South Africa Delays Retail CBDC Rollout After Multi-Year Assessment

In its position paper the central bank concluded there is “no compelling immediate need” to issue a retail CBDC, instead opting to advance existing reforms to the national payments infrastructure.

These documents were issued alongside a background note and were made publicly available on the SARB website. They represent a multi-year journey that entailed technical experiments, stakeholder consultations, and assessment of use-cases for different forms of CBDC.

SARB refers to a retail CBDC as a fully digital banknote denominated in the national currency, available for use by both people and businesses for regular payments, whereas a wholesale CBDC would be used for settlement between financial institutions.

Although the bank's research confirms that a retail digital currency is technically viable and could therefore be implemented in a manner that is consistent with regulatory and policy goals, the core conclusion remains that the immediate benefit is limited. SARB argues that the added value from existing electronic means of payment or cash is not significant enough to motivate the complexity for a countrywide CBDC deployment at this stage.

Instead, the bank said resources should be channeled into modernizing the broader payment ecosystem. This involves increased non-bank participation in the national payment system, standardization of QR codes, interoperability between different digital payment platforms, and launch of open banking / open finance frameworks, most of which are already in the pipeline.

SARB pointed out that though innovations from banks, fintech firms, and public-sector programmes have spurred big increases in digital payments, cash remains crucial for various structural realities, including access disparities, network reliability, transaction costs, and the prevalence of informal transactions.

The core case for delay is that broad retail CBDC adoption would need the digital currency to match or outperform cash on several dimensions: resilience in offline mode or when power/networks are down, universal acceptability from urban to rural areas, low or no cost per transaction, usability by all demographics, and appropriate protections for privacy. That is a pretty high bar for a country that still has variable banking penetration and where digital infrastructure is not uniformly robust.

Instead of retail CBDC, the SARB indicates that its next step would be to consider a wholesale CBDC-a digital means for banks and financial markets likely to enhance cross-border payments, settlement efficiency, and systemic resilience.

The decision reflects broader policy priorities: improve payment rails now, rather than leap to a fully new monetary instrument whose benefits over existing systems are uncertain. It also mirrors a cautious global trend among central banks: many are experimenting with CBDC technology, but few are committing to public-facing rollout without first ensuring infrastructure readiness and regulatory clarity.

Yet the SARB does not completely close the door on retail CBDC. In the longer run, says the position paper, a digital equivalent of cash may still be needed to maintain public access to central-bank money, notably in an increasingly digitized economy dominated by private means of payment.

SARB's stance lays a clear marker: efforts to advance payment-system modernization may currently yield more immediate-and safer-gains than rushing into digital currency issuance.

It also underlines a nuance in thinking about financial inclusion: the issuance of a CBDC alone does not equate to better access. Without reliable infrastructure, accessible devices and trust in digital identity and protections of privacy among them, such a digital currency could easily replicate existing inequalities in new forms.

SARB's decision may dampen short-term speculative excitement around a "digital rand." The focus today may shift to collaboration on payment system upgrades, open-finance frameworks, and non-bank participation. To financial inclusion advocates, though, this decision serves as a reminder that inclusion is more than the mere access to bank accounts or digital rails, it's all about affordability, infrastructure, and usability of payment tools amongst marginalized communities.

In a global context in which more than a hundred jurisdictions are at various stages of CBDC research, pilot and deployment, SARB's approach adds another data point: in some cases, "not yet" may be more prudent than "first out".