The South African Reserve Bank has issued a cautionary statement regarding the rapid expansion of stablecoins—digital assets designed to maintain a fixed value—and the potential risks associated with them. Speaking at the 2026 Warwick Economics Summit on Saturday, Governor Lesetja Kganyago highlighted the vulnerabilities inherent in such digital currencies. “These types of digital assets carry the risk of collapse,” he warned, emphasising that the central bank’s foremost responsibility is to ensure the stability and accessibility of the nation’s currency.
Governor Kganyago specifically pointed to the possible risks linked to stablecoins, stating, “In reality, these coins can fail, which serves as an important warning for investors.” Stablecoins are typically backed by US Treasury bonds or other stable assets and are designed to maintain parity with conventional currencies, offering a lower volatility option compared to traditional cryptocurrencies.
The use of stablecoins has grown significantly within South Africa, attracting investors seeking relative stability amid fluctuating markets. However, the Reserve Bank had already flagged concerns in November 2025, noting that the country’s financial sector faces new risks from investment in such assets in the absence of comprehensive regulation.
Kganyago further highlighted the growing importance of central bank financial models amid rising global economic uncertainty. “We have a full suite of models that support policy-making and risk assessment,” he said, adding that these tools are particularly critical in the context of US sanctions and other global shifts. The central bank relies on these models to monitor systemic risk, guide policy decisions, and ensure the resilience of South Africa’s financial system.
The following table summarises key information regarding stablecoins in South Africa:
| Aspect | Description |
|---|---|
| Asset Type | US Treasury bonds, other supported assets |
| Key Advantage | Relatively low volatility, parity with conventional currency |
| Main Risk | Insufficient regulation, potential for collapse |
| Central Bank Action | Risk assessment, use of financial models, policy guidance |
Economists and investors have responded to Governor Kganyago’s warnings with considerable attention. Experts stress that the rapid growth of stablecoins, combined with limited regulatory oversight, makes proactive measures by the central bank essential to maintain economic stability.
This cautionary message serves as a crucial signal for South African cryptocurrency investors, encouraging them to carefully evaluate the risks associated with stablecoins and make informed, measured investment decisions.