The South African Reserve Bank has indicated that a central bank digital currency is not a priority at this stage, suggesting instead that the country should focus on upgrading its existing payments infrastructure. In a paper released on Thursday, the bank stated there is no “strong immediate need” for a retail CBDC, even though implementing one would be technically possible. It emphasized that ongoing projects — particularly the modernization of the national payments system and efforts to expand non-bank participation — should remain the primary focus.

“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.”

Going forward, the central bank plans to concentrate more on wholesale CBDC use cases and improving cross-border payment efficiency, while still observing developments related to a retail-level digital currency.

Concerns around crypto and stablecoins

The research included an assessment of whether a retail CBDC could address existing weaknesses in South Africa’s payments ecosystem, noting that around 16% of adults remain outside the banking system. For a digital currency to succeed, the paper stressed it would need to match or outperform cash in several areas, including offline capability, universal acceptance, low fees, ease of use, and privacy protections.

This comes at a time when the central bank has taken a more cautious approach toward the crypto sector. In a report earlier this week, it warned that “crypto assets and stablecoins” pose new risks for financial innovation and highlighted that crypto could be used to bypass South Africa’s Exchange Control Regulations, which govern cross-border fund flows.

Global CBDC momentum continues

According to the Atlantic Council CBDC Tracker, only three nations — Nigeria, Jamaica, and the Bahamas — have fully launched a CBDC to date. Another 49 countries are running pilot programs, 20 are in active development, and 36 remain in the research phase. The United States, meanwhile, has paused its CBDC efforts under the Trump administration.

Sources:

https://www.resbank.co.za/en/home/publications/publication-detail-pages/Fintech/sarb-position-paper-on-the-necessity-of-a-retail-cbdc-in-south-a

https://cointelegraph.com/news/south-africa-central-bank-no-strong-immediate-need-for-cbdc

https://www.atlanticcouncil.org/cbdctracker/