South Africa Flags Rising Risks From Stablecoin Adoption

• The South African Reserve Bank (SARB) warned that crypto assets risk bypassing exchange controls.
• A “structural shift” has seen stablecoin trading volumes surge, replacing volatile assets.
• The country now has 7.8 million crypto users with $1.5 billion held in custody on major exchanges.

The South African Reserve Bank (SARB) has issued a new warning on digital assets. In its latest financial stability review, the central bank flagged cryptocurrencies and stablecoins as emerging risks to the financial system. The report highlights a specific threat: the ability of these assets to bypass the country’s strict exchange controls.

The Data: 7.8 Million Users and $1.5 Billion in Custody

Data reinforces the scale of this challenge. As of July 2025, South Africa’s three largest exchanges have served 7.8 million users with the platforms holding approximately $1.5 billion in custodial assets at the end of 2024.

The report noted that the cross-border nature of cryptocurrencies presents challenges for existing oversight frameworks. According to SARB, digital tokens can be used in ways that circumvent South Africa’s Exchange Control Regulations, which govern the movement of funds in and out of the country.

Related: South African Regulator May Require Crypto Firms to have a Local Office

A ‘Structural Shift’ Toward Stablecoins

Alongside major assets such as Bitcoin, Ether, XRP, and Solana, the central bank highlighted a major rise in stablecoin activity. The SARB stated that trading behavior on domestic platforms has undergone a “structural shift” since 2022, with USD-pegged stablecoins overtaking the earlier reliance on volatile, unbacked cryptocurrencies.

The report attributed this change to the comparatively lower price fluctuations associated with stablecoins, noting that they have become the primary trading pairs used within local markets.

The Regulatory Gap: Licenses vs. Capital Controls

International watchdogs share this concern. The Financial Stability Board noted in October that South Africa lacks a dedicated framework for global stablecoins. While the country has “partial regulations” in place, gaps remain.

The SARB warned that risks could accumulate undetected until a formal framework is implemented. This caution contrasts with recent moves by the Financial Sector Conduct Authority (FSCA). In 2022, the FSCA classified crypto as a financial product and began issuing operating licenses to exchanges.

Related: South Korea’s Crypto Surge: Opportunity and Risk