Dawie Roodt sends warning about digital Rand
Efficient Group chief economist Dawie Roodt has warned that central bank digital currencies (CBDCs) could become a powerful tool for authoritarian control, while private-sector stablecoins offer a necessary counterbalance.
Roodt explained that a CBDC is, by definition, a programmable currency, meaning whoever controls it can manipulate what individuals do with their money.
“They could reduce or increase the value of the wallet that is on your cellphone,” Roodt said at the conference.
He outlined several ways a government could abuse a programmable CBDC, including restricting purchases of specific goods, confiscating portions of a person’s funds, or shaping consumption patterns.
A CBDC would also make personal finances fully transparent to the issuing authority, making tax evasion or avoidance impossible and giving the state detailed insight into every transaction.
Roodt acknowledged that he was describing an extreme scenario and that, in practice, CBDCs would likely include safeguards and offer certain advantages.
“But theoretically it is certainly possible that a central bank digital currency could be a very dangerous weapon in the hands of a dictator,” he said.
Roodt shared his views at the Future of the Nations 2026 conference hosted by Lex Libertas, elaborating on remarks he made during a budget presentation in February.
He had warned at that presentation that dollar-pegged stablecoins with lower transaction costs could eventually displace the South African rand.
The South African Reserve Bank (SARB) has been actively exploring a CBDC since May 2021, when it launched a feasibility study into a general-purpose retail digital currency complementary to cash.
The SARB concluded the first phase of that study towards the end of 2022 but decided not to publish its detailed findings, saying they required significantly more work.
It has since launched Project Khokha 2x, which focuses on wholesale CBDCs and stablecoins, and continues to explore possible use cases for digitised money.
The original Project Khokha (PK) was a 14-week trial that demonstrated a blockchain-based system for interbank settlements. PK2 focused on tokenisation, exploring the settlement of SARB debentures.
Stablecoins as the antidote
Roodt contrasted CBDCs with private-sector digital currencies such as Bitcoin and stablecoins, arguing that the latter are not subject to the same risks of government overreach.
Stablecoins are privately issued cryptocurrencies pegged to fiat currencies or other assets, typically backed by reserves of cash or government bonds held by the issuer.
Unlike volatile cryptocurrencies, whose prices are driven purely by supply and demand, stablecoins are designed to maintain a stable value — most commonly, one token equals one US dollar.
This stability makes them practical for everyday transactions, paying salaries, and saving, without the risk of sharp overnight price swings.
Roodt said private-sector stablecoins are the natural antidote to the potential dangers of CBDCs, and predicted their growth would accelerate.
“I think this will naturally happen — private-sector digital currencies that oppose CBDCs,” he said, adding that the variety of stablecoins already available demonstrates this trend.
He noted that stablecoins can be backed by a range of assets, including rands, dollars, gold, or other financial instruments, giving communities flexibility.
The stablecoin market has received a major regulatory boost in the United States through the GENIUS Act, signed into law by President Donald Trump in July 2025.
This legislation established the first comprehensive federal framework for payment stablecoins, requiring issuers to maintain reserves of high-quality liquid assets equal to 100% of stablecoins in circulation.
Rand-based stablecoins and community currencies
In South Africa, two rand-pegged stablecoin projects are already operational — the long-running ZARP, which is available to anyone, and the newly launched ZARU, which is restricted to institutions.
Roodt said the stablecoin model opens possibilities for communities to create their own private money tailored to specific needs and backed by assets of their choosing.
He described a scenario where a community could issue its own currency backed by gold, with low transaction costs, and designed to serve local economic needs.
“It is possible that in the future we may have far fewer currencies, or it is certainly possible that we may have many more currencies,” Roodt said.
During his February budget presentation, Roodt had warned that smaller currencies like the rand could eventually be displaced by dollar-pegged stablecoins with lower transaction costs.
Loading ...