Ina Opperman
Business Journalist
2 minute read
23 Jun 2021
3:46 pm

This is why you cannot buy crypto with your credit card

Ina Opperman

South African investors are wondering why they cannot buy crypto from foreign exchanges with their credit cards.

Picture: iStock

Exchange control regulations bar investors from using their credit or debit cards to buy crypto currencies from a foreign crypto currency exchange, but they are allowed to use these cards to buy crypto currencies from a South African exchange.

According to regulation 10(1)(c) of the Exchange Control Regulations, nobody can enter into any transaction where capital or any right to capital is directly or indirectly exported from the country, unless they have permission from the Treasury and in line with Treasury conditions.

The Currency and Exchanges Manual for Authorised Dealers (CEMAD), grants exemptions to the exchange control regulations for transactions that are allowed, without requiring specific authority from the Treasury and consequently, by delegation, the financial surveillance department of the South African Reserve Bank (Sarb).

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Using debit or credit cards for foreign travel

According to section B.16(A) of CEMAD, all credit and debit cards including co-branded cards issued by authorised dealers, as licensed by American Express, Diners Club, MasterCard or Visa can be used outside the country subject to the provisions of subsections D and E and provided that all outward transactions are reported in terms of the reporting system.

Section B.16(D)(i) of CEMAD gives South African residents the right to use up to 100% of their authorised discretionary allowance or the remaining balance when travelling overseas.

Using debit or credit cards for buying online

Section B.16(E)(i) of CEMAD states gives South African residents or entities the right to make permissible foreign currency payments for small transactions such as paying for goods online using your credit or debit card. However, according to Sarb, buying crypto assets from a foreign crypto asset exchange is not regarded as a payment for imports.

Buy local

In terms of current exchange control policy, South African residents are not precluded from buying crypto assets from local crypto asset exchanges with their credit and/or debit cards in South African Rands because these transactions do not fall within the ambit of the Exchange Control Regulations.

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