The South African Reserve Bank has officially released its second financial stability report for 2025, expressing concerns over the financial risks posed by digital assets and stablecoins amid a growing user base in the nation.

In the recent report, the central bank pointed to an increase in the number of users across South Africa’s three major crypto exchanges, which has reached 7.8 million as of July, with approximately $1.5 billion under custody at the end of 2024.

“Due to their exclusively digital – and thus borderless – nature, crypto assets can be utilized to bypass the Exchange Control Regulations,” the bank stated, which aim to regulate the movement of funds in and out of South Africa.

Total registered users across the top crypto exchanges in South Africa. [Source: South African Reserve Bank]

In addition to major cryptocurrencies like Bitcoin, XRP, Ether, and Solana, the report noted a significant rise in trading volume of stablecoins since 2022, marking a different trend in crypto trading in the region:

“While Bitcoin and other leading crypto assets dominated trading until 2022, USD-pegged stablecoins have now become the favored trading pair on South African platforms. This trend is attributed to the notably lower price volatility associated with stablecoins compared to unbacked cryptocurrencies.”

The Financial Stability Board, responsible for monitoring the financial sector in the G20, also indicated that “no framework exists” in South Africa for regulating global stablecoins and only “partial regulations” apply to cryptocurrencies. The implications of unresolved risks from crypto assets could pose challenges to financial stability until a comprehensive regulatory framework is enacted.

A Shift in Government Perspectives

This caution from the central bank recalls sentiments from 2017, when Deputy Governor Francois Groepe expressed that issuing digital currencies would be a high-risk undertaking for the nation.

However, there may be more optimism among some South African policymakers. In 2022, the Financial Sector Conduct Authority officially classified cryptocurrency as a financial product, enabling crypto firms to receive business licenses.