The Financial Sector Conduct Authority (FSCA) and the South African Reserve Bank (SARB) have issued Joint Communication 4 of 2026, it provides important clarification on how crypto assets are treated when used for domestic payment purposes and what this means for licensed Financial Service Providers (FSPs) and Crypto Asset Service Providers (CASPs).
The communication confirms that crypto assets used for payments are currently not regarded as “payments” under the National Payment System Act (NPS Act). Crypto assets are also not recognised as legal tender and are not regarded as “money” or “funds” as contemplated in the NPS Act. Although this means that crypto assets are not currently regulated under payment system laws, FSPs involved in crypto-related activities must still comply with the Financial Advisory and Intermediary Services Act (FAIS Act), especially where advice or intermediary services are provided.
The FSCA confirmed that crypto assets were declared a financial product under the FAIS Act on 19 October 2022. This means that any person or company providing financial services related to crypto assets must either be licensed as an FSP or be registered as a representative for an FSP. According to the FAIS Act this applies to all crypto-related activities, including managing crypto assets, trading, safekeeping, marketing, and assisting clients to buy or sell crypto assets.
The key takeaway for FSPs is that certain crypto payment activities may still be regulated under the FAIS Act if the provision of financial services is involved. For example, if an FSP helps transfer crypto assets between a customer and a business when paying for goods or services, this could be seen as an intermediary service under the FAIS Act. This means the FSP must have the correct authorisation from the FSCA and comply with all FAIS requirements. These requirements include meeting fit and proper standards, providing proper disclosures to clients, maintaining good governance practices, and treating customers fairly.
The regulators also emphasised that the current licensing framework does not mean that crypto assets are recognised as currency or legal tender. Licensed CASPs should therefore not give clients the impression that crypto assets have the same legal status or protection as normal money issued by banks or governments. It is important for CASPs to communicate openly and clearly with clients about the risks involved in crypto assets and the fact that the current regulations provide limited protection.
The communication further highlights risks linked to using crypto assets for payments. These include sudden changes in value, cybersecurity threats, fraud, and risks to the wider financial system. Regulators are still cautious about allowing widespread use of crypto assets like Bitcoin for everyday payments because their value can change quickly and they are mainly used for speculative investment purposes.
The regulators are looking at how stablecoins, especially rand-pegged stablecoins, may be treated in future. Unlike normal crypto assets such as Bitcoin, stablecoins are designed to keep a stable value and may eventually function more like digital money. Because of this, they could become part of future payment systems if proper laws and regulations are introduced. The SARB and the Intergovernmental Fintech Working Group’s (IFWG) are currently studying how stablecoins may be used and are considering testing them in regulatory sandboxes to better understand the possible benefits and risks and to provide the SARB an opportunity to understand and assess payment applications over the medium term, which may assist in developing an appropriate regulatory, supervisory and oversight framework.
For FSPs operating in the crypto asset sector, it is important to remain aware of relevant regulatory requirements and to ensure continued adherence to the requirements of the FAIS Act. FSPs should regularly check whether their crypto-related activities qualify as financial advice or intermediary services under the FAIS Act. They should also make sure that their licenses, operational processes, client disclosures, and risk management measures remain suitable and compliant with current laws.
FSPs should also remain alert regarding future regulatory changes. The communication explains that amendments to the NPS Act may in future allow the SARB to regulate crypto assets as payment instruments in certain situations. These changes may still take time, but regulators are working towards a more complete regulatory framework for crypto assets.
In conclusion, the Joint Communication reminds FSPs that even though crypto assets are still developing, existing regulatory obligations already apply in many cases. FSPs involved in crypto asset activities should not assume that they have no compliance duties simply because crypto assets are not yet fully regulated under payment system laws. Good governance, awareness of regulatory requirements, and clear communication with clients will remain very important as crypto regulation continues to develop.