South Africa flags crypto as a growing financial risk
A surge in stablecoin volumes has raised concerns over financial stability and gaps in regulation.
South Africa’s central bank has identified crypto assets and stablecoins as a growing risk in its latest financial stability report, pointing to rapid adoption and large on-chain holdings. The report said major exchanges had 7.8 million users by July and held about $1.5 billion in custody by end-2024.
Regulators warned that borderless digital assets can bypass exchange controls, while rising stablecoin use since 2022 shows a structural shift in local trading. USD-pegged stablecoins now dominate trading pairs thanks to lower volatility compared with unbacked assets like Bitcoin and Ether.
The Financial Stability Board has previously highlighted gaps in South Africa’s regulatory framework for both crypto and global stablecoins.
Government sentiment appears more supportive, with policymakers moving ahead on licensing. The Financial Sector Conduct Authority recognised crypto as a financial product in 2022 and began issuing licences, showing a more constructive stance than the central bank’s caution.
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