Rapid growth in users, rising stablecoin adoption, and regulatory gaps push the South African Reserve Bank to flag digital assets as an emerging threat
South Africa’s central bank has raised new concerns over the rapid expansion of digital assets, warning that crypto and stablecoins now represent a meaningful financial stability risk for the country. In its 2025 Financial Stability Review, the South African Reserve Bank (SARB) pointed to surging trading volumes, millions of new users, and regulatory blind spots that could enable capital flows outside traditional oversight.
Crypto Usage Surges Across South Africa
The report highlights that combined user registrations across the country’s three largest crypto exchanges reached 7.8 million by July, with roughly $1.5 billion held in custody by the end of 2024.
The central bank emphasized that the borderless nature of digital assets makes them capable of bypassing South Africa’s Exchange Control Regulations.
SARB wrote that “due to their exclusively digital – and therefore borderless – nature, crypto assets can be used to circumvent the provisions of the Exchange Control Regulations,” underscoring the difficulty authorities face in monitoring cross-border flows.
Stablecoins Become the Dominant Trading Pair
One of the most notable findings in the report is a “structural shift” in how local traders engage with digital assets. Until 2022, Bitcoin and other major cryptocurrencies served as the primary trading pairs on South African exchanges. But the bank reports that USD-pegged stablecoins are now the preferred medium for trading, driven by their lower volatility and increased liquidity.
SARB noted that “stablecoins have become the preferred trading pair on South African crypto asset trading platforms,” signaling a major change in user behavior as stablecoin volume continues to climb.
Regulatory Gaps Raise Concerns About Undetected Risks
The Financial Stability Board, which advises G20 countries, recently highlighted that South Africa has no dedicated framework for global stablecoins and only “partial” regulation for digital assets.
SARB echoed these concerns, warning that without comprehensive rules, “risks may build up undetected,” potentially threatening broader financial stability.
These warnings come despite slow but steady progress from policymakers. The Financial Sector Conduct Authority formally classified crypto as a financial product in 2022, paving the way for licensing and oversight of exchanges.
A Growing Divide Between Regulators and Policymakers
While the central bank maintains a cautious stance, some government entities have taken a more supportive view of crypto development. Licensing frameworks have opened the door for compliant crypto firms, even as the central bank continues to urge stronger safeguards.
With millions of South Africans now trading digital assets and stablecoins becoming deeply embedded in the market, the SARB’s latest report underscores a critical need for comprehensive regulation. As adoption accelerates, the tension between innovation and risk management is shaping South Africa’s next phase of crypto policy.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.