South African Reserve Bank Governor Warns Stablecoins Could ‘Break Apart’ Amid Rising Adoption
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Speaking at the 2026 Warwick Economics Summit, Kganyago emphasised central banks’ duty to “protect the oneness of money and the affordability of money to the public,” noting stablecoins’ appeal as low-volatility alternatives to fiat currencies.
“The truth of the matter is that these things could break apart,” he said, raising concerns over their structural integrity and potential systemic fallout if pegs fail or fragmentation occurs.
Kganyago’s comments build on SARB’s late 2025 Financial Stability Report, which flagged crypto and stablecoins as emerging risks; local exchange users hit nearly 7.8 million by mid‑2025, with USD‑pegged stablecoins dominating trading volumes.
SARB highlighted stablecoins’ borderless nature enabling evasion of exchange controls, unmonitored capital flows and limited regulatory visibility into adoption or interlinkages.
Without robust rules — especially for global issuers and custodians — the financial system remains exposed to undetected shocks, despite FSCA classifying some cryptos as financial products and licensing exchanges.
His stance reflects emerging market policymakers’ unease over unregulated digital assets challenging monetary sovereignty.
