Stablecoins: Why advisers should pay attention

Stablecoins already account for 43% of all cryptocurrency transaction volumes in Africa, according to Chainalysis data – and, as CityWire South Africa’s Ruan Jooste writes, “Stablecoins are fast becoming one of the building blocks of global capital markets.”

It’s against that bigger picture – and one of increasing regulatory focus – that Mesh has launched yZAR, South Africa’s first yield-bearing stablecoin.

Pegged one-to-one to the rand, yZAR pays daily yield aligned with local money markets, settled monthly. It’s tradable 24/7 on the Mesh.trade platform, with investors able to make instant transfers between yZAR and Mesh’s transactional mZAR, and vice-versa, with no platform fees applied.

In an interview with CityWire South Africa, Mesh MD Connie Bloem described yZAR as a solution to the problem of “lazy cash”. “Advisers know that client funds don’t get invested the moment they hit an account,” she said. “They sit idle, sometimes for days or weeks. With yZAR, even balances held for 24 hours will earn yield without giving up liquidity.”

Mesh charges a 50 basis-point cut of the yield, which means that if underlying deposits earn 5.5%, investors will receive 5%. “The target yield is 8-10%, which Bloem said is competitive with money market funds (currently around 6.5-7.5%) but with the added benefit of instant access,” CityWire South Africa reported. “Unlike funds that impose lock-up periods or notice requirements, yZAR can be redeemed at any time, with settlement cycles as short as 15 minutes. For advisers, this creates a practical way to put idle client balances to work.”

Bloem said that yZAR was designed to complement rather than replace money market allocations, and could be used to earn yield on cash sitting between contributions, redemptions or portfolio rebalancing events.

Regulatory focus

As the article notes, the yZAR launch comes as South Africa’s Financial Sector Conduct Authority (FSCA) has stepped up its scrutiny of decentralised finance (DeFi). “A study published earlier this year projected that the domestic DeFi market could generate R51.6m in revenue in 2025, with 378,000 users – predominantly retail investors,” CityWire South Africa pointed out. “The FSCA flagged smart contract vulnerabilities, cybersecurity threats and regulatory uncertainty as key risks, and singled out stablecoins as a likely priority for oversight.”

Mesh, however, has always regarded regulatory compliance as a non-negotiable, engaging with regulators throughout its licensing process. “We obtained our Financial Services Provider (FSP) licence in late 2024, and we want to operate under a higher degree of trust. We are regulated locally, audited monthly, and fully bankruptcy-remote,” Bloem said in the interview.

She then contrasted South Africa’s cautious stance with developments in developed markets. She argued that South Africa’s framework is strong, but that restrictive rules such as Board Notice 90 – which prevents unit trusts, exchange traded funds and pension funds from holding crypto assets – risk stifling innovation.

The Takeaway for Advisors

The CityWire South Africa article emphasised that Mesh.trade clients hold assets in their own blockchain accounts – not pooled on Mesh’s balance sheet – which allows balances to be verified on-chain. “Importantly,” it added, “yZAR is issued through a bankruptcy-remote special purpose vehicle.” And, as Bloem explained: “If anything happened to Mesh, no one could take client assets as part of liquidation proceedings.”

“For advisers, the takeaway is not that yZAR is ready to replace traditional money market allocations, but that the conversation has shifted from theory to practice,” CityWire South Africa observed. “With stablecoin adoption accelerating globally and in Africa, advisers will increasingly need a view on how these products fit into cash management and portfolio construction.”

• For more information on yZAR, view the asset page.