E01 - Is South Africa ready for Bitcoin as a Treasury Asset?

South African firms are beginning to think about Bitcoin on the balance sheet!

I just got off a call with a technology supplier to independent financial advisors in South Africa. He shared the growing demand he’s hearing from his clients - for a simple solution to allow their clients to access Bitcoin safely.

That conversation isn’t unique. Sure, I know many smaller and medium sized companies who are holding Bitcoin. But this call confirmed that every month more firms, fiduciaries, and CFOs are quietly asking the same question: how do we add Bitcoin responsibly?

For me, it was an exciting moment - after all - Simple Bitcoin (Simpl₿) was built for this.

When we talk about corporate or institutional treasury assets, the usual suspects are cash, government bonds, or gold. But increasingly, they're asking: could Bitcoin play a legitimate role in the treasury-reserve portfolio in South Africa?

Why the Question is Timely

The South African investment landscape is shifting fast. Over 200 firms now hold a CASP licence, yet many still have no idea what to do with it. At the same time, new entrants like the Africa Bitcoin Corporation have forced regulators to clearly define how crypto assets are treated under South African law.

The FSCA now recognises crypto assets as financial products under FAIS - which means regulated advice, compliance, and reporting obligations apply. The JSE has also begun setting out internal control and custody requirements for any listed entity with digital asset exposure.

Both frameworks point to one conclusion: Bitcoin must be held in secure, verifiable self-custody. The FSCA’s language around “control and safekeeping” mirrors international best practice - ensuring assets are owned directly by the client or an authorised representative under their control. For Bitcoin, that means owning the private keys - ideally through a multi-signature vault with clear governance and recovery procedures.

Awareness of Bitcoin as a legitimate investment is growing across corporate South Africa, especially among firms prioritising long-term wealth preservation, currency-hedge strategies, and alternative asset allocations. Bitcoin is finally worth analysing - seriously and strategically.

Pros of Treating Bitcoin as a Treasury Asset

1. Store of Value Hedge: For organisations concerned about currency debasement, especially in our emerging-market context, Bitcoin’s fixed supply and global nature act as a non-sovereign hedge against inflation and political uncertainty.

2. Diversification: Bitcoin shows low correlation to most traditional asset classes. For treasuries concentrated in cash, bonds, or local equities, even a small allocation can improve portfolio resilience.

3. Growth Potential: Historically, Bitcoin has delivered outsized returns (with volatility) compared to traditional assets. A measured allocation can add asymmetric upside to a treasury portfolio.

4. Regulatory Clarity and Access: With FSCA-licensed crypto providers and JSE-listed products now available, South African firms can gain Bitcoin exposure through compliant channels. Still, bearer-asset self-custody - as implemented at SimplB - remains the gold standard for direct ownership and zero counterparty risk.

Cons and Key Risks

1. Volatility: Bitcoin’s short-term price swings can be uncomfortable for treasurers seeking predictability. The market cycles with rapid price climbs and elongated stagnation or drawbacks are worth understanding. Allocations must fit the organisation’s tolerance and time horizon.

2. Regulatory and Tax Uncertainty: While ownership is legal, the practical accounting and tax frameworks are still evolving. Clarity is improving, but treasurers must stay current on SARS treatment, IFRS classification, and audit guidance.

3. Liquidity and Market Structure: Compared to large government bond markets, Bitcoin markets are still less mature. For large (>R1billion) treasury allocations especially, liquidity risk and price-impact do matter.

4. Custody and Operational Risk: Bitcoin demands proper key management, wallet design, and disaster recovery. Without structured governance, mistakes can be costly. SimplB solves this through multi-signature vaults and compliant key-management frameworks.

5. Mandate Alignment: Many treasuries are governed by mandates focused on capital preservation and low-risk assets. Bitcoin as an alternative asset must be approved through board-level policy.

Practical Considerations for South African Treasuries

• Start Small: Most clients start with a 1-5% allocation as a sensible entry point. Position sizing matters more than timing. Your understanding of the asset also impacts your number, with our most knowledgable clients allocating 10-20% to start.

• Policy and Governance: Define classification, custody, audit treatment, and risk thresholds upfront.

• Custody Design: Decide between regulated custodians, 2-of-3 multi-sig vaults, or in-house cold storage. JSE guidance suggests that at least 90% of assets should be kept offline - a standard worth noting and paying attention to.

• Rebalancing Policy: Plan how to act if Bitcoin’s price spikes or falls significantly. Treasury discipline applies as much to Bitcoin as to any other asset.

• Reporting and Compliance: Align with FSCA requirements, FAIS categories, and SARS capital-gains protocols.

• Stakeholder Education: Bring boards and auditors along the journey. Explain the rationale, risk management, and oversight in simple language.

My View

In my experience working with clients who take Bitcoin seriously - not as speculation but as long-term ownership and wealth preservation - Bitcoin deserves a defined place in South African treasury portfolios.

It must, however, be approached wisely: with modest allocations, strong governance, and a five-year-plus outlook. The balance sheet remains first and foremost about control, security, and value preservation and that is exactly where Bitcoin excels when held correctly.

For any treasury team exploring this path, the key question remains: what is the purpose of adding Bitcoin to your reserves?

If it’s to chase short-term price movement, alignment will be weak. But if it’s to hedge long-term currency risk, diversify reserves, and hold a non-sovereign store of value, then Bitcoin deserves serious consideration.

If you’d like to discuss how a Bitcoin-reserve strategy could fit your treasury mandate or work through compliant custody options and governance feel free to reach out. I’d also love to hear your assumptions or objections around allocating to Bitcoin in South Africa.

Let me know!

James Caw

Founder and Bitcoin Strategist | SimplB www.simplb.co.za

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SimplB (Pty) Ltd is a Juristic Representative and James Caw is a supervised Representative of CAEP Asset Managers (Pty) Ltd FSP No: 33933 - an Authorised Financial Services Provider. Nothing in this newsletter should be construed as financial advice. Before taking any action speak to your financial advisor.