Luno, the cryptocurrency exchange, has warned that South Africa's proposed regulatory framework for stablecoins could leave the country isolated from global payment developments and hinder cross-border transactions. The company's concerns, detailed in a submission to the Intergovernmental Fintech Working Group, focus on draft rules published in June 2026 that would require stablecoins to be backed exclusively by rand-denominated assets.

The proposed regulations mandate that stablecoins issued in South Africa must be pegged to the rand and backed by local cash or cash equivalents. Marius Reitz, Luno's general manager for Africa, argues this approach could limit the utility of stablecoins for international trade and remittances. "By restricting stablecoins to rand-denominated assets, South Africa risks creating a closed-loop system," Reitz said. He suggested the rules could stifle innovation and place South African businesses at a competitive disadvantage in a global economy increasingly exploring digital currencies for settlement.

Luno's submission advocates for a more flexible framework that would permit the use of stablecoins pegged to major global currencies, such as the US dollar or euro, for cross-border transactions. The company contends this would align South Africa with emerging practices in other jurisdictions and support the broader goals of the African Continental Free Trade Area (AfCFTA), which seeks to reduce payment frictions across the continent. The draft regulations are part of South Africa's broader move to bring crypto assets under formal oversight, following the Financial Sector Conduct Authority's decision to classify cryptocurrencies as financial products.

The debate over stablecoin rules occurs as digital payment infrastructure continues to expand across Africa. In a separate development, payments technology firm ACI Worldwide announced the go-live of its partnership with Kwik, a payments service provider operating in Nigeria, Ghana, and Kenya. The collaboration, announced on June <date missing from source>, 2026, integrates ACI's Secure eCommerce solution to help Kwik offer local payment methods and process transactions in multiple currencies. This expansion aims to facilitate smoother payments for global merchants and marketplaces serving African consumers.

This contrast highlights a central tension in African fintech: between building robust, regulated national frameworks and enabling seamless cross-border flows. South Africa's proposed stablecoin model prioritizes monetary control and financial stability, a concern for a central bank managing a currency with a history of volatility. However, the industry warns that overly restrictive rules may cause the country to miss opportunities as digital asset use grows in trade and remittances. The National Treasury and the Intergovernmental Fintech Working Group are now reviewing feedback from Luno and other stakeholders before finalising the policy.