South Africa’s central bank says the country’s booming crypto market has grown too big to ignore — and may now pose a real risk to the financial system.
In its latest Financial Stability Review (2025), the South African Reserve Bank (SARB) highlighted major concerns over the rapid rise of cryptocurrency adoption and the increasing reliance on U.S. dollar–pegged stablecoins for everyday trading.
Crypto participation in South Africa has surged to 7.8 million registered users across the nation’s top trading platforms as of July. Exchanges are currently holding around $1.5 billion worth of digital assets for clients — a scale that regulators say could amplify economic vulnerabilities.
A Shift Toward Stablecoins
The report reveals a notable change in how South Africans trade crypto. Since 2022, stablecoins like USDT and USDC have overtaken Bitcoin and other major tokens as the preferred way to move funds on local platforms.
While Bitcoin, Ethereum, XRP, and Solana remain actively traded, the central bank says stablecoins are gaining ground fast because they offer lower price swings and a more convenient bridge to U.S. dollars.
However, SARB warns that these advantages come with a downside:
Crypto’s borderless nature makes it easier to bypass capital controls — rules designed to manage money flowing in and out of the country.
Regulatory Gaps Raise Red Flags
South Africa currently has no dedicated framework to oversee global stablecoins, and only partial regulation covering other crypto assets — a gap also emphasized by the Financial Stability Board in late 2024.
The concern:
Without clearer oversight, the sector could continue growing unchecked, leaving regulators unable to spot risks before they spread into the broader financial system.
The bank believes this combination of rapid expansion and limited control already represents a material financial stability risk.
Regulators Not Fully Aligned
Interestingly, other agencies have taken a more progressive approach. In 2022, the Financial Sector Conduct Authority officially recognized cryptocurrencies as financial products and issued licenses to several exchanges.
But SARB remains cautious. Even back in 2017, then–deputy governor Francois Groepe warned that issuing a state-backed digital currency would be “too risky” at the time.
A Call for Stronger Policy Action
With millions of South Africans turning to digital assets and stablecoin use soaring, the central bank is urging the government to step up coordination and develop a comprehensive national crypto strategy.
The message from SARB is clear:
Crypto adoption isn’t slowing down — and without stronger rules, financial stability could be tested in the years ahead.
Also Read: Texas Takes Major Step Toward First State Bitcoin Reserve
