SARB Rules Out Immediate Rollout of Retail CBDC in South Africa: Focus Shifts to Wholesale Digital Currency

South Africans will not see a digital version of the rand for everyday use anytime soon, as the South African Reserve Bank has decided there is no strong case right now for launching a retail central bank digital currency. In a new position paper released this week, the central bank says while the tech works and could fit with rules, other fixes to the payment system should come first. This choice shows a careful step in a world where digital money is becoming more common, but cash still plays a big part in daily life here.

The paper, put out on 26 November 2025 along with a background note, looks at how a retail CBDC could act like a digital banknote for people to pay shops or each other. The SARB’s view comes after years of tests and talks, and it points to bigger plans for a wholesale CBDC aimed at banks and markets. As the country deals with tough money issues like high costs and uneven access to banking, this update gives a clear path forward for digital changes without rushing into big shifts.

What is a Retail CBDC and Why Was It Studied?

A retail CBDC is basically a digital banknote, set in the national money unit, that folks can use to pay businesses, shops, or one another. It is different from a wholesale CBDC, which is for deals between banks to settle trades in money markets. At its heart, a retail CBDC tries to copy normal cash but in digital shape, the SARB explains.

The study zeroed in on if this digital cash could add to physical notes, especially as payments go more online and money inclusion stays a problem. The SARB ran research and trials to see if it is doable and fits with rules and goals. They found it is technically possible and could be set up to match what the country needs.

But the paper stresses that cash is still key in South Africa. About 16% of adults have no bank account, and many rely on notes and coins because of things like poor networks, power cuts, high fees, and shops that set minimums for card swipes. Cash gives a sense of control and acts as a safety net when times are hard, keeping trust in the money system.

No Urgent Need: Prioritising Current Fixes

The SARB’s research and tests showed a retail CBDC is doable and could line up with rules and aims. “The SARB’s research and experimentation found that a retail CBDC is technically feasible and could be implemented in a way that aligns with regulatory and policy objectives,” the bank states. Yet, the check did not show a big need right now for this tool.

Instead, the bank says to keep pushing plans like the Payment Ecosystem Modernisation Programme and letting non-banks join the national payment system. “However, the analysis does not reveal a strong immediate need for such an instrument. Instead, the SARB concluded that ongoing initiatives such as the Payment Ecosystem Modernisation Programme and expanding non-bank participation in the national payment system should remain the priority in the short- to medium-term,” it adds.

These steps aim to make payments better without a new digital currency. For example, things like growing PayShap’s use, linking different money stores, letting non-banks issue e-money, setting QR code standards, and starting an open banking setup are seen as key. The SARB thinks these will help more people use digital payments and cut gaps in access.

Proof shows big growth in digital payments in South Africa, driven by banks, fintechs, and public efforts. “From the research and analysis conducted as part of this study, there is evidence of significant growth in the adoption and use of digital payments in South Africa. This has been driven by innovative solutions introduced by commercial banks, fintechs and the efforts of the SARB and other public sector agencies and partners,” the bank notes. It expects more South Africans to switch to digital as these get better.

Still, cash holds strong for some groups due to barriers like spotty infrastructure and costs. “Notwithstanding the progress made, evidence also shows that physical cash continues to play a significant role in South Africa, particularly for certain segments of the population. This prevailing cash reliance is due to barriers such as infrastructure availability, costs of digital payments and network and power issues,” the SARB says.

Long-Term Role:

Looking ahead, the SARB sees a possible need for a retail CBDC to keep public access to central bank money, which is vital in a digital world. It could also open doors to improve payments and spark new money ideas in South Africa. “In the longer-term, there may be a need for a retail CBDC to safeguard public access to central bank money − a public good that remains essential in a digital economy; and unlock opportunities to complement and enhance the existing payments landscape while supporting broader financial innovation in South Africa,” the paper states.

Central bank money is top-quality, cutting risks and making payments smooth. Being able to swap private money for safe public money builds trust and stops money troubles. “Central bank money plays a crucial role in the financial system for two primary reasons: it represents the highest quality of money, reducing risk and enhancing payment system efficiency, and its accessibility through convertibility with commercial bank money fosters trade efficiency and mitigates financial instability in a dual money system,” the SARB explains.

Keeping a mix of central and private money is key for best trade. “Balancing access to both central bank and commercial bank money is essential for maximising trade efficiency,” it adds. The bank warns not to see this as saying no to a retail CBDC forever. “The conclusion of the study should not be interpreted as a view that South Africa should not implement a retail CBDC in future,” it stresses.

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