South African Reserve Bank Says Retail CBDC Not a Priority, Focus Shifts to Payment System Upgrade

Quick Breakdown 

• SARB says there is no immediate need for a retail CBDC, prioritizing payment system upgrades instead.
• The bank warns that crypto and stablecoins pose risks and may be used to evade capital controls.
• Globally, CBDC development is accelerating, with 49 countries currently running pilots.

SARB pushes modernization over digital currency rollout

The South African Reserve Bank (SARB) says it does not see an urgent need to launch a retail central bank digital currency (CBDC), arguing instead that the country should focus on upgrading its existing payments infrastructure.

Source: Resbank

In a paper released on Thursday, the central bank noted that while a retail CBDC is “technically feasible,” there is currently no strong or immediate justification for deploying one. Ongoing initiatives, such as payment system modernization and expanding access for non-bank players, remain the bank’s 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,”

the bank stated.

Shift toward wholesale CBDC and cross-border experiments

Instead of pursuing a consumer-facing digital currency, SARB will focus on exploring wholesale CBDC use cases and improving cross-border payment efficiency, areas it sees as offering more immediate value.

SARB’s findings also highlighted unresolved challenges in South Africa’s financial system, with nearly 16% of adults still unbanked. The bank stressed that any future retail CBDC must provide benefits equal to or better than cash, including low costs, offline functionality, privacy, and universal acceptance.

The central bank has recently taken a tougher stance on the crypto sector. In a separate report released earlier this week, SARB listed crypto assets and stablecoins as new risks within technology-driven financial innovation, warning that digital assets can be used to bypass the country’s Exchange Control Regulations, which govern capital flows.

Global CBDC efforts are gaining pace

Globally, only Nigeria, Jamaica, and The Bahamas have fully launched CBDCs, according to the Atlantic Council. Another 49 countries are running pilots, 20 are developing, and 36 are researching digital currency models. The United States, meanwhile, has paused its CBDC exploration under the Trump administration.