The South African Reserve Bank has classified cryptocurrencies and stablecoins as new financial risks

According to Bloomberg, the South African Reserve Bank has warned that crypto assets and stablecoins have become new risks threatening the country's financial sector due to a lack of comprehensive regulation.

In its semi-annual Financial Stability Assessment Report, it pointed out that the digitization and cross-border nature of cryptocurrencies allow them to evade existing foreign exchange control laws, while digital assets have not yet been included in regulatory oversight. The central bank's chief macroprudential expert, Herco Steyn, stated that the risks stem from an "incomplete regulatory framework." He expects progress next year but warned that if progress stalls, "regulation will be overwhelmed." Currently, the South African Reserve Bank is working with the Treasury to formulate new regulations to oversee cross-border crypto asset transactions and amend foreign exchange control laws to include digital assets. The central bank emphasized that as the adoption of crypto assets increases, the domestic regulatory framework needs to continuously adjust with market developments and risks. Data shows that South Africa's crypto industry is dominated by three major platforms: Luno, VALR, and Ovex. As of July, there were nearly 7.8 million registered users; by December 2024, total assets are expected to reach 25.3 billion rand.