South African Reserve Bank: "Virtual assets and stablecoins designated as new financial stability risks"

The South African Reserve Bank (SARB) has officially classified virtual assets (cryptocurrencies) and stablecoins as new financial stability risks. The report analyses that increasing use of stablecoins in local markets is notable and is placing growing strain on capital flow management systems.

On the 25th (local time), according to crypto-focused media Cointelegraph, SARB pointed out in its latest financial stability report that virtual assets can move across borders without constraints and could be used to circumvent foreign exchange regulations. The report identified the structural proliferation of major virtual assets, including Bitcoin (BTC), Ethereum (ETH), XRP, and Solana (SOL), and stablecoins as potential risks.

The report went on to state that "stablecoin trading volumes have surged since 2022" and that "the primary trading base in local markets appears to have shifted from Bitcoin to stablecoins." It assessed that relatively low price volatility and convenient payment structures have accelerated the spread of stablecoins.

SARB also said that the number of users of South Africa's top three virtual asset exchanges reached 7.8 million as of July. The custodial asset size of those exchanges was estimated at about $1.5 billion as of the end of 2024. The report diagnosed that such rapid growth is becoming a new consideration across the overall financial stability framework.