South Africa isn’t the only country rethinking its central bank digital currency (CBDC) plans.
Summary
- South Africa’s Reserve Bank is postponing a retail CBDCs, prioritizing payment system modernization and wholesale digital currency projects instead.
- Efforts target faster, more affordable digital services and connectivity improvements between financial institutions.
- The central bank warned of risks posed by cryptocurrencies and stablecoins, emphasizing regulatory measures and licensing for crypto service providers to maintain financial stability.
In a significant shift for the global financial landscape, the rollout of CBDCs has hit a series of roadblocks in 2025, as several countries press pause or slow their efforts to introduce state-backed digital currencies.
A mix of economic uncertainty, regulatory challenges, and concerns over market readiness have prompted central banks to reconsider the risks of diving into the digital currency pool.
South Africa has gaps in its national payment system
Approximately 16% of South African adults remain unbanked, with many relying on cash for most transactions, according to the bank’s findings. The institution seeks to expand access through faster and more affordable digital services.
A retail CBDC would need to replicate the characteristics of physical cash, including offline functionality, widespread acceptance, simple user interfaces and robust privacy protections, the bank stated. These standards must be satisfied before any rollout can commence, according to a new report.
Recent efforts have focused on updating settlement infrastructure and improving connectivity between financial institutions, which the bank believes can establish a foundation for digital finance. The report noted that a retail CBDC may integrate into this system at a later stage when benefits exceed costs. The document referenced slow adoption rates in multiple countries that have launched digital currencies, which has influenced South Africa’s cautious approach.
Other scenarios
- South Korea: The Bank of Korea has officially suspended its ambitious CBDC project, “Project Han River,” signaling a pause in its plans to test a digital won. The move comes as the country faces increasing competition from stablecoins and private-sector digital payment solutions, shifting the focus toward improving existing payment infrastructure instead.
- United Kingdom: In a surprising pivot, the Bank of England has indicated it will slow its “digital pound” project, suggesting that private-sector solutions might offer a more viable alternative to a national cryptocurrency. With the economic landscape in flux, the bank has opted for further evaluation rather than immediate action.
- Global Trend: According to a 2025 report by OMFIF (Official Monetary and Financial Institutions Forum), 31% of central banks worldwide have delayed or paused CBDC plans. This trend, spanning from emerging markets to developed economies, highlights the growing concern that CBDCs may not yet be the answer to modernizing payment systems, despite their potential.
What’s driving the delay?
Several factors are at play behind the CBDC slowdown. A key concern is the ongoing regulatory uncertainty surrounding stablecoins, whose rise has made central banks reconsider the need for their own digital currencies. Countries like South Korea have shifted focus toward stablecoin legislation instead, while others, like the UK, are pondering whether private solutions can achieve similar goals without the need for a fully state-run system.
Economically, the cost and complexity of launching a national digital currency is hard to justify when existing systems continue to serve their purpose. In countries like South Korea and the UK, governments have opted to divert resources to other critical economic issues rather than pressing forward with digital currencies. Furthermore, some central banks are concerned about public adoption, fearing that CBDCs could face slow uptake or pushback from citizens used to traditional banking systems.
A Global Pause or Just a Hiccup?
While the delay in CBDC projects has made headlines in 2025, it’s not a blanket trend. In fact, many emerging markets are accelerating CBDC development, particularly in the Middle East and parts of Africa, where digital currencies could help boost financial inclusion. These markets are also seeing increased competition from China’s digital yuan, which is already in circulation in select regions, prompting other countries to fast-track their own plans.
But for the moment, the majority of developed nations appear to be hitting the brakes on digital currencies—either to reassess the economic implications or to wait for stablecoin regulations to stabilize the digital assets market before diving deeper into CBDC waters.
