SARB Flags Crypto Regulation Gaps, Stablecoins as Risks
South Africa’s Reserve Bank (SARB) warns of emerging financial stability threats from crypto assets and USD-pegged stablecoins in its 2025 Financial Stability Report. Retail adoption surged to 7.8 million users on the top three exchanges and $1.5 billion in custody by end-2024. The borderless nature of digital assets can undermine Exchange Control Regulations. Since 2022, traders have favoured stablecoins over BTC and other unbacked tokens due to lower volatility. The Financial Stability Board highlights gaps in global crypto regulation and notes South Africa’s current rules cover only part of the market. Without robust regulation, risks may build unchecked. Meanwhile, the Financial Sector Conduct Authority has designated digital assets as financial products and begun licensing crypto firms.
Bearish
The SARB’s warning on crypto regulation gaps and stablecoin risks introduces significant regulatory uncertainty for traders. In the short term, concern over potential controls on cross-border flows and stricter licensing could dampen market sentiment and reduce trading volumes. Long term, unresolved regulatory gaps may inhibit institutional adoption and limit price upside for BTC and related assets, keeping downward pressure on valuations.