The South African Reserve Bank (SARB) has ratified Standard Chartered’s warning that stablecoins pose a systemic risk to emerging economies. Projections estimate a withdrawal of up to $1 trillion in bank deposits by 2028, and rapid domestic adoption places South Africa at the center of the debate.
Stablecoins accelerate adoption and liquidity risk in South Africa
SARB’s position echoes Standard Chartered’s projection of a possible $1 trillion deposit outflow in emerging markets before 2028. The magnitude of potential liquidity migration underscores how quickly stablecoins could reshape banking systems already managing currency volatility and macro-prudential strain.
Local adoption is surging: stablecoin trading volumes jumped from 4 billion rand in 2022 to nearly 80 billion by October 2025 — roughly $4.6 billion — reflecting deeper retail and institutional use of dollar-denominated instruments. This increases sensitivity to shifts in global liquidity cycles.
Platforms such as Luno, VALR and Ovex now serve 7.8 million users and custody about $1.5 billion, signaling that payments, savings and remittances are steadily moving toward crypto-based infrastructure. Growing user and custody footprints illustrate displacement of core banking functions into private rails.
Herco Steyn of SARB noted that the cross-border digital nature of stablecoins allows circumvention of exchange controls. Lack of visibility into reserves, liquidity and issuer composition creates blind spots at a moment when barriers to capital flight are weakening. Opaque backing and governance broaden supervisory risk.
SARB also highlights that while it evaluates a CBDC response, unregulated private stablecoins are already replacing basic intermediation, pressuring liquidity calibration and payment system safeguards. Traditional banking channels face erosion just as crypto-enabled alternatives scale.
Oversight remains incomplete. The FSCA classifies crypto as a financial product and processes exchange licenses, but no harmonized global stablecoin framework exists, complicating cross-border supervision. The Financial Stability Board judged South African rules only partially adequate in October 2024, revealing inconsistencies in prudential treatment and redemption standards.
A High Court ruling in May 2025 held that cryptocurrencies are not “capital,” “currency” or “money” for exchange control purposes. Regulatory analysis suggests this may ease pathways for digital asset flows where strict rules once restricted movement, widening channels for cross-border stablecoin use.
The phenomenon is global: economies with twin deficits — including Turkey, India, Brazil, Kenya, Egypt, Pakistan, Bangladesh and Sri Lanka — face heightened digital-dollarization risk and deposit drain pressures. Domestic banking bases may erode in favor of offshore-denominated tokens.
As deposits migrate, funding stability and maturity transformation weaken, increasing liquidity risk for banks in stress conditions. Monitoring reserves and issuer liquidity also becomes harder, undermining monetary policy in currency-volatile markets.
SARB’s confirmation of Standard Chartered’s warning marks a regulatory inflection point. Authorities anticipate reforms in 2025 aimed at closing oversight gaps, and the pace of regulatory tightening will become the next key metric for markets and supervisors.