The South African Reserve Bank has identified digital assets and stablecoins as emerging threats to financial stability. The central bank's second Financial Stability Report for 2025 highlights concerns about regulatory gaps as cryptocurrency adoption accelerates nationwide.
South Africa's three largest cryptocurrency exchanges now serve a combined 7.8 million users as of July 2025. These platforms held approximately $1.5 billion in custody by the end of 2024. The rapid growth in user numbers and trading volumes has prompted regulatory authorities to assess potential risks to the financial system.
Number of registered customers. Source: South African Reserve Bank
Stablecoins Dominate Trading Activity
Trading patterns on South African exchanges have undergone substantial transformation since 2022. USD-pegged stablecoins have replaced Bitcoin as the dominant trading pair on local platforms. The shift reflects investor preference for assets with lower price volatility.
Bitcoin, XRP, Ether, and Solana previously served as primary trading vehicles for South African crypto investors. Stablecoins now account for the majority of trading volume on domestic exchanges. The central bank attributes this change to the relative price stability of stablecoins compared to traditional cryptocurrencies.
Breakdown of crypto asset holdings. Source: South African Reserve Bank
Trading volume data indicates a marked increase in stablecoin transactions since 2022. The bank characterizes this development as a structural shift in market behavior. Stablecoins provide traders with a means to transition between positions without needing to convert to fiat currency.
Regulatory Framework Remains Incomplete
The Financial Stability Board assessed South Africa's crypto regulations in October 2024. The international watchdog found no comprehensive framework for global stablecoins. Existing cryptocurrency regulations were deemed only partially adequate.
The South African Reserve Bank expressed concern that risks may accumulate without proper oversight. The digital nature of crypto assets enables users to bypass Exchange Control Regulations. These rules govern capital flows into and out of the country.
Borderless transactions present unique challenges for traditional financial oversight. The bank warned that threats to financial stability could develop undetected without appropriate regulatory structures. Establishing a comprehensive framework remains a priority for monetary authorities.
The central bank's concerns echo previous warnings about the risks associated with digital currency. Deputy Governor Francois Groepe stated in 2017 that issuing digital currencies posed excessive risks. The institution has maintained a cautious stance on crypto innovation.
South African policymakers have adopted a more accommodating position than the central bank. The Financial Sector Conduct Authority designated cryptocurrency as a financial product in 2022. This classification brought crypto businesses under formal regulatory oversight.
The authority subsequently issued licenses allowing crypto companies to operate legally. Licensed firms must comply with financial regulations and consumer protection standards. The licensing regime provides a pathway for legitimate crypto businesses.
