Crypto analysts and financial experts have continuously argued over its long-term viability. The debate is simple. Will crypto still be used 20 years from now? The crypto market is currently in a poor state. Bitcoin, the flagship crypto asset, is currently down by 45% from its all-time high of $126,080. At press time, the crypto asset is trading at $69,342, putting corporate firms like Strategy, which heavily backed the project, in a tight situation. The huge takeaway from the existential debate on cryptocurrencies is that they are largely speculative assets. In simple terms, cryptocurrencies are just too volatile to be banked on for the long term. Meanwhile, stablecoins have always been hailed as the only crypto asset to have achieved a product-market fit. A product - market fit happens when a product perfectly solves a problem for a specific group of people who are always willing to pay for it. Stablecoins are crypto assets designed to maintain a fixed value. They could be pegged to the value of fiat money or to a physical commodity, such as gold, at a 1:1 ratio. Stablecoins have long been predicted to be the only category of crypto assets that will stand the test of time. They solve a major problem in the ecosystem and offer other upsides, such as borderless, laser-fast transactions. South Africa, the largest economy in Africa with a nominal GDP of $443 billion, may have raised the stakes by launching a new stablecoin project in the middle of the bear market. South Africa backs ZARU Stablecoin with Rand Early this month, South Africa’s financial institutions collectively announced the launch of ZARU, a new stablecoin backed by the country’s local currency, the Rand. According to them, ZARU is designed to modernise payment and financial infrastructure. This enables both retail and institutional users to transact at the speed of the internet while bolstering the local financial system. The ZARU stablecoin project is facilitated and supervised by two entities. Standard Bank, which offers banking services, and Sanlam Financial Markets, which offers asset management services. Every ZARU digital coin issued is backed by cash reserves held at Standard Bank, Africa’s largest bank. Besides Rands, the reserves could be bank deposits or South African government bonds equivalent in value. The reserves are managed in accordance with the Asset Liability Management Agreement with Sanlam Specialist Asset Manager. “Sanlam Specialist Asset Manager is excited to provide asset liability management services to enable support for this initiative, given its potential to significantly contribute to financial inclusion. We’re connecting traditional financial markets to the world of blockchain to enable cheaper, faster payments,” Jacques Le Roux, CEO of Sanlam Financial Markets, said during the launch. The financial entities supporting this project include Luno, EasyEquities, and Lesaka. They are collectively bringing trusted financial infrastructure and blockchain innovation to the first Rand-backed stablecoin. South Africa joins Nigeria on the list of African countries adopting cryptocurrency. These countries are increasingly aligning their traditional financial system with the new technology. The development is another win for the global crypto space. It lends more credence to the prediction that stablecoins are the real crown jewel of the cryptocurrency market. ZARU and CNGN: South Africa and Nigeria find a middle ground The ZARU stablecoin project in South Africa follows the CNGN stablecoin project in Nigeria. These two African countries, initially sceptical of cryptocurrency, are finding a middle ground that combines innovation and stability. Chuta Chimezie, Founder/Coordinator of Blockchain Nigeria User Group and Chairman of the National Blockchain Policy Steering Committee at NITDA, describes this as a hybrid. “Generally speaking, Stablecoins like ZARU and cNGN are part of a broader shift that challenges two old assumptions: Money must be issued only by central banks and Blockchain is inherently speculative and outside mainstream finance. What we’re witnessing in South Africa and Nigeria is a hybrid,” he said. “These are regulated, compliant digital representations of local currency, designed for efficiency, inclusivity, and economic integrity — not just for crypto traders, but for real people and real businesses.” “To me, African markets are not merely adopting stablecoins; they are tailoring them to local financial realities. I honestly feel that this is exactly the kind of leapfrog in financial infrastructure that Africa has been poised for.” Chimezie further explained that stablecoins are not new in Africa. He called them a plot point in the story of economic sovereignty in Africa. He maintains that stablecoins have the potential to liberate the continent from its various economic issues. At the moment, ZARU is only available to qualified institutional investors via the Luno and EasyEquities trading desks. The Rand-backed stablecoin is still not available to retail investors. Luno and EasyEquities are currently working towards making the asset available to retail users. Retail users are expected to make up the bulk of ZARU users. This follows its utility for cross-border payments in record time and with great efficiency. Africa’s largest economy launching a stablecoin in the middle of a bear market proves one thing. Traditional financial institutions are not willing to throw the baby out with the bathwater. Despite the chronic volatility of crypto assets, stablecoins are proving useful and winning the trust of the old financial world, which still calls the shots in global finance.
