As a supporter of bitcoin, I’d like to know if the companies I work with support this technology. Following on from my previous blog post, First National Bank, How Can We Unbank You?, I thought it would be fair to give the banks a chance to respond and hear what their official cryptocurrency policy is. This was my standard request to each major bank.
Hi there,
I’ve recently written a blog article about how FNB unbanked me for dealing with cryptocurrency.
https://louisnel.co.za/blog/first-national-bank-fnb-how-can-we-unbank-you/
In a follow-up article I’d like to give the banks a chance to respond to my article with specific comments or just in general about your bank’s policy on cryptocurrency.
Regards.
Louis Nel
Their responses are as follows:
Table of Contents
ABSA
We continue to follow the rise of cryptocurrency, also called virtual currency, with interest.
We participate in regular discussions as part of a working group that consists of regulators, cryptocurrency traders and related stakeholders in South Africa to share the opportunities and challenges with regards to cryptocurrency and other digital and technological developments.
We carefully consider issues relating to cryptocurrency – including high volatility, increasing incidents of fraud and the absence of a robust legal and regulatory framework for governing cryptocurrency transactions in Africa and most countries around the world – on an ongoing basis.
The absence of an equivalent and effective legal, regulatory and supervisory regime leads to elevated levels of risks to both the bank and our customers. Accordingly, we limit our appetite for and our activities in the cryptocurrency space with most activity stemming from enabling our retail customers as they buy and sell cryptocurrency.
We recognise that cryptocurrency may play a much bigger role in financial markets in the future and we continue to play an active role in contributing to that debate and also to keep a close watch on regulatory and other developments.
ABSA spokesperson
First National Bank
As part of the banking industry, FNB continues to monitor the progress in creating a regulatory framework for Virtual Currency Exchanges.
The bank does not facilitate Virtual Currency trading by Exchanges and/or intermediaries.
However, our individual customers are not prohibited from trading in Virtual Currency, and we exercise our responsibility to perform enhanced due diligence on these transactions.
FNB firmly supports the work of regulatory authorities in building a sustainable regulatory framework in South Africa and will continue to evaluate any developments in line with its risk appetite.
The bank is committed to ensuring that its bank accounts are utilised and managed in accordance with all relevant laws.
FNB Media spokesperson
Standard Bank
Standard Bank follows internal policies to onboard clients from all different sectors, which policies are based on the bank’s risk appetite and the current regulatory framework. These policies are for internal use only.
The activities of our clients in relation to the externalization of funds and/or any cross-border transactions are governed by the Financial Surveillance Department of the South African Reserve Bank (“FinSurv”).
As it concerns crypto assets activities by residents, there is currently no regulatory framework, however we would refer you to the frequently asked questions on the FinSurv’s website which provides details of the position held by the FinSurv in respect of Crypto Assets. Please access the page on Crypto Assets from the below link for more details:
https://www.resbank.co.za/en/home/what-we-do/financial-surveillance/FinSurvFAQ
We would also wish to refer you to the latest developments on the development of the regulatory framework on crypto assets by the IFWG, the details thereof can be found on the below link:
Ross Linstrom – Standard Bank Media Relations
Nedbank
Cryptocurrencies are an unregulated and risky asset class, and we would advise all our clients to be cautious in any dealings in crypto. In particular, in a regulatory environment where banks are regularly inspected and fined for administrative breaches of exchange control and anti-money laundering rules (even if there is no evidence of actual anti-money laundering taking place), it is a concern that cryptocurrencies remain unregulated due to exchange control and money laundering risks that they pose. That said, we are committed to innovation and harnessing new trends and technology in the financial services and banking sectors. This is however done on the basis of solid risk management, complying with regulatory frameworks, and protecting our clients. We are keeping a close eye on the developments in the cryptocurrency ecosystem and are fully committed to work with the relevant regulatory bodies in this regard.
Annaleigh Vallie – Head of Corporate Communications at Nedbank
Discovery Bank
Transactions related to Crypto assets are dealt with as per the rules stated in the Currency and Exchanges Manual for Authorised Dealers issued by the SA Reserve Bank.
The rules are as follows:
Section B.2(B)(i)(r) states the following:
“ (r) No South African debit, credit and virtual card may, however, be used to fund a foreign currency account at an Authorised Dealer or a bank abroad, nor may international trading accounts of private individuals be funded using South African credit, debit and virtual card transfers. Online international trading accounts, inter alia include trading global currencies against each other, trading a contract for difference, trading in foreign stocks, trading commodities including crypto currencies and/or trading foreign indices using an online trading platform of the broker concerned.”
Section B.16(E)(v)
(v) Cardholders should note that South African credit, debit and virtual cards may not be used to fund any international trading accounts, including crypto currency trading accounts.
Some history on what we did to comply with the rules referred to above:
1. The SARB has only issued the above rules in writing on 23 February 2022, however it was a known fact that the SARB did not want customers to use cards for investment purposes since the Single Discretionary Allowance and Capital allowance limits could not be managed properly with card transactions.
2. The SARB has always queried on-line card transactions above R50,000 per transaction with all Authorised Dealers, including Crypto assets and investments as per Section B.16(E) of the Currency and Exchanges Manual for Authorised Dealers.
3. We at Discovery Bank has decided that we will comply with the R50,000 transaction limit and that we will in addition comply to the unwritten rule not to allow any on-line Crypto assets and investment transactions using a debit or credit card irrespective of the value of the transaction.
4. Since 22 May 2021, all on-line transactions above R50,000 per transaction and all Crypto assets and investments irrespective of the value are ejected at the point of sale. We have implemented a rule based on a formula using the POSEntryMode codes and the MerchantCodes to reject the applicable transactions. (There was a major increase in Crypto arbitrage transactions during August 2020 industry wide and there was no option to take action against these transactions – some customers have used their full SDA allowance in 10 transactions! @R100,000 each)
5. Customers identified who were involved in Crypto asset transactions and investments were advised that these transactions are not allowed.
Since the rules related to Crypto Assets and investments were eventually published by the SARB on 23 February 2022, Crypto assets and investments can be effected via EFT payments only, which can be done via the App provided the customer has a sufficient SDA limit/ CA limit available. On-line card transactions are still not allowed.
With regard to the comment on the Blog, I am not going to comment on it except that we have applied the rules as per the SARB and that these transactions are not possible with a card since 22 May 2021.
Nicolene De Koker – Social Media Manager at Discovery Limited
Bank Zero
We allow payments to local crypto exchanges.
We don’t allow cross-border payments to international crypto exchanges, as per Excon rules.
We pro-actively prevent these cross-border crypto transactions from happening, so that a customer cannot accidentally make a payment which breaks Excon rules.
Lezanne Human – Co-founder of BankZero
TymeBank
Hi Louis, thanks for getting in touch. Please note that with TymeBank you may not use your account, directly or indirectly, for trading in foreign currency, cryptocurrency, or for funding foreign currency trading or cryptocurrency accounts, unless approved by the Reserve Bank.
Social media spokesperson for TymeBank
Capitec
Capitec responded to email correspondence, but no response was received in time for publication.
Investec
Investec responded but declined to comment.
Thoughts
None of the banks commented on my blog post specifically apart from Discovery Bank.
Mercantile Bank, a Capitec subsidiary, facilitates forex purchases for bitcoin arbitrage via its bank accounts, according to personal experience. The Capitec brand itself may be risk averse, but I’d like to know what their policy is on the subject.
What is clear is that there is still a lot of confusion surrounding cryptocurrency regulation.
