In a significant decision for the future of digital payments, the South African Reserve Bank (SARB) has announced it will not pursue a retail central bank digital currency (CBDC) for the time being. The conclusion, detailed in a position paper released on November 27, 2025, marks a strategic pause in the country’s digital currency journey, despite confirming the technical feasibility of such a project.
The central bank’s analysis found “no compelling immediate need” for a digital Rand intended for everyday public use. Instead of a full-scale rollout, the SARB is choosing a path of strategic patience, prioritizing the modernization of the existing payment ecosystem and shifting its digital currency focus to wholesale applications between financial institutions.
The Rationale Behind the Strategic Pause
This deliberate decision stems from a practical assessment of South Africa’s current financial landscape and the real-world utility a retail CBDC would provide. A key concern for the SARB is financial inclusion for the approximately 16% of South African adults who remain unbanked. The bank’s research indicated that a digital currency would not be a silver bullet solution unless it could successfully mimic cash’s most vital features: the ability to work offline, universal acceptance, ease of use, strong privacy, and low cost.
Simultaneously, the SARB is prioritizing a suite of ongoing digital payment initiatives that promise more immediate benefits. These include modernizing the national payment system, expanding services like the faster payment system PayShap, and enabling greater participation for non-bank providers. The bank’s view is that enhancing this existing infrastructure is a more practical and impactful route to improving financial access and efficiency in the short to medium term.
The position paper also highlighted the SARB’s growing wariness of the crypto asset sector, flagging it as a potential risk to financial stability. The bank cautioned that digital tokens like stablecoins could be used to bypass the country’s exchange controls, which regulate capital flows.
A New Focus and the Global Context
The shelving of the retail CBDC does not mean the SARB is abandoning digital currency innovation. The bank has clearly stated its intention to “pivot toward further exploration of wholesale CBDC“. This next phase will focus on how a digital currency can enhance financial market innovation, improve the efficiency of cross-border payments, and strengthen systemic resilience for transactions between banks and financial institutions.
South Africa’s cautious approach stands in contrast to the global CBDC race but is not an isolated one. According to global trackers, only three countries have fully launched a digital currency to date, while many others are still in research, development, or pilot phases. The United States has also recently moved to pause its own CBDC work, placing South Africa among a group of nations opting for a “wait, watch, and learn” strategy.
The SARB has emphasized that its current position should not be seen as a permanent rejection of a retail digital Rand. The bank will continue to monitor global developments and domestic needs closely, ensuring it remains prepared to act should a clear and compelling need for a retail CBDC emerge in the future. For now, the immediate milestone will be the outline of its plans for the wholesale CBDC exploration phase, which it has promised to communicate in due course.
