South Africa shifts focus toward payment modernization and wholesale CBDC exploration instead of retail issuance.
South Africa’s Position on Retail CBDCs
The South African Reserve Bank has stated there is no “strong immediate need” for a retail central bank digital currency, emphasizing that improving the national payments system should remain the primary objective. While a retail CBDC is technically feasible, officials noted that current modernization initiatives provide more immediate benefits than launching a new digital currency for public use.
Ongoing efforts to expand non-bank participation and strengthen core payment infrastructure are viewed as higher priorities. The bank added that it will continue monitoring global CBDC advancements and stands ready to revisit its position if future developments require action.
Focus Shifts Toward Wholesale and Cross-Border Innovation
Instead of pursuing a retail CBDC, the central bank is turning its attention to wholesale CBDC experiments and enhanced cross-border payment efficiency. These areas are considered more promising for delivering measurable improvements to institutional transactions and settlement systems.
However, the study identified persistent challenges in the country’s financial landscape, with around 16% of the population still unbanked. For a retail CBDC to be effective, it would need to deliver the convenience, offline functionality, universal acceptance, low cost, and privacy that cash currently provides.
Growing Concern Over Crypto and Stablecoins
Alongside its CBDC assessment, the bank issued renewed warnings about digital assets. A recent report highlighted crypto assets and stablecoins as emerging financial risks, cautioning that they may be used to bypass Exchange Control Regulations, which oversee fund flows into and out of South Africa.
Global CBDC Development Continues to Accelerate
Even as South Africa adopts a cautious stance, global momentum around CBDCs remains strong. According to international trackers, only three countries have fully launched a CBDC—The Bahamas, Nigeria, and Jamaica. Meanwhile, 49 countries are conducting pilots, 20 are actively developing digital currencies, and 36 are still in the research phase. The United States, on the other hand, has paused its CBDC plans.
South Africa’s approach reflects a deliberate, infrastructure-first strategy, prioritizing stability and modernization over rapid deployment as the global CBDC landscape evolves.
Disclaimer
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