South Africa Central Bank Sceptical of Stablecoin 'Hype'

Speaking to The Banker on 9 Feb, Lesetja Kganyago, governor of the South African Reserve Bank (SARB), said the institution is prioritizing linking national real-time payment systems across borders rather than adopting crypto-native settlement tools.

"I think that there is a lot of hype around stablecoins," Kganyago said, adding that the long-term benefits remain uncertain as both the technology and global regulatory frameworks continue to evolve.

The South Africa difference

Interest in stablecoins has surged globally in recent years, driven by regulatory advances in major markets, growing institutional participation and retail interest, particularly in countries with more volatile currencies. 

But Kganyago argued that South Africa does not face the FX constraints that have driven stablecoin usage in neighbouring economies as individual savers lean on digital assets like USDC to protect against inflation and currency depreciation.

The country has taken a relatively pragmatic approach to crypto more broadly, with digital asset service providers brought under formal regulation. 

Focus on regional payments infrastructure

Kganyago also signalled limited appetite for moving quickly on central bank digital currencies. While he said the case for a wholesale CBDC was "pretty strong," SARB does not plan to be an early mover, pointing instead to existing regional infrastructure that could deliver similar functionality.

"For all intents and purposes, the Southern African Development Community’s real-time gross settlement platform, with really minor changes, could play the role of a wholesale CBDC," he said.

For now, SARB’s focus is on strengthening and interlinking domestic payment rails, including its PayShap instant payments system, with counterparts in neighbouring countries, he said.