South Africa’s central bank has cooled expectations for a retail central bank digital currency, saying the country does not face an urgent need to launch one and should focus instead on upgrading the existing payments system.
Key Takeaways:
- South Africa’s central bank says a retail CBDC is not needed now and is prioritizing payments system upgrades instead.
- The SARB will focus on wholesale digital currency uses and improving cross-border payments.
- Officials also warned that crypto and stablecoins pose financial risks and could be used to bypass exchange controls.
In a research paper published Thursday, the South African Reserve Bank (SARB) said a consumer-facing CBDC is technically possible but not necessary in the near term.
SARB Prioritizes Payments Reform Over Retail CBDC Rollout
The bank argued that current reforms aimed at improving the national payments rails, adding faster settlement, and widening participation by non-bank providers offer a more practical route to better financial access for now.
“While the SARB does not currently advocate for the implementation of a retail CBDC, it will continue to monitor developments and will remain prepared to act should the need arise,” the paper said.
Rather than pursuing a digital rand for everyday use, the central bank plans to focus on wholesale applications of digital currency and on boosting the efficiency of cross-border payments.
The move reflects a view that targeted infrastructure upgrades could deliver benefits sooner than a broad consumer rollout that would require new legal, technical and operational frameworks.
SARB’s researchers also tested whether a retail CBDC would solve gaps in the country’s payments network and found mixed results.
About 16% of adults remain unbanked, but the bank said a digital currency would need to match or beat cash on key features such as offline use, universal acceptance, ease of use, privacy and low cost to make a meaningful dent in that number.
The paper landed as the central bank issued fresh warnings about crypto assets and stablecoins.
In a separate report this week, SARB flagged the sector as a growing risk to technology-led finance and cautioned that digital tokens could be used to route money around the country’s exchange controls, which govern capital flows.
Globally, the CBDC push remains uneven.
Only three countries, including Nigeria, Jamaica, and The Bahamas, have fully launched digital currencies, while dozens of others are running pilots or are in development or research phases, according to the Atlantic Council’s tracker.
US to Shelve CBDC as Congress Advances Stablecoin and Crypto Bills
In contrast, the United States is seeking to shelve its CBDC work under the Trump administration.
In July, the US House narrowly passed a key procedural vote, clearing the path for final decisions on three major crypto bills: the GENIUS stablecoin bill, the CLARITY Act, and the Anti-CBDC Surveillance State Act.
In September, House Republicans moved to combine the measure banning the Federal Reserve from creating a CBDC with the CLARITY Act.
However, the CLARITY Act has not been signed into law, but is still under consideration in the Senate. The bill requires passage by both the Senate and the House, and then presidential approval, before it can be enacted.
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