VALR chief executive Farzam Ehsani urged South Africa to lift exchange controls, saying the move would unleash innovation and attract capital, and he questioned the purpose of recently proposed regulatory measures aimed at crypto and cross-border flows.
Ehsani set out his view in comments published by Moneyweb, arguing that tightening controls would run counter to the opportunity he said the country currently had to position itself as a hub for digital asset activity and financial innovation.
SOUTH AFRICA'S REGULATORY DEBATE
Ehsani framed his remarks around the broader debate in South Africa about how to regulate digital assets and manage cross-border capital flows. He pushed back on the idea that stricter exchange controls and tighter crypto-specific rules would solve underlying problems, and asked what exactly those rules were intended to fix.
VALR is a digital asset exchange and payments fintech, and its chief executive made the case that policy choices will shape whether the country attracts entrepreneurs and investors, or drives them to more permissive jurisdictions. His comments highlighted a tension that regulators and market participants have been grappling with: how to enable innovation while addressing risks related to money laundering, consumer protection, and capital flight.
Moneyweb carried the remarks as part of its crypto coverage. Ehsani did not set out a detailed new regulatory proposal, but his intervention added a prominent fintech voice to the conversation about South Africa's exchange control regime and crypto regulation.
MARKET IMPLICATIONS FOR BANKS AND FINTECH
If policymakers were to follow the path Ehsani recommended, the payments and fintech sectors could see a more permissive operating environment for cross-border activity, at least in principle. Easing exchange controls would affect how capital moved into and out of the country, and it would change the compliance and commercial calculus for both local and international firms that interact with South African customers.
Banking institutions and payments companies would remain central to any transition. They would be responsible for implementing controls, conducting due diligence, and managing correspondent relationships. Regulators would need to reconcile any relaxation of exchange controls with existing anti-money laundering and counterterrorist financing obligations, and to clarify which entities would bear supervisory responsibility for the digital asset ecosystem.
Industry participants have presented opposing views in public forums, with some arguing for stronger oversight to mitigate risks, and others urging a lighter-touch approach to preserve competitiveness. Ehsani's comments crystallised the latter position, focusing on the economic upside he said would follow from removing barriers to capital and innovation.
The wider market context included investor appetite for fintech and digital asset infrastructure, and questions about whether South Africa could attract a larger share of that investment. Ehsani framed lifting exchange controls as a lever to draw capital and talent, but he also signalled that clear, proportionate regulation would be necessary to sustain investor confidence.
Whatever direction policymakers take, the debate is likely to involve trade-offs between market openness and regulatory safeguards. Banks, payments firms, and fintech platforms will watch developments closely, because any change to exchange control policy or crypto regulation would reshape compliance requirements and market access for a range of financial services.
Sources: Moneyweb SA