South Africa is one of the countries at the forefront of the global digital economy, with rand-backed stablecoins available in the market. Currency-backed stablecoins are also available in dollar, euro and the Singapore dollar, for example.
A stablecoin is tokenisation in its simplest form, a mechanism becoming the standard of mainstream finance. Essentially tokenisation means taking something that already has value — such as gold, a government bond, a unit of currency or a share in a company — and creating a digital token that represents ownership of it. The tokenised asset exists in the “real world”, and all changes in ownership are recorded securely on a blockchain.
Cross-border payments through traditional banking systems would take two or three days and have to pass through a number of intermediary banks, each taking a cut and adding a delay. A tokenised version of that same payment can settle in minutes, for a fraction of the cost, and it skips the chain of intermediaries.
Now imagine a future where a South African retailer is expanding into Kenya and needs to pay a Nairobi-based supplier every month. At the moment, that payment moves through several banks in different countries, takes days to clear and loses value at each currency conversion along the way. With a rand-backed stablecoin, the retailer could send the payment directly to the supplier’s wallet. It would be converted to Kenyan shillings on arrival and settled the same day. No correspondent banks, no multiday wait, no fees eating into the margin. This is the kind of everyday cross-border payment tokenisation is built for.
Global powerhouses are adopting this at scale. JPMorgan runs its own tokenised settlement network for institutional clients. Standard Chartered has piloted tokenised deposits. The Reserve Bank of India, the Monetary Authority of Singapore and the European Central Bank are all running their own tokenisation pilots for wholesale settlement. Tokenised assets are where serious money is placing its bets on how settlement will work in the years to come.
South Africa has proved this through the Intergovernmental Fintech Working Group and the Reserve Bank’s Project Khokha — our institutions have demonstrated that tokenised settlement on distributed ledgers cuts clearing times and operational risk dramatically. Yet, despite the Bank’s pioneering research and the local industry being at the forefront of this trend, our regulatory framework risks being caught on the wrong side of the argument.
Our challenge is not a lack of technical capability but a lack of regulatory (read: commercial) certainty. Even though the Bank tested the technology in controlled environments, South African businesses still operate in a legal vacuum regarding digital assets.
Corporate treasurers, institutional investors and bank boards cannot confidently say how a tokenised bond or a tokenised gold certificate is classified under South African law. This lack of clarity creates a hidden tax on local businesses. Global competitors build instant settlement rails into their supply chains, while we remain guarded by legacy infrastructure that locks up working capital for days. In high interest rate environments, where liquidity and cash flow speed determine commercial success, multiday settlement is a handicap we can’t afford.
Unlocking this potential does not require a lawless free-for-all. Institutional market participants need forward-looking guidance on how tokenised assets such as stablecoins are treated. We need clear rules that protect market integrity and give South African institutions the green light to innovate and grow. Responsible industry players are more than willing to have the engagement necessary to achieve a win-win scenario for all involved.
Tokenisation will not wait. The world is using it. The question is whether we will be able to do so too.
De Wit is country manager for Luno South Africa
