Luno CEO: South Africa Stablecoin Rules Risk $33T Lockout

Luno CEO James Lanigan warned that South Africa's proposed Capital Flow Management Regulations could lock local businesses out of the $33 trillion stablecoin market, crippling cross-border payments and investment flows.

Lanigan told AlphaScala the draft rules from the National Treasury and the South African Reserve Bank (SARB) would inadvertently block South African companies from using stablecoins for international settlement. The warning comes as the public comment deadline approaches June 30, 2026. The initial May 18 deadline was extended after an industry backlash over severe enforcement provisions including potential prison sentences and asset seizure fears.

The draft regulations would overhaul the country's decades-old exchange control regime. SARB and Treasury later clarified they would not criminalize asset ownership or apply rules retrospectively. Lanigan said the deeper threat is to the B2B payment layer.

"Stablecoins are already settling more value annually than Visa and Mastercard combined," Lanigan said, citing Bloomberg data showing $33 trillion in stablecoin payments and blockchain transfers in 2025 – nearly double Visa's $17 trillion. "This is driven by the use of crypto by businesses, in addition to ordinary investors."

The core problem is operational uncertainty. The National Treasury and SARB acknowledged that the exact definition of "cross-border crypto transaction" will only appear in a subsequent draft instructional manual. Until that framework drops, businesses are commenting on bare regulations with no operational context.

Without standardized banking reporting codes for stablecoin transactions, local firms hesitate to adopt them, fearing noncompliance. Lanigan said businesses approach Luno almost daily looking for stablecoin solutions to navigate currency liquidity crises across the continent. Leaving these rules ambiguous actively reduces payment flows into South Africa, harms local businesses, and shrinks the national tax base.

Lanigan described the risk precisely: "Local stablecoins are critical infrastructure to support domestic payments and treasury flows, while dollar stablecoins provide a fast bridge to global commerce and cross-border settlement. Together, they reduce friction, lower costs, and make money move more efficiently at home and abroad."

The current draft could prohibit local enterprises from using stablecoins for cross-border payments or repatriating funds. That would hit South African multinationals operating across Africa hardest – where physical dollar shortages make traditional banking transfers slow and expensive.

As BlackRock, JPMorgan, Visa, and Société Générale move infrastructure on-chain, South Africa sits at a regulatory crossroads. Japan recently passed a crypto bill that paves the way for ETFs and tax cuts, signaling a different approach. The gap between progressive and restrictive frameworks is widening, and capital flows follow the clearer rules.

"It is essential that South Africa moves, through thoughtful revision of the draft Capital Flow Management Regulations, to unlock the economic growth potential of stablecoins," Lanigan urged. "Without the integration of stablecoins into the local financial mainstream, South Africa will limit its competitiveness in the modern economic system."

The comment period closes June 30. The subsequent instructional manual will determine whether stablecoins become infrastructure or contraband.