some cases reactive, relative to the speed at which global financial markets and technologies are evolving.
The CFMR is the clearest illustration of this dynamic yet. It is architecturally complete: new definitions, new intermediary categories, new enforcement powers, new declaration regimes. But it is operationally hollow until Treasury publishes the threshold values, the CASP authorisation framework, and the class exemptions that will determine how the rules apply in practice. The framework arrives before the detail, as has been the pattern throughout this period of reform.
Exchange control is not being removed, and it is unlikely to be any time soon. What is happening instead is a gradual loosening at the edges, driven less by pure policy intent and more by practical necessity, and now, for the first time, a wholesale architectural replacement. The question is whether the detail that follows will be sufficient to keep the framework relevant in an environment where capital is increasingly mobile, digital, and difficult to contain within systems designed for a different era.
Kuda FX, part of the Kuda Holdings group, is a registered Financial Services Provider (FSP 46310) and authorised foreign exchange intermediary, holding a CASP licence and subscribing to SAATA’s FX Global Code.
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