"Stablecoins could collapse at any time"…Warning from South African central bank governor

Doohyun Hwang

Summary

Lesetja Kganyago, governor of the South African Reserve Bank, said he was issuing a strong warning about the risks of stablecoins.
He said stablecoins could undermine the stability of the existing monetary system and warned they could fracture or collapse at any time.
The South African central bank has warned that, amid the absence of comprehensive regulation, the surge in stablecoin use is a new risk for the financial sector.

Lesetja Kganyago, governor of the South African Reserve Bank (SARB), has issued a strong warning about the risks posed by stablecoins, which have been gaining popularity. His point is that stablecoins, a type of virtual asset (cryptocurrency), could undermine the stability of the existing monetary system.

According to Bloomberg on the 7th (local time), Kganyago made the remarks at the "2026 Warwick Economics Summit" held that day, saying, "Central banks have a duty to protect the singleness of money and the public’s access to money."

He went on to warn that "in fact, these assets can fracture or collapse at any time." While stablecoins are designed to reduce price volatility by pegging their value to fiat currencies such as the U.S. dollar or to government bonds, he said their stability is not permanent.

In South Africa, the use of stablecoins backed by U.S. Treasury securities and other collateral has been surging recently as an alternative to highly volatile mainstream crypto assets. In a report last November, the central bank warned that the lack of comprehensive regulation is emerging as a new risk for the financial sector.