What to expect from cryptocurrency in 2022— including new regulations in South Africa
The cryptocurrency market had a turbulent year in 2021 and financial markets, in general, had a rough start in 2022, but exchange and wallet provider Luno believes the crypto market will keep its upward trajectory in the long term.
While Luno expects ongoing volatility in the market, it also anticipates the implementation of a South African cryptocurrency regulatory regime by the end of the year.
“Globally, we have seen moves to regulate crypto, and we anticipate the introduction of a clear South African regulatory regime likely by the end of 2022,” Luno’s GM for Africa, Marius Reitz, said.
“Regulatory certainty will have a host of positive spin-offs for the crypto sector.”
The Intergovernmental Fintech Working Group (IFWG) initially stated its intentions to bring cryptocurrencies into the South African regulatory purview in July 2021.
The IFWG’s Crypto Assets Regulatory Working Group recommended that a licensing framework be introduced for crypto asset service providers (CASPs).
It also recommended that FICA be applied to the crypto-asset industry and exchange control regulations be expanded to allow cross-border transactions facilitated by CASPs.
Marius Reitz, Luno GM for Africa
Revix founder and CEO Sean Sanders told MyBroadband that the cryptocurrency market in South Africa appears to be maturing.
“The fundamentals are improving. We’re seeing crypto adoption for payments accelerate, we’re seeing more and more regulatory bodies warm up to cryptocurrency as a legitimate asset class, and we’re seeing strong institutional interest to allocate funds to crypto,” he said.
“This all points to the crypto market maturing, and with more Web 3.0 and DeFi innovation occurring than ever before, we’re bullish on the crypto market as a whole.”
Major growth in South Africa
Sanders explained that transactions on Revix’s platform have only increased since 2019 and that in 2021, transactions averaged over $15 million (R228 million) each month.
“We had around $10 million transacted in 2019, we tripled that in 2020 and nearly quintupled 2020 in 2021 with more than $15m transacted every month,” he said.
“There has been a lot of growth across the board — both in transaction volumes and user numbers — with the majority of our customers choosing to invest in our unique crypto bundles which provide easy diversified exposure to the crypto market.”
Sean Sanders, Revix founder
Luno also saw significant growth and reached a milestone in 2021, with the platform’s customer base growing to 9 million.
“As we hit the 9 million customer mark, it is a fitting symbol that Luno’s logo now adorns an iconic building in Cape Town’s unofficial financial district on the foreshore,” Reitz said.
“Staff numbers have swelled to over 600 across the UK, South Africa, Malaysia, Indonesia, Nigeria, Australia and Singapore, and we are actively hiring over 60 specialists.”
Reitz explained that it took five years for Luno to get its first one million customers in 2017.
“Luno’s growth has accelerated significantly since then. In the last year alone, we have added over 3.6 million new customers,” he said.
Regarding specific cryptocurrencies, 67% of new Luno customers invested in Bitcoin, 43% bought Ripple, and 20% bought Ethereum.
According to Reitz, the first deposit made by new customers averaged $37 (R563).
Luno’s global head of payments, Louis van Staden, said he expects to see more central bank digital currencies (CBDCs) launched in 2022.
“Nigeria has launched the e-Naira, and South Africa is investigating a digital currency. CBDCs are significant because they represent a meeting point between how the technology can be leveraged and [be] a comfortable space for regulators,” he said.
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