South Africa's Reserve Bank (SARB) has announced that the country does not require a retail central bank digital currency (CBDC) at this time. The central bank stated that current payment systems adequately meet consumer needs and provide reliable access. A research paper released by SARB confirmed that while the development of a retail CBDC is technically feasible, there is no immediate demand for it. The paper also highlighted that further work is necessary to address cybersecurity concerns, financial stability risks, and crucial design questions related to consumer adoption.
The paper further emphasized that South Africa should prioritize strengthening its existing payment network. SARB indicated that resource allocation should be shifted towards areas with a higher impact. The bank suggested that the country can gain valuable insights by observing global CBDC pilots before committing to a national rollout.
"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 Reserve Bank stated. This phrasing positions the decision as one of preparedness rather than outright withdrawal.
Shift Toward Wholesale and Cross-Border Digital Currency Development
SARB has confirmed that it is not abandoning digital currency innovation. Instead, the bank is redirecting its efforts towards wholesale CBDC research and cross-border payment solutions, areas that offer immediate economic and operational advantages. Wholesale CBDCs have the potential to streamline interbank settlements and accelerate financial market processes.
Cross-border payments currently face challenges such as delays, high fees, and limited transparency. Digital currency systems have the capacity to reduce these friction points and establish more predictable settlement timelines. The bank's strategy is to strengthen these channels first before exploring retail applications. Researchers investigated whether a retail CBDC would effectively address gaps in the local payments environment. Their findings were mixed, as digital currency tools must surpass cash in several key areas, including offline capability, universal acceptance, ease of use, privacy, and low cost. Although approximately 16% of adults remain unbanked, the bank suggested that a retail token alone cannot resolve this issue unless its core features align with daily cash needs.
Crypto Concerns Rise as SARB Issues New Warnings
This announcement coincides with the central bank's release of new warnings regarding crypto assets and stablecoins. In a separate report, SARB characterized the sector as a growing risk to technology-led finance. The bank also noted that digital tokens could potentially circumvent South Africa's exchange control rules, which govern the movement of capital across borders.
Global development of CBDCs remains varied. According to the Atlantic Council, only three countries—Nigeria, Jamaica, and The Bahamas—have fully launched their CBDCs, while dozens of others are currently running pilots or are still in the research phase.
The United States is still experiencing policy uncertainty, with ongoing discussions among lawmakers concerning the digital currency issue. In July, the House of Representatives passed a procedural vote to advance the GENIUS stablecoin bill, known as the CLARITY Act, and the Anti-CBDC Surveillance State Act. Subsequently, House Republicans decided to merge the Federal Reserve CBDC prohibition with the CLARITY Act. The CLARITY Act is currently under consideration in the Senate and requires approval from both chambers and the president.
The central question now arises: How will South Africa's digital strategy evolve as global CBDC policies continue to shift?