Sarb Doubles Down on Stablecoin Regulation Amid Criticism from Crypto Industry

South Africa's Reserve Bank (Sarb) governor Lesetja Kganyago emphasized the need for stablecoin regulation, citing potential risks to the country's financial system.

Kganyago stated that while stablecoins could improve cross-border payments, they also pose a threat if used to evade regulatory controls or facilitate illicit activities.

The Sarb has proposed draft Capital Flow Management Regulations, which would bring crypto transactions under existing capital flow rules. Critics argue this would create excessive red tape and stifle innovation.

Kganyago acknowledged the challenges of striking a balance between regulation and innovation, saying 'finding that balance is not easy'.