Stablecoins Could ‘Break Apart’, Warns South African Reserve Bank Governor
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Stablecoins, digital tokens backed by assets to hold fixed value, gain global traction including South Africa as alternatives to fiat currencies. Kganyago emphasized central banks' duty to preserve money's oneness and public affordability.
“The truth is these things could break apart,” Kganyago stated, citing structural vulnerabilities and systemic risks if issuers fail or assets falter. SARB's late-2025 Financial Stability Review flagged crypto/stablecoins as key threats.
Trading volumes in USD-pegged stablecoins exploded as preferred low-volatility pairs on local platforms. Three largest exchanges hit nearly 7.8m combined users mid-2025, per SARB data.
Borderless stablecoins enable sidestepping exchange controls, fostering unmonitored capital flows and oversight gaps. Without comprehensive frameworks, regulators lack adoption/systemic linkage data, allowing undetected risk buildup.
SARB urges stronger guardrails for global stablecoins and custodians to shield against shocks. This contrasts FSCA classifying some cryptos as financial products and licensing 300+ exchanges by Dec 2025, highlighting monetary control concerns.
Figure 25 shows crypto asset trading migration to stablecoins, with volumes rising sharply from 2022-2025 across VALR, Luno, ABT.
