A while back, in an investors group I belong to, someone mentioned in passing that South Africa does not do quantitative easing. It surprised me, so I asked what seemed like the obvious follow-up. If that is true, where does the money come from? The question was treated as rhetorical, the sort you are meant to nod along to rather than answer, and no one actually gave me a reply. It nagged at me, so I went looking for the answer myself. Six months of reading and research later, what follows is what I found.

The honest answer is more interesting than a simple yes or no, and it begins outside South Africa, because this is a global story before it becomes a local one. It also begins by looking past the tool we are all trained to watch. The interest rate makes the news and moves the Rand, so it feels like the main event, yet it is not the lever that quietly shapes the value of your savings. That job belongs to the power to create money from nothing, so it helps to see how that power has been used elsewhere before we bring the question home.

Say the words money printer and two pictures usually come to mind. One is Zimbabwe, with its wheelbarrows of banknotes and its hundred-trillion-dollar note framed as a bad joke. The other is America, some official in Washington standing over a press that never stops. Both images are comfortable, because they put the problem somewhere else, either in a broken state far away or in a superpower whose decisions are not ours to make. What neither picture invites you to do is look closer to home, which is exactly where a South African reader should be looking.

The largest money creation in history did not come from any failed state. It came from the most respected central banks in the world, staffed by careful economists, and it went by the reassuring name of quantitative easing. For anyone who has not met the term, QE is nothing more exotic than a central bank creating new money to buy assets, usually government bonds.

Take the United States. Across most of its history, the Federal Reserve had created roughly 0.9 trillion dollars in total. The 2008 financial crisis changed that. To steady the system, the Fed began creating new money on a large scale to buy government bonds, and by the middle of the 2010s its balance sheet had grown to about 4.5 trillion dollars.

Then the pandemic arrived, and the numbers stopped resembling anything in the textbooks. Over a few weeks in 2020 the Fed created around 3 trillion dollars. The broad American money supply went from roughly 15.3 trillion dollars at the start of that year to 18.7 trillion within months. On one common measure, about a fifth of all the dollars that had ever existed were created in that single year. The balance sheet eventually peaked close to 9 trillion dollars, roughly ten times where it had sat before 2008.

Europe, Britain and Japan did much the same, buying bonds with newly created money by the trillion. The consequence showed up in 2021 and 2022 as the worst inflation the developed world had seen in four decades, arriving in more or less every country at once. That was not bad luck; it was the printer doing what printers do.

So money creation is not an exotic disease of broken economies. It is the ordinary working method of the modern financial system, and South Africa belongs to that system like everyone else. Our version is quieter and more gradual, run in a way that keeps ordinary savers from feeling the water heating around them until much of the damage is already done.

This is usually the point where South Africans breathe out, because we are told, accurately, that the Reserve Bank never ran QE on anything like the American scale. That much is true. It is the phrase on that scale that deserves a second look, because something did happen here, and most people have never had it explained to them.

Start with the machinery. The Reserve Bank is the sole supplier of what is called base money, the electronic reserves that banks hold at the central bank, and it creates that money with a keystroke whenever it decides to buy assets. Early in 2026 all of it, notes and coins and reserves together, came to about R554 billion. Above that sits a broad money supply north of R6 trillion, roughly eleven times larger, most of it conjured by ordinary commercial banks each time they grant a loan. That machinery has been used more actively than most people realise.

In March 2020, with the government bond market seizing up, the Reserve Bank started buying South African government bonds in the secondary market and paying for them with money it created for the purpose. By the end of October it had bought R38.8 billion worth. In March alone its balance sheet grew by close to 15%. Buying government bonds with newly created money is exactly what the rest of the world labels QE, and the Bank worked hard, in public and in writing, to keep that label from being attached. Its reasons had merit. Our interest rates were not at zero, the stated goal was to thaw a frozen market rather than stimulate spending, and the purchases were made from banks and asset managers rather than directly from the Treasury. All fair. The mechanics, though, were still the mechanics, and even Governor Lesetja Kganyago seemed to notice the strain. In a lecture that June he said:

Academics later gave the episode a name, the quantitative easing paradox, because the Bank managed to carry out the mechanics of money printing largely by refusing to use the words.

The second intervention is larger and far less understood. Years of the Rand weakening against major currencies had left an enormous paper profit, more than R500 billion, sitting in an account with an unlovely name: the Gold and Foreign Exchange Contingency Reserve Account, or GFECRA. In 2024 the government and the Reserve Bank agreed to release R150 billion of that profit to the Treasury over three years to help bring down national debt. To pay the money across, the Bank sells none of its gold and none of its foreign currency. It creates R150 billion in fresh reserves, hands them over, and the Treasury uses the cash to retire maturing bonds. Once the transaction settles, commercial banks hold R150 billion less in government bonds and R150 billion more in newly created reserves at the central bank. Swapping government debt for new central bank money in that way produces the same balance-sheet result as a formal QE programme.

It carries a quiet bonus too. Central bank reserves are not counted as government debt under the usual rules, so moving the obligation from the Treasury’s books to the Reserve Bank’s books lowers the official debt-to-GDP ratio even though no taxpayer has repaid anything.

Add the two together and you get R38.8 billion in 2020 and R150 billion in 2024, close to R189 billion of new central bank money created to help carry the state’s debt, none of it ever described as printing.

I will not pretend this is a free lunch, because it is not. The Reserve Bank has to pay interest on all those new reserves to stop the extra money feeding inflation, and that costs it billions of Rand a year, so the government’s genuine saving ends up modest. For a saver, though, the accounting is beside the point. What counts is that new Rand can be summoned into existence to serve the state’s balance sheet, legally and quietly, under any word except the accurate one.

