Wiehann Olivier from Forvis Mazars explains what new stablecoin regulations will look like and why SA needs to speed up its regulatory reform. From Moneyweb.
You can also listen to this podcast on iono.fm here.
Stablecoins are currently processing upwards of $33 trillion in transactions a year, more than Visa and Mastercard combined. That figure will grow exponentially in the next few years.
Stablecoins process instantly, 24/7 and allow fast and easy settlement for all sorts of use cases, from cross-border remittances to trade payments and everyday use.
But SA still lacks clear regulations covering stablecoins, says Wiehann Olivier, partner and global co-head of digital assets for Forvis Mazars.
“This was highlighted in the budget speech of 2025, where we were told we would have stablecoin regulations open for public comment. But that period came and went.
“Just to be clear, regulations are not about control, they’re about protection. It protects consumers, the financial system, and it gives confidence to serious market participants.”
Regulations are on their way, and the hope is they arrive fast to prevent SA slipping behind the rest of the world.
The US has passed the Genius Act, spelling out how stablecoin issuers require 1:1 reserves in liquid assets like short-term Treasuries, along with monthly public reserve disclosures.
MiCA, which stands for Markets in Crypto-Assets Regulation, is Europe’s answer to the emergence of stablecoins and does pretty much the same thing as the Genius Act in the US.
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Where does South Africa sit in this emerging landscape?
Olivier explains that SA cannot delay introducing regulations while the rest of the world streaks ahead of us.
“Stablecoins are no longer on the fringes of finance. They are moving into the core. And the fact that South African banks are already participating just shows how quickly this space is maturing. This is the future,” says Olivier.
“Stablecoins are becoming a part of the global financial plumbing. So if South Africa waits too long, innovation happens elsewhere.”
What the new regulations will look like
The Intergovernmental Fintech Working Group (IFWG) discussion paper on rand-pegged stablecoin arrangements outlines what the new regulations will look like.
Similar to the Genius Act and the MiCA in Europe, SA stablecoin regulations will require stablecoins to be backed 1:1 by actual reserves that are legally segregated from the issuer in case the issuer fails.
Issuers will have to publish evidence of reserve backing on a regular basis to provide comfort to the users of stablecoins.
Regulators worldwide are equally concerned that stablecoin issuers perform too many potentially conflicting roles – as issuers, wallet providers, exchange owners and more. Regulations will provide clear governance and risk separation. Issuers will be corralled under a prudential-type supervision, similar to other financial services providers.
There will also be rules governing the type of assets that are allowed for stablecoin backing.
“Under MiCA and the Genius Act, this is addressed by limiting reserves to high quality liquid assets and by requiring frequent, sometimes even daily valuations of those reports,” says Olivier.
The same will almost certainly apply in SA.
“So this reduces the risk that stablecoins fail not because of fraud, but because of poor treasury management. Again, this is a very clear blueprint that South Africa can effectively take.”
Read:
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At present, almost anyone can issue a stablecoin. There’s no pre-approval process and little accountability.
“Issuers must meet minimum standards before they are allowed to enter the market. It’s not about stifling innovation. It’s about stakeholder protection. Without that gatekeeping, high-risk or undercapitalised issuers can enter the market, and history has shown us how badly that could end.”
The Genius and MiCA regimes have made it a statutory right to redeem stablecoins on demand. The same will be applied in SA.
The final issue to be addressed by new regulation is currency risk.
The US has found stablecoin demand has bolstered demand for US Treasuries. The South African Reserve Bank is particularly concerned about externalising capital via cryptocurrencies in violation of exchange controls. Separate regulations will likely be issued in the near future to prevent this happening.
In a 2025 high court case it was ruled that cryptos are not currency and therefore there was no law stopping you sending bitcoin or other cryptocurrencies cross border. The Reserve Bank has appealed this and is currently preparing new regulations to cover what is evidently a giant loophole.
In the meantime, this leaves us in a very grey area from a South African perspective. There’s still a significant amount of capital flowing outside the country via cryptocurrency exchanges in SA.
