South Africa Flags Crypto as Stability Risk in Review

South African local exchanges hit 7.8M users and $1.5B in assets, prompting concern over fast crypto adoption.

Stablecoin trading surged to nearly 80B rand, overtaking major crypto pairs due to lower volatility.

Oversight gaps leave stablecoins and crypto partly unregulated, increasing systemic and cross-border risks.

South Africa’s central bank warned that rising use of crypto assets and stablecoins now poses a new financial risk. The South African Reserve Bank issued its 2025 Financial Stability Report, noting fast market growth since 2022 and identifying gaps in oversight. The bank raised this concern after reviewing user data, exchange activity and regulatory coverage.

SARB Notes Fast Growth in Local Crypto Use

The report stated that the country’s three largest exchanges reached 7.8 million combined users by July. It also noted that these platforms held about $1.5 billion in custody at the end of 2024. This expansion prompted the bank to assess emerging threats linked to digital assets.

Herco Steyn, the central bank’s lead macroprudential specialist, said the borderless nature of crypto creates risks for South Africa’s exchange control rules. He explained that existing regulations were never designed for fast-moving digital transactions. This comment guided the report’s focus on cross-border activity.

Stablecoin Trading Overtakes Major Cryptocurrencies

Trading patterns shifted sharply after 2022, and this trend was highlighted throughout the review. USD-pegged stablecoins now dominate South African platforms, replacing Bitcoin, XRP, Ether and Solana as the preferred trading pairs. The report linked this development to stablecoins’ lower price volatility.

Notably, stablecoin trading volumes climbed from under 4 billion rand in 2022 to nearly 80 billion rand by October 2025. Exchanges such as Luno, VALR and Ovex recorded this rise while serving the country’s growing user base. This change formed the basis of what the bank called a structural shift in local market behavior.

Regulators Cite Oversight Gaps as Risks Increase

The Financial Stability Board reported in October that South Africa has no complete framework for global stablecoins. It also found only partial rules for cryptocurrencies. According to the SARB, this gap allows risks to develop without detection.

The bank referenced earlier warnings from Deputy Governor Francois Groepe, who cautioned in 2017 against issuing digital currencies. However, the report also noted that government bodies have moved differently. The Financial Sector Conduct Authority classified crypto as a financial product in 2022 and proceeded to license firms that met compliance standards.

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