This is the point where a lot of Bitcoin commentary loses the plot, so let me give the Reserve Bank its due. By international standards it is a disciplined institution. The 2020 operation came to about 0.6% of GDP, a rounding error beside the Fed’s trillions. When a market freezes and lending stops, a central bank willing to step in as the buyer of last resort is what stands between a country and a 1930s-style collapse.

The Bank has also just done something most of its peers avoid. In November 2025 it lowered its inflation target, moving from the old band of 3% to 6% down to a firm 3%, and it did so explicitly to defend the purchasing power of ordinary people. Inflation averaged 3.2% in 2025. Only this week it held the repo rate at 7%, wrong-footing economists who had expected a hike, preferring to wait and watch rather than tighten hard, even as the Rand slipped to around R16.80 on the decision. Judged on its own terms, the Bank is good at its job.

All of that is true, and it still leaves a problem. A competent, well-run, inflation-targeting central bank is still committed to reducing the value of your money on purpose, only gently enough that nobody takes to the streets over it. A 3% target does not promise to protect your savings. It plans to shrink them by roughly 3% a year, indefinitely, and treats hitting that number as a job well done. It's doing well to keep an inherited system afloat.

But here's the issue. The lived figures are heavier than the target implies. South African consumer prices climbed 65% between 2010 and 2020. Governor Kganyago has put it in terms anyone can feel, noting that something costing R60 in 2015 runs to about R100 now.

Broad money, meanwhile, keeps expanding at around 6 to 7% a year while the real economy manages an average of about 0.7%, which means the supply of Rand grows several times faster than the goods available to buy with it. That gap is why so many people get an increase and still feel as though they are treading water. They are not imagining it. The number on the payslip rose while each Rand quietly bought a little less.

The idea that explains who wins and who loses here is about three hundred years old. It comes from Richard Cantillon, an Irish-French banker, and it runs like this: new money does not reach everyone at once, and whoever touches it first comes out ahead.

In local terms, new money does not turn up at Checkers first. It turns up in the financial markets. Fresh liquidity pushes up the price of shares, government bonds and property well before it reaches the shop floor, which rewards the people and institutions that already own those things. Government gets to roll its debt over more cheaply. Anyone standing near the tap does well, because they spend the new money before the price rises catch up with it.

By the time the same money reaches the person earning a wage or drawing a pension, the shelves have already been repriced. They receive Rand that buys less than it did a year earlier. Economists call this a transfer of wealth, and it moves steadily in one direction, away from people holding their savings in cash and toward people holding assets or sitting first in the queue.

The person on a fixed income has the least protection of anyone. A pensioner, or a worker whose pay does not move, can watch their money lose ground every year with no real way to escape it, while the wealthier household simply buys more property or shares and rides the wave upward. The costs these households cannot dodge, electricity and water and municipal rates, have been climbing faster than inflation itself. So the printer does more than create money. It reshuffles it upward, from the people with the least toward the people with the most.

There is good reason to expect more of this rather than less. Government debt sits near 79% of GDP, and even that figure is softened by the sort of accounting that parks obligations on the central bank’s balance sheet. Interest on the debt already eats close to 22 cents of every Rand the government collects. A debt load that size creates a standing temptation, because letting inflation quietly erode what you owe is always easier than cutting spending or raising taxes to pay it back in full. The saver sits on the losing side of that arrangement.

Which leaves the ordinary saver in an awkward spot. Holding cash guarantees a slow loss, by design, and yet cash is the option everyone calls safe while treating anything else as reckless. The labels have been quietly swapped around.

The useful question is not how to beat the market. It is whether any money exists that cannot be diluted at all, a money whose supply no central bank, finance minister or committee can vote to increase, and no accounting manoeuvre can quietly enlarge, however tempting that becomes in a crisis.

Bitcoin was built to be exactly that. The contrast with every currency we have been discussing is the whole point:

One is built to be diluted. The other is built so that it cannot be. That is the choice in front of every saver.

Bitcoin is volatile over short periods, and anyone who tells you otherwise is selling something. In fairness, the Rand has had its good moments too. It rallied about 14% against the dollar through 2025, its best year since 2009, and it can turn sharply the other way in a single week, as this week’s slide shows. Currencies wander around in the short run.

Short-run volatility and long-run debasement are separate questions, though, and it helps not to confuse the two. One is a rough road. The other only ever runs downhill, and it is the road every major currency has travelled since 2008 and the Rand for a good deal longer. Over the past decade South Africans’ incomes have fallen from 26% of American levels to 13%, and R60 has quietly become R100. Opting out of that slow decline is what Bitcoin offers a saver. Not a promise of getting rich by Friday, but a form of money nobody can create more of while you sleep.

None of this asks you to act today. It asks you to understand what is actually happening to the money in your account, here and everywhere, because the whole arrangement leans rather heavily on your not noticing.

If this raised more questions than it answered, that is the right response. Comment here (or reply via email); I read every response, and the sharpest questions tend to shape the next newsletter.

And if you would like to understand how to hold Bitcoin properly and compliantly as a South African, as a long-term store of value rather than a bet, you can book a call with me at www.simplb.com/meet.

Don’t just earn Rand or your FIAT of choice. Understand what is being done to it. And study the exit.

James Caw

Founder and Bitcoin Strategist | SimplB www.simplb.com

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SimplB (Pty) Ltd is a Juristic Representative and James Caw is a supervised Representative of CAEP Asset Managers (Pty) Ltd FSP No: 33933 - an Authorised Financial Services Provider. Nothing in this newsletter should be construed as financial advice. Before taking any action speak to your financial advisor.