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South African Reserve Bank Governor Lesetja Kganyago has warned that the growing use of dollar-backed stablecoins could erode Africa’s monetary sovereignty if left unchecked. During a recent interview, he explained that stablecoins are increasingly used to “short” local currencies, especially in countries facing foreign exchange shortages. This trend aligns with a stark prediction from Standard Chartered, which fears such stablecoins could pull up to $1 trillion in deposits from emerging markets. The core issue is that over 99% of stablecoins are pegged to the US dollar, making them a tempting safe haven during economic instability. Nations such as South Africa, Kenya, Egypt, and Morocco face heightened risks due to fiscal and trade deficits. Kganyago urged African governments to strengthen domestic currency markets rather than ban stablecoins outright, noting South Africa already classifies them as assets.
CNBC Africa