South Africa should scrap exchange control altogether, according to Simon Dingle, co-founder of rand stablecoin ZARP, who said the country’s capital controls have achieved the opposite of what they were designed to do.
“Ultimately, South Africa has to abolish foreign exchange control,” Dingle told TechCentral. “Unfortunately the damage has already been done, and the policies have achieved the opposite of what they set out to do; instead of preventing capital flight, they have accelerated it.”
That goes considerably further than the position taken in formal industry submissions, which have argued for narrower changes rather than abolition. It comes as the comment period runs on a draft framework that would bar South African companies from moving crypto across the border at all.
National treasury and the South African Reserve Bank published the draft Crypto Assets Manual for cross-border activities on 3 August. Under it, only natural persons may transact offshore in crypto, using the R2-million single discretionary allowance or the R10-million foreign capital allowance. Resident entities “may not enter into crypto asset transactions deemed as import or export of capital”. Comments close on 30 September, and the manual cannot take effect until the Capital Flow Management Regulations, gazetted on 17 April and which drew heavy industry fire, are promulgated.
The cost of staying4
Dingle put the price of the existing regime in terms of businesses that were never built in South Africa.
“Foreign exchange control has cost the South African economy billions, if not more, in lost investment and value being created outside of the country by entrepreneurs that have learnt from the example of Mark Shuttleworth and others that South Africa is a terrible domicile for intellectual property and growing businesses that require early-stage funding,” he said.
“This apartheid-era legislation is now forcing companies and individuals using crypto to consider other jurisdictions too, and the draft crypto legislation in its current form only makes this worse.”
Read: Treasury’s crypto crackdown is a betrayal of Mandela’s promise
Shuttleworth paid R250-million to the Reserve Bank in 2009 under a 10% exit charge when he moved about R2.5-billion offshore, and spent years contesting it. The supreme court of appeal found in his favour, ruling the charge an unlawful tax, but the constitutional court overturned that in June 2015, holding it to be a regulatory measure to discourage capital flight rather than a tax. The exit charge itself had been suspended in 2011.
Of the draft’s provisions, Dingle singled out the treatment of self-custody wallets as the one most in need of rework, calling it “not only misguided, but also unenforceable” and warning it “will massively stifle innovation”.
Under the draft, a transfer from a domestic authorised crypto asset service provider to a non-custodial wallet is one of the trigger points that makes a transaction cross-border – meaning a holder moving their own coins to their own cold storage would be treated as having moved money out of the country.
He also set out the argument the industry is likely to press during the comment period: that a reserve-backed rand stablecoin is not capital leaving the country at all. Regulators, he said, should recognise the difference between tokens “running on transparent, public ledgers, where value remains in South Africa even when stablecoins are transferred internationally, and other crypto tokens that are not backed by currency reserves”. The rand reserves behind a ZARP sit in a South African bank account whoever holds the token.
A different model
Dingle is not a neutral party to the wider argument about how rand stablecoins should be built. ZARP was designed for decentralised finance from the start, in contrast to the institutional consortium model behind ZARU, which launched in February with Sanlam, Luno, EasyEquities and Lesaka Technologies attached.
“My view has always been that decentralised finance has to win if we care about transparency, financial inclusion, privacy, and reducing the harms caused by identity theft and other financial scams and crime,” he said. “If all we do is use distributed ledger technology to recreate the existing financial system, then we have achieved nothing.”
He blamed both sides of the market for where the argument is now, citing “political and other grifters abusing distributed ledger technology for their own benefit, and tactics by financial incumbents that realise the threat DeFi poses to their operations”.
On ZARU’s listing against the dollar on Luno, he was unbothered. “We’re focused on building the most robust stablecoin offering for our partners and their users, which doesn’t leave much time for thinking about our competitors. But kiff for them, I suppose,” he said. “It’s great to see a proliferation of stablecoins validating the hypothesis that gave birth to ZARP several years ago. It turns out we were right, but early.”
ZARP launched in 2021 after being founded by Dingle and Kenny Inggs two years earlier. It is issued by ZARP Stablecoin, which operates as a representative of licensed financial services provider Inves Capital, and its treasury is managed by Old Mutual Wealth, which also injected liquidity into the token in 2023. It runs natively on Ethereum, Polygon, Base, Solana and Gnosis Chain, with liquidity sitting mainly in on-chain pools, and is attested by Kempen Audit. Its dashboard showed R81.5-million in circulation this week. Its crypto asset service provider licence is listed as pending.
‘Overwhelming’
The response to the draft rules from the public and from institutions has been “overwhelming” and has not yet found its way into the text, Dingle said. Treasury and the Reserve Bank have acknowledged as much, noting that comments on the April regulations had not been incorporated into the August manual because of the timing and volume of submissions.
“Our hope is that authorities are giving this commentary the consideration it deserves,” Dingle said, “and that they will come to their senses before crafting final legislation.” — © 2026 NewsCentral Media
