South Africa’s central banking authority has issued a strong warning: the rise in crypto and stablecoin usage could endanger the stability of the nation’s financial system. The South African Reserve Bank (SARB) flagged “crypto assets and stablecoins” as a new source of systemic risk. As adoption surges and regulatory oversight lags, authorities say there is growing urgency to act.
Why the Central Bank Is Alarmed
🚨 Regulatory Gaps and Exchange Control Evasion
In its 2025 Financial Stability Review, the SARB noted that crypto assets’ fully digital and borderless nature allows them to skirt around existing exchange-control laws. This helps them bypass rules designed to manage foreign capital flows — a major concern for regulators tasked with safeguarding monetary stability.
Because there is no comprehensive regulatory framework covering global stablecoins, authorities worry that risks might accumulate silently and become hard to detect.
📈 Surge in Adoption and Stablecoin Usage
Crypto use in South Africa has soared. As of July 2025, the three largest crypto exchanges in the country reported a combined total of about 7.8 million registered users.
Meanwhile, by end-2024, exchanges reportedly held around US$ 1.5 billion in customer assets under custody.
The shift is not only in volume, but also in type of crypto: since 2022, USD-pegged stablecoins have overtaken traditional cryptocurrencies as the dominant trading pair on South African platforms.
⚠️ Volatility and Hidden Systemic Risk
While stablecoins are often promoted for their relative stability, SARB warns that their rapid growth — combined with the lack of oversight — could pose systemic threats. The fact that stablecoins are increasingly used instead of conventional assets could destabilize financial flows if not properly regulated.
Authorities also note that other emerging technologies — such as AI or quantum computing — might introduce new unforeseen risks when combined with digital-asset ecosystems. Moneyweb
🧑⚖️ Need for Regulatory Framework and Oversight
The SARB is working along with the national Treasury to build a regulatory framework aimed at bringing digital-asset transactions under control, especially cross-border trades.
But until these new rules come into force, the central bank warns that the crypto sector remains a potential vulnerability to the broader financial system.
🔎 Impact on Financial Stability and Monetary Policy
Because of the ease with which digital assets can cross borders, their unchecked use could undermine exchange-control regimes and challenge monetary sovereignty. This is especially worrying for emerging markets, where financial systems are often more fragile.
Any large-scale disruption — for example massive stablecoin redemptions — could ripple through banking, payments, currency stability, and deposit flows.
What This Means for Crypto Users and the Broader Market
- Increased scrutiny ahead: The combined pressure from SARB and national regulators suggests upcoming rules on crypto exchanges, cross-border transfers, and stablecoin usage.
- Volatility in stablecoins and trading: Platform users might see tighter controls or restrictions. Stablecoins may no longer be seen as “safe” or “same as cash” if regulatory oversight increases.
- Impact on institutions: Banks and financial firms might re-evaluate involvement in custodial or crypto-linked services, given systemic-risk concerns.
- Global ripple effects: The move by SARB adds to a growing global trend: supervisory bodies (in Europe, Asia, Africa) are becoming increasingly cautious about stablecoins and crypto — a signal that regulators worldwide are rethinking digital-asset governance.
Background: Rise of Crypto in South Africa
South Africa has seen a rapid surge in cryptocurrency adoption over recent years. Previously, traditional cryptocurrencies such as Bitcoin, Ethereum, and others were the mainstay of digital-asset trading. But since 2022, stablecoins — digital tokens pegged to fiat currencies (often USD) — have gained dominance as trading pairs because of their lower volatility
Though some regulatory steps have been taken (for example, the Financial Sector Conduct Authority designated cryptocurrencies as financial products in 2022 and began licensing crypto-service providers), gaps remain — especially when dealing with global stablecoins and cross-border flows.
Now, with millions of users and billions in assets involved, the stakes are much higher — and oversight is more critical.
Conclusion
The warning from the South African Reserve Bank signals a turning point for cryptocurrency regulation in South Africa. With “crypto assets and stablecoins” now officially flagged as potential threats to financial stability, both regulators and market participants may need to brace for tighter rules, increased scrutiny and enhanced oversight. For users and investors, understanding the evolving risks and staying informed about regulatory changes will be key. As SARB works with Treasury to build a regulatory framework, the future of crypto in South Africa hangs in the balance.
