Rand-backed Stablecoins

By 2025, the total stablecoin market capitalisation exceeded $300-billion, up from less than $5-billion in 2019, underscoring both accelerating adoption and growing institutional relevance.

In the South African context, stablecoins present compelling real-world utility. They combine the trust and familiarity of traditional fiat currency with speed, transparency, programmability and the efficiency of a blockchain-based settlement system.

Importantly, stablecoins also have the potential to advance financial inclusion – an enduring and critical policy objective for South Africa – by lowering barriers to participation in the digital economy, given the ease of integration of blockchain technologies compared to legacy banking systems.

THE BENEFITS

At a foundational level, Rand-backed (ZAR) stablecoins offer three structural benefits. First, they enable the digitisation of the Rand, creating a native digital representation of ZAR that upgrades existing payment rails. Second, they reduce domestic and cross-border payment costs by lowering reliance on card networks, interchange fees and legacy correspondent banking infrastructure. Third, they materially improve liquidity and cash-flow management, particularly for small and medium enterprises, by enabling real-time settlement on a 24/7/365 basis, removing the heavy cost of capital requirements to run transactional businesses."These attributes directly address long-standing pain points faced by South African merchants and consumers.

Imagine a tavern owner in Soweto enjoying the bustling long weekend trade. When customers pay with a rand-backed stablecoin, the payments go directly into a digital wallet right at the moment of sale, instead of taking days to clear. This quick access helps him restock supplies swiftly and pay his food and drink suppliers immediately. The benefits are clear: better cash-flow control, lower transaction costs and less dependence on physical cash, making his tavern more secure and more efficient.

South Africa already hosts three rand-denominated stablecoins – ZARP, ZAR Supercoin (ZARSC) and ZARU. ZARP initially concentrated on decentralised finance applications before expanding into broader use cases. ZAR Supercoin is popular within gaming ecosystems, and ZARU has been strategically positioned for institutional utilisation, with a specific focus on digitisation of the cash economy and optimisation of existing card rails in retail. This demonstrates market-readiness and an expanding base of local expertise.

Taken together, South Africa’s advanced payments infrastructure, the growth of fintech innovation, well-de!ned use cases and a population receptive to digital solutions indicate strong underlying readiness for stablecoins to become mainstream. Yet despite these favourable conditions, adoption has lagged behind potential. Regulatory clarity remains

The Intergovernmental Fintech Working Group (IFWG) has made meaningful progress through its March 2026 discussion paper, which addresses key regulatory considerations for stablecoins. However, the consultation process needs to be translated into a binding, enforceable framework that provides certainty for market participants and protects systemic integrity. Key elements of such a framework include full one-to-one backing with segregated reserves, regular and transparent reserve reporting, clear separation of roles across wallet provision, custody, exchange and treasury functions, minimum entry standards, and guaranteed redemption rights.

International experience reinforces this point. The United States’ GENIUS Act and the European Union’s Markets in Crypto Assets regime both entered into full effect in 2025, creating regulatory certainty that enabled stablecoin markets to thrive. Stablecoin transaction volumes are estimated to have grown by more than 70 per cent in 2025 alone, with retail usage increasing tenfold.

Rand-backed stablecoins represent more than a technological innovation; they offer South Africa a faster, cheaper and always-on payments rail with tangible economic benefits. Supported by a well-designed framework, ZAR stablecoins can advance financial inclusion, enhance SME competitiveness, modernise the payments ecosystem, and ensure South Africa captures the value of digital money innovation in Rand on its own terms.

Lesaka is a partner in ZARU, a South African institutional-grade, Rand-backed stablecoin launched in February 2026 to enable 24/7, instant and low-cost digital payments.