Crypto Services
Stablecoin Advisory Services
MDB Law extends its fintech-first legal and compliance expertise to support stablecoin operators in navigating regulatory, operational and cross-border challenges. As with our ADLA, ODP and CASP clients, we combine deep regulatory knowledge with hands-on technical and operational testing, ensuring that proposed stablecoin models are not only regulatory-compliant, but also operationally viable.
Transaction Flow & Model Viability
We begin each engagement with a preliminary transaction flow assessment to evaluate the feasibility of your proposed stablecoin model. This early-stage work allows us to:
- Define and document key mechanics and definitions.
- Establish foundational components for a regulatory framework.
- Align operational, legal and technical structures for both clients and regulators.
We continue to work closely with clients during the testing and refinement of issuance models, including hybrid or multi-jurisdictional approaches. Our support extends to onshore/offshore holding strategies, reserve design, liquidity stress-testing and proactive regulator engagement to clarify the treatment of offshore-issued stablecoins.
Licensing & Regulatory Compliance
Our team assesses issuance and operational models, including:
- Stablecoin minting and redemption against fiat-backed reserves.
- Treasury management and reserve oversight.
- Wallet architecture and onboarding flows.
In South Africa, stablecoin issuance alone does not trigger licensing under the FAIS Act. However, certain linked activities (wallet custody, private key management, onboarding, price indicators or on/off-ramping) may fall within FSCA’s 2022 Declaration of Crypto Assets as a Financial Product.
Where applicable, MDB Law guides clients through the process of securing the appropriate Financial Services Provider (FSP) licensing (Category I or II), ensuring obligations are scoped accurately and compliance documents reflect the correct licensing position.
FX & Exchange Control Strategy
Stablecoin projects often intersect with cross-border payments and exchange control frameworks. MDB Law helps clients:
- Evaluate treasury and reserve strategies for alignment with SARB rules.
- Test cross-border flows against the ADLA Manual and remittance categories.
- Clarify whether blockchain-based cross-border payments fall outside conventional forex classifications.
- Prepare regulator-facing arguments that distinguish stablecoin flows from foreign exchange remittances.
We also assess integration with OTC desks and crypto exchanges, ensuring that off-chain liquidity and redemption processes are tested for compliance.
Operational Risk & Compliance
Every stablecoin model must align with AML/CTF requirements and maintain transparent flows of funds. We assist in mitigating risks across:
- Vertical Integration & Conflicts of Interest: Safeguards for issuers who also act as custodians, exchanges, or wallet providers. Includes governance segregation, independent audits and external dispute mechanisms.
- Future Regulatory Triggers: Anticipating enhanced oversight of algorithmic, multi-currency or basket-backed models.
- Liquidity Risk Management: Preparing issuers for potential mandates on reserve ratios, stress testing, redemption guarantees and reserve disclosure.
- Bank Reserve Holdings: Structuring relationships with commercial banks that may face prudential review and supervisory capital adequacy conditions.
Holding Company & Structuring Considerations
Stablecoin issuers often operate through holding companies that manage controlling interests in issuer and group entities. We advise on:
- Beneficial ownership reporting.
- Legal and tax implications of offshore holdings.
- Withholding tax and repatriation strategies.
The MDB Law Advantage
As with our #ADLAstack and #ODPstack, we have developed the #Stablecoinstack, a bespoke toolkit that provides:
- End-to-end application roadmaps.
- Regulatory and operational frameworks.
- Technical flow diagrams.
- Hybrid model guidance for local, offshore or blended structures.
We actively engage regulators, test transaction flows, and design reserve and treasury models aligned with both local guidelines and international best practice.
Whether you are building a new stablecoin issuance platform, exploring hybrid reserve structures, or stress-testing cross-border payment use cases, MDB Law is ready to become your legal and compliance partner in stablecoin innovation.