Stablecoins have become the payment rails of the modern digital economy, providing one of the clearest examples of how digital assets are increasingly integrating with traditional finance. However, due to lags in regulatory development, South Africa remains locked out of the significant economic benefits offered by the global adoption of stablecoins.
Speaking at the inaugural Luno Institutional Digital Asset Conference (LIDAC), on 11 June, Luno CEO James Lanigan said the rapid growth of stablecoins, increasingly used for business payments globally, provide a proof point of how digital assets have evolved into an integral part of the global financial system.
But while the world’s financial infrastructure is moving rapidly on-chain, led by some of the largest multinational financial organisations in the world – the likes of Visa, Mastercard, BlackRock, JP Morgan Chase, Citi, Société Générale – South Africa is falling behind.
The current draft Capital Flow Management Regulations, out for comment until June 30, will likely prohibit stablecoins being used by businesses to make cross-border payments and repatriate funds. This is even as they provide low-cost instant payment solutions and deep liquidity, particularly in dollar-strapped African markets.
It is essential that South African regulation allow this modern payment system, which can be used to increase capital flows into South Africa.
Stablecoins, which are digital assets pegged to real world currencies, are leading to a fundamental shift in the architecture of global finance. The world’s financial infrastructure– the largest banks, asset managers and payments companies – are no longer just experimenting with blockchain technology but are incorporating it into their backend systems and using stablecoins for payments and financial management.
Stablecoins are already settling more value annually than Visa and Mastercard combined.
This is driven by the use of crypto by businesses, in addition to ordinary investors.
Stablecoins accounted for $33 trillion in payments and blockchain transfers in 2025, according to data shared by Bloomberg. This is almost double the $17 trillion in spending facilitated by Visa in 2025.
Unlike traditional payment systems that rely on multiple intermediaries, stablecoins using blockchain technology enable businesses to move money domestically and across borders significantly faster, more efficiently and at lower cost than legacy payment systems.
South African businesses with operations elsewhere in Africa approach Luno almost daily seeking ways to use stablecoins, such as ZARU, to move funds between subsidiaries and repatriate profits back to South Africa. This is due to a shortage of foreign currency on the continent and the difficulty of moving money out of certain African countries.
However, the absence of banking reporting codes and regulatory frameworks for stablecoin transactions currently prevents these activities. South African businesses are reluctant to use stablecoins for cross-border transactions and repatriation of funds from the rest of Africa because the regulations do not expressly provide for it. This reduces payment flows into the country and undermines local businesses and ultimately reduces tax revenue.
“Local stablecoins are critical infrastructure to support domestic payments and treasury flows, while dollar stablecoins provide a fast bridge to global commerce and cross-border settlement. Together, they reduce friction, lower costs, and make money move more efficiently at home and abroad,” said Lanigan.
For local businesses whose treasury, revenues, expenses and reporting are all rand-based, a rand stablecoin can provide a seamless and cost-effective payment solution.
A rand-backed stablecoin ZARU was launched in 2025 in a partnership between Lesaka, Easy Equities, Sanlam Specialised Asset Management, BlockTower and Luno.
Lanigan added, “It is essential that South Africa moves, through thoughtful revision of the draft Capital Flow Management Regulations, to unlock the economic growth potential of stablecoins. Without the integration of stablecoins into the local financial mainstream, South Africa will limit its competitiveness in the modern economic system, falling further behind as the rest of the world upgrades its financial infrastructure”.
LIDAC has brought together leading bankers, CEOs, asset managers and institutional investors.