The Governor of the South African Reserve Bank, Lesetja Kganyago, has warned that the rising popularity of stablecoins poses a significant risk, saying there is a danger these cryptocurrency assets could ‘break apart.’
Addressing the 2026 Warwick Economics Summit, Kganyago stressed the responsibility of central banks to ‘protect the oneness of money and the affordability of money to the public.’ He said stablecoins, which are digital tokens typically backed by assets that aim to maintain a fixed value, have gained traction around the world, including in South Africa, as users seek alternatives to traditional currencies.
“The truth of the matter is that these things could break apart,” Kganyago said, highlighting concerns about the structural soundness of stablecoins and the potential implications for financial systems if they fail or fragment.
His remarks underline the broader unease among policymakers in emerging markets about the rapid expansion of digital assets that operate outside existing regulatory frameworks, even as adoption grows among investors and everyday users.
Kganyago’s remarks come against a broader backdrop of caution from the South African Reserve Bank (SARB), which in late 2025 flagged both crypto assets and stablecoins as emerging financial stability risks in its annual Financial Stability Report.
REGULATION | South African Central Bank Warns ‘Crypto & Stablecoins Pose Financial Stability Risk’
The 2025 report noted a sharp increase in adoption: combined users on the country’s three largest crypto exchanges climbed to nearly 7.8 million by mid-2025, with trading volumes in USD-pegged stablecoins surging as their lower volatility made them the preferred trading pair on local platforms.
SARB warned that the borderless nature of stablecoins and other digital assets could be used to sidestep South Africa’s exchange control regulations, potentially facilitating unmonitored capital flows and complicating oversight.
REGULATION | South African Reserve Bank Moves Quickly to Block Crypto Loophole, Files Appeal Against High Court Ruling on Exchange Controls
Unlike regulated financial instruments, many stablecoins currently operate without a comprehensive legal framework leaving regulators with limited data on their adoption and systemic interlinkages and creating conditions where risks could build up undetected and spread into the broader financial system.
REGULATION | South Africa Reserve Bank to Publish Regulatory Framework in 2025 to Cover Business Activities for CASPs, Says Finance Minister
The central bank highlighted that without stronger regulatory guardrails, particularly for global stablecoins and the custodial entities that issue them, the country’s financial system could be more vulnerable to shocks.
This stance contrasts with other regulatory initiatives in South Africa, such as the Financial Sector Conduct Authority’s classification of certain crypto assets as financial products and the licensing of exchanges, but SARB’s warnings underscore a persistent unease about digital assets’ capacity to compromise monetary control and financial stability.
2025 RECAP | South Africa Had Approved 300 Crypto Firms Out of 512 Applications as of December 2025
Stay tuned to BitKE for updates into crypto regulation in South Africa.
Join our WhatsApp channel here.
Follow us on X for the latest posts and updates
Join and interact with our Telegram community
________________________________________________