Economist Dawie Roodt Warns South Africans May Drop Local Currency as Crypto Rules Tighten

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A South African economist warns that the National Treasury’s proposed crypto regulations are an unenforceable attempt at state control that will ultimately backfire. Economist Dawie Roodt Warns South Africans May Drop Local Currency as Crypto Rules Tighten Key Takeaways - On May 15, the National Treasury defended its new crypto rules against claims of asset seizure in South Africa. - Dawie Roodt warns that the harsh capital rules will backfire, driving 100% of local users to cryptocurrencies and stablecoins. - SA regulators will release a cross-border crypto manual next for public comment to define upcoming rules. The Push Toward Decentralized Tech South Africa’s continued reliance on exchange controls will push citizens toward cryptocurrencies and stablecoins unless the system is dismantled, Efficient Group director and chief economist Dawie Roodt has said. He said the blockchain technology has already made it easier and cheaper for people to move money across borders while giving them more direct control over their assets. The economist insisted that attempts by the National Treasury or the South African Reserve Bank to restrict that shift would ultimately fail, he said. “Don’t these people understand that the world has moved forward, and that there are new technologies? They cannot stop me anymore,” Roodt remarked. Roodt was commenting on Treasury’s proposed Capital Flow Management Regulations, which include new reporting requirements for crypto holders and provisions that critics say could allow the state to expropriate digital assets. As previously reported by Bitcoin.com News, under the proposed regulations, residents holding crypto above an unspecified threshold would be required to declare it and could be compelled to sell it to the government. The regulations will also empower officials to search and seize if they suspect a breach, while offenders face possible jail time. Roodt said such measures are unenforceable because regulators cannot compel people to reveal private keys or access to self‑custodied wallets. “This is such a stupid idea. How are they going to get into my head?” he said. “They want to force me to give them my passwords, and they want to force me to open up my phone or my computer.” He argued that the nature of blockchain technology renders traditional foreign‑exchange controls obsolete. If South Africa does not abolish them, he said, people will increasingly opt out of the rand. “If we don’t, I will stop using the rand and keep on using some other currencies, because there I’ve got more control,” he said. Financial Inclusion vs. State Control The economist said the draft regulations reveal a government mindset focused on control rather than adaptation. “The ideology is that they want to control everything, but it’s very clear to me they don’t understand what we’re doing,” he said. He acknowledged that crypto can facilitate criminal activity but said the benefits — including low‑cost global transfers and access to financial tools for people without banking services — far outweigh the risks. “Imagine people who do not have access to a banking system somewhere in rural Africa, and they start using these stablecoins,” he said. “Now, all of a sudden, they’ve got very low transaction fees, and they can send their money all over the world, 24/7.” Large institutions are already using blockchain for wholesale transactions, he added, noting that Mastercard and Visa have begun investing in stablecoin infrastructure. The National Treasury has rejected claims that the draft regulations are intended to seize private crypto holdings. In a statement on May 15, Treasury said the rules “do not intend to criminalise the possession of crypto assets or to apply the Regulations retrospectively.” A separate draft manual on cross‑border crypto transactions will be released for public comment, outlining which activities qualify as cross‑border flows and what obligations will apply to authorized service providers. Treasury said concerns about forced disposals of crypto, gold or foreign currency are misplaced, adding that such measures would apply only “under limited circumstances, such as where an offence has been committed.”

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