South Africa is proposing very strict regulations on digital currencies, with the possibility of forcing the sale of assets.

The National Treasury of South Africa and the South African Reserve Bank submitted a draft of new regulations to manage capital flows, which may impose very significant restrictions on the use of digital currencies.

The proposal would require individuals to disclose their holdings of digital currencies if they exceed a certain threshold that has not yet been specified, and it may also grant the government the power to force owners to sell their assets in exchange for the South African rand.

Under the draft, investors would not be allowed to buy, sell, lend, or transfer digital currencies above this limit without obtaining prior approval, except through authorized service providers.

Transactions would also be required to specify a clear purpose for using the funds, and any use outside this purpose could lead to mandatory forced resale of the assets.

Cross-border transfers or payments using digital currencies would also be prohibited without official approval.

In addition, the authorities will have broader powers to search individuals, request financial declarations, and seize assets suspected of violating these rules.

Critics believe that these amendments raise serious constitutional concerns related to privacy, property rights, and freedom of association, considering them among the most stringent updates to South Africa’s foreign exchange control system in decades...
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