Clients who choose to buy cryptocurrency on overseas exchanges are having their transactions blocked by South African banks. The decision was triggered by the central bank’s new guidelines for the business. Several Absa clients, for example, have disclosed that they are unable to purchase digital currencies on Binance using their Absa-issued credit or debit cards.
“Temporary lock enabled for online purchases on credit card ending with **0000. You can deactivate it via Absa Online, the Banking App, or by calling the number at the back of your card for help,” Absa is sending to its customers. However, the app does not show any options to unlock such transactions.
Here Is What You Need To Know
- Absa acknowledged that the transactions have been halted since June 19, 2021, due to the failure of numerous foreign cryptocurrency exchanges to comply with local South African legislation.
“In line with the country’s exchange control regulations, purchasing cryptocurrencies on debit and credit cards is not permissible in South Africa,” Absa was quoted as saying in response to the claims. “Given that this is an industry matter and not Absa-specific, we suggest that you approach the SA Reserve Bank for a more comprehensive view.”
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- Similar rules may be found on the website of the South African central bank, which states that crypto purchases with cross-border foreign exchange transactions are not permitted.
“The repatriation of value to South Africa through crypto assets is not permitted as part of an individual’s single discretionary allowance and/or foreign capital allowance,” the Reserve Bank stated. “This is because of the nature of the assets and because the transaction is currently not reportable on the FinSurv Reporting System.”
- Several other banks are prohibiting crypto purchases, although the majority of them apply to all exchanges, not just foreign ones. HSBC even went so far as to remove MicroStrategy equities from its portfolio due to the company’s excessive Bitcoin holdings.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning write