New Risk Category Established
The South African Reserve Bank (SARB) has added crypto assets and stablecoins to a new, monitored risk category, citing the surging value of crypto holdings held by licensed service providers. The move comes as the SARB and the country’s national treasury race to establish a comprehensive framework to oversee cross-border crypto transactions and update the nation’s exchange control rules.
In its latest Financial Stability Review (FSR), the SARB has placed crypto assets and stablecoins under a new structural risk category: “technology-enabled financial innovation.” During a presentation on Nov. 25, Nicola Brink, head of the SARB’s financial stability department, explained that structural risks are “slow-burning risks.”
While these risks are not expected to disrupt the financial sector over the next 12 months, they could “undermine the resilience and the efficiency of the financial sector” over the long term.
“The Bank has added technology-enabled financial innovation as a broad risk category under which various aspects are monitored,” Brink stated, adding that this FSR focuses specifically on crypto assets.
This assessment follows a stocktake showing that the custody balances at the three largest licensed crypto asset service providers (CASPs)—Luno, VALR, and Ovex—have ballooned from under $580 million at the start of 2023 to nearly $1.5 billion by the end of 2024. The number of registered users on these three platforms has reached almost 7.8 million. Bitcoin remains the largest crypto asset held domestically, followed by Ripple (XRP), ethereum (ETH), and solana (SOL).
Regulatory Gaps and Exchange Controls
A primary concern highlighted in the Review is the “borderless nature” of crypto, which creates avenues to circumvent South Africa’s exchange control regulations. According to the report, on-chain analysis confirmed that the top 10 domestically hosted bitcoin wallets processed almost $3.7 billion in outward volume to foreign-hosted wallets since Jan. 1, 2019.
The SARB contends that this figure would be much higher if all wallets and crypto assets were included. Besides working towards a framework for overseeing cross-border transactions involving crypto assets, the South African central bank officials are reportedly reviewing and updating the exchange control regulations to explicitly include crypto assets.
Meanwhile, the FSR also highlighted a significant structural shift in the domestic crypto market: the increasing dominance of stablecoins. U.S. dollar-pegged stablecoins have emerged as the preferred trading pair on South African platforms, replacing unbacked crypto assets like bitcoin as the main conduit for trading activity.
Trading volumes in U.S. dollar-pegged stablecoins have soared from less than $230 million in 2022 to almost $4.67 billion in the year to October 2025. This rise is partly attributed to the stablecoins’ markedly lower price volatility. The Review links their growing use to potential financial-stability implications, especially through payments and settlements.
Furthermore, the lack of transparent, consistent, and reliable data on crypto assets, combined with existing regulatory gaps, is identified as a critical vulnerability. The SARB noted that South Africa currently has “no framework in place” for regulating global stablecoin arrangements and only “partial regulations in place” for crypto assets, according to an October 2025 Financial Stability Board (FSB) assessment. The central bank stated that vulnerabilities will likely continue to increase until these domestic regulatory gaps are addressed.
FAQ 💡
- Why did SARB create a new risk category? To monitor crypto assets and stablecoins as part of “technology-enabled financial innovation.”
- How big is South Africa’s crypto market? Licensed providers like Luno, VALR, and Ovex now hold nearly $1.5B in custody balances.
- What concerns the central bank most? Cross-border crypto flows risk bypassing South Africa’s exchange control regulations.
- Why are stablecoins under scrutiny? Dollar-pegged stablecoins dominate local trading, raising long-term financial stability risks.
