South Africa’s Central Bank said that customers with digital assets shouldn’t be banned “en masse.”
South Africa’s central bank said that banks can now deal with funds linked to digital assets and shouldn’t block all crypto clients randomly.
The South African Reserve Bank (SARB) said in new guidelines released this week that banks in the country “may act as a conduit for funds” related to crypto asset service providers and “may play a role” for customers who want to buy or receive payouts in fiat currency in their bank accounts for the sale of crypto.
Some local banks had already moved to close accounts that were linked to crypto exchanges, citing risk exposures as the reason. In the document that was made public, the SARB said that it knew some banks in the country had blocked clients with ties to cryptocurrency. It also said that a thorough risk assessment is needed but that “wholesale termination of client relationships” threatens financial integrity.
The SARB said that risk assessment doesn’t always mean that institutions should try to avoid all risks.
In June 2021, some South African banks stopped customers from using their credit and debit cards to buy crypto on foreign exchanges. The central bank warned that current rules don’t allow “cross-border or foreign exchange transfers for the explicit purpose of buying crypto assets.”
South Africans, on the other hand, can buy cryptocurrency with their “single discretionary allowance” of up to 1 million rands (about $59,000) or their “foreign capital allowance” of up to 10 million rands ($580,000).
