South African Reserve Bank flags crypto risks as users reach 7.8 million

SARB highlights regulatory gaps in crypto as South Africa reaches 7.8M users and $1.5B in custody.

User growth and custody volumes

South Africa's three largest cryptocurrency exchanges—Luno, VALR, and Ovex—now serve 7.8 million users as of July 2025. These platforms held about $1.5 billion (R25.3 billion) in crypto custody by the end of 2024. The South African Reserve Bank (SARB) tracks this expansion in its First 2025 Financial Stability Review. Adoption reflects broader African trends, where crypto remittances and savings draw users despite volatility. The number of accounts nearly doubled since early 2022, driven by economic pressures like high inflation and currency depreciation.

Stablecoin shift in trading

USD-pegged stablecoins overtook Bitcoin as the top trading pair on local exchanges in 2022. Stablecoins now drive most volume, as investors seek lower-risk options amid rand swings. SARB data shows this preference grew with economic pressures. Volumes for stablecoins surged from under 4 billion rand in 2022 to nearly 80 billion rand by October 2025. The bank views stablecoins as a bridge to fiat but warns of untested resilience in local markets, especially during global depegging events.

Regulatory gaps and capital flows

The Financial Stability Board rated South Africa's crypto rules partially adequate in October 2024. No full framework covers global stablecoins, leaving oversight fragmented. Crypto's digital form lets users evade Exchange Control Regulations on capital outflows. SARB cautions that risks build without tighter controls, potentially amplifying financial shocks. Herco Steyn, a SARB official, noted that without full oversight, authorities lack visibility into reserves, liquidity, or issuers. The borderless nature of these assets could undermine traditional financial controls, especially in a high-debt economy.

Oversight progress

The Financial Sector Conduct Authority (FSCA) classified crypto as a financial product in 2022. This step licensed compliant exchanges and imposed conduct standards. Over 300 entities have applied, with dozens approved. SARB and FSCA coordinate on broader reforms, including stablecoin issuer rules. Progress lags behind user pace, with calls for faster alignment to global norms. The SARB anticipates some regulatory developments in 2026, but delays could allow undetected risks to grow.

Broader implications

South Africa now ranks among Africa's top crypto markets by volume and adoption. The central bank stresses the need for stronger safeguards to match the sector's scale. Ongoing reforms aim to balance innovation with financial stability, aligning with global standards while addressing local capital flow concerns. As stablecoin volumes rise again in 2025 after a 2023 dip, regulators monitor for spillover effects on banking liquidity and exchange rates. The review also flags emerging tech risks like AI and quantum computing, but crypto stands out as the immediate structural vulnerability.