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South African Banks Block Crypto Purchases on Overseas Exchanges


www.financemagnates.com 23 June 2021 09:12, UTC
Reading time: ~2 m

South African banks are blocking transactions of their clients who are opting to purchase cryptocurrencies on international exchanges. The move was prompted by the new rules imposed on the industry by the central bank.

According to a report by local tech news outlet Mybroadband, several clients of the financial services company Absa revealed that they cannot purchase digital currencies with Absa-issued credit or debit cards on Binance.

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“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. The app, however, does not show any options to unlock such transactions.

Absa also confirmed that the transactions have been blocked since last Friday as several international cryptocurrency exchanges do not comply with local South African regulations.

“In line with the country’s exchange control regulations, purchasing cryptocurrencies on debit and credit cards is not permissible in South Africa,” Absa told the publication. “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.”

Central Bank Is Behind the Blockade

Similar guidelines can also be seen on the South African central bank’s website which mentions that it does not allow crypto purchases with cross-border foreign exchange transfers.

“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.”

Binance, however, is determined that it is in compliance with local South African regulatory frameworks.

Several other banks are also blocking transactions for crypto purchases, but most of them are meant for all exchanges and not only the international ones. HSBC even went further to delist MicroStrategy stocks from its offering as the company has too many Bitcoin holdings.

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