South Africa bars foreign stablecoins for domestic payments

On June 2, 2026, the South African Reserve Bank and the Financial Sector Conduct Authority reaffirmed that cryptocurrencies and stablecoins are not legal tender and said foreign‑currency stablecoins will not be approved for domestic payments. An Intergovernmental Fintech Working Group will analyze rand‑pegged stablecoins and deliver findings by late 2026.

The regulators said crypto assets and stablecoins are neither money under the National Payments System Act nor funds, so they cannot be treated as legal tender. Both authorities are carrying out analytical work to assess how digital assets should be treated for payment purposes as use shifts from speculation to everyday transactions.

Regulators noted unbacked and unregulated cryptocurrencies are not intended to be payment instruments. They added that stablecoins exhibit some characteristics of digital money and could serve as payment instruments if they are properly designed and regulated. The IFWG will evaluate specific use cases for stablecoins pegged to the rand to inform any policy response.

Officials cited the risk that foreign‑currency pegged stablecoins could lead to currency substitution, or dollarization, which would weaken monetary policy transmission. Regulators said widespread adoption of foreign‑pegged stablecoins could disrupt the efficiency and stability of the National Payments System and pose risks to the broader financial sector.

The government plans to broaden the reach of the National Payments System Act to give the central bank additional powers over new payment technologies. The joint statement said the revision would enable the central bank, at its discretion and if a compelling case arises, to designate crypto assets as payment instruments for domestic transactions.

Economist Dawie Roodt has argued that current exchange control laws do not match modern capital flows and warned that failure to update rules could encourage consumers to use more stable digital alternatives instead of the rand. Regulators responded that their priority is to protect the integrity and stability of the payments system while continuing work on legal and supervisory changes.