Payment-type activities involving crypto assets that meet the definition of “intermediary services” in the Financial Advisory and Intermediary Services Act require a licence under section 7(1) of the Act, the South African Reserve Bank and the Financial Sector Conduct Authority say in a Joint Communication.
The communication, released on 29 May 2026, also clarifies that crypto assets used for domestic payment purposes are not considered payments in terms of the National Payment System Act (NPS Act), fall outside the application of that Act, and are neither money nor funds for purposes of that framework.
The SARB’s National Payment System Department, together with other relevant regulators, is conducting analytical work to explore the regulatory treatment of crypto assets for payment purposes as the market continues to evolve.
The communication is limited to crypto assets used for domestic payments in South Africa. This includes payment for goods and services, as well as person-to-person, person-to-business and business-to-business transactions. It does not extend to cross-border payments. For purposes of the communication, crypto assets include stablecoins.
Payment activities and intermediary services
The FSCA’s declaration, on 19 October 2022, of crypto assets as a financial product applied the requirements of the FAIS Act and its subordinate legislation to a narrow subset of crypto-related activities: advice and intermediary services. It did not legitimise crypto assets as “currency” or any other form of acceptable tender.
As a result of the declaration, any person who, as a regular feature of business, renders financial services in relation to crypto assets must either be authorised under section 8 of the FAIS Act as a financial services provider or be appointed as a representative of an authorised FSP under section 13 of the Act, and must comply with the applicable FAIS requirements.
In respect of crypto assets, the activities covered by the FAIS framework include administration, safe custody, trading on behalf of a client, providing trading platforms, sales, marketing, and advice.
“Financial services governed by the FAIS Act may also be deemed to occur when a customer transfers crypto assets to a merchant in exchange for goods or services, an activity resembling a payment transaction, specifically when this process is facilitated by an intermediary,” the Joint Communication says.
“This would always be the case, meaning there is always one or more intermediaries needed to facilitate a payment-type transaction between the crypto asset payer and payee, unless the transaction is done in a decentralised environment (known as decentralised finance or DeFi) through the use of decentralised protocols.
“Therefore, services that qualify as ‘intermediary services’ or ‘advice’ under the FAIS Act will fall within the scope of regulated financial services. Intermediaries performing these services must be licensed by the FSCA in terms of the FAIS Act.”
The communication distinguishes intermediary-led activity from peer-to-peer transactions that rely only on decentralised protocols. Where no intermediation or advice is provided, there is no obligation for any party involved in a decentralised transaction to be authorised as an FSP. From a FAIS perspective, this is equivalent to a payer and payee transacting in cash, where no third party is needed to facilitate payment.
However, the communication points out that crypto assets can change utility in the hands of a financial customer. It provides the example of crypto assets that may initially serve as an investment vehicle and later be used to purchase items in retail stores.
“Where ‘intermediary services’ are provided as defined in the FAIS Act, regardless of the purpose for which the crypto assets are used […], the person providing the intermediary services (facilitation) must be licensed under the FAIS Act.”
The communication states that licensed crypto asset service providers (CASPs) must adhere to all applicable requirements of the FAIS Act and its subordinate legislation.
A licence granted by the FSCA under the FAIS Act does not include the regulation, supervision, and oversight of crypto assets used for payments under the NPS Act, which remains subject to further policy and regulatory development by the SARB.
Furthermore, CASPs must communicate “clearly and unambiguously” with customers regarding the limited scope and nature of the activities for which they are licensed by the FSCA (noting that these activities do not constitute legal tender).
Why crypto assets fall outside the NPS framework
The communication says the national payment system (NPS) encompasses the payment process from payer to beneficiary and is a core part of the country’s monetary and financial system.
In explaining why crypto assets fall outside the NPS framework, the communication says the NPS Act defines a “payment system” as a system that enables payments to be effected or facilitates the circulation of money. Although the term “payment” is not separately defined in the Act, the SARB has interpreted and applied it to payments in the form of money or funds, in line with the definition of a payment system. Because a crypto asset is neither money as defined in the NPS Act nor funds, the communication says it does not meet the SARB’s interpretation of payment.
The communication also states that crypto assets do not have legal tender status. It says this is in line with international practice and supports monetary stability.
In the case of unbacked crypto assets such as Bitcoin, the communication adds they are not well suited to perform the functions of money – as a unit of account, means of exchange and store of value – and are not recognised as legal tender in the SARB Act.
Risks identified by the SARB
The communication states that crypto assets pose risks to the NPS. It identifies the volatility of the crypto asset market – particularly outside the stablecoin market – as one of those risks, saying this has made it difficult to consider many crypto assets a safe store of value and that they are generally viewed as speculative investments.
It also points to the possible emergence of parallel, unregulated, and fragmented payment systems if crypto assets were to gain widespread adoption. In addition, the communication says the NPS could become less efficient because many crypto assets do not offer interoperability or central clearing, which may require users to register with multiple CASPs to transact using different tokens or wallets.
Other risks identified in the communication are operational and cybersecurity risks, including fraud, cyberattacks and extortion, as well as possible risks to financial stability if the use of crypto assets expands and exposures to regulated financial institutions and the broader economy increase.
Monitoring and future regulation
The communication says monitoring crypto assets for payment purposes assists in assessing market size, composition, and user behaviour. It adds that the SARB continues to monitor crypto market developments and may conduct further targeted research and engagement to deepen its understanding of the use, adoption, and business models associated with crypto payment-related activity.
It also states that the revision of the NPS Act will include provisions that would enable the SARB, at its discretion, to declare and regulate payment instruments other than money, such as crypto assets, should a compelling case arise.
The communication distinguishes here between different categories of crypto assets. It says the SARB is unlikely to consider unbacked crypto assets as payment instruments because they lack supporting assets, are highly volatile and are generally not well suited to the core functions of money.
By contrast, the communication says stablecoins are designed to maintain a stable value through reserve assets and may offer redemption into fiat currency at face value. It says this gives stablecoins some characteristics of digital money and the potential to be adopted as payment instruments. The communication adds that the Intergovernmental Fintech Working Group is analysing the use cases of rand-pegged stablecoins to inform an appropriate policy and regulatory response.
The communication also states that the SARB is interested in testing domestic stablecoin payment use cases in the regulatory sandbox. At the same time, it says foreign currency-pegged stablecoins may create the risk of currency substitution, or “dollarisation”, which could weaken monetary policy transmission. On that basis, the SARB says it is unlikely to consider foreign currency-pegged stablecoins as payment instruments for domestic transactions.
