Cryptocurrency14.10.2024

Crypto taking off in South Africa

Crypto is taking off in South Africa, with exchanges expanding their payment networks to thousands of merchants and the taxman cracking down on those who own digital assets and currencies.

While sub-Saharan Africa has been the world’s slowest cryptocurrency adopter, South Africa claimed the 30th spot on Chainanalysis’ Global Adoption Index, behind Ethiopia (26) and Kenya (28).

MoneyBadger, on the other hand, lists South Africa as having the 14th highest crypto users per capita in the world, ahead of Switzerland and Germany.

South Africa’s Financial Sector Conduct Authority (FSCA) declared crypto assets “a digital representation of value” and a financial product on 19 October 2022.

At the same time, it announced that it would begin accepting applications for crypto asset service provider (CASP) licences.

It also established an investigation team to specifically deal with anyone conducting crypto financial services unlawfully.

This includes those who didn’t apply for a licence or whose licence applications were declined and have continued to trade regardless.

The South African Revenue Service (Sars) has also been steadily increasing scrutiny in crypto assets.

Last week it issued a statement encouraging all owners of digital assets to declare them as part of its Voluntary Disclosure Programme (VDP) to facilitate compliance.

It cited the phenomenal growth in cryptocurrency usage for this intervention.

“Sars is also working assiduously to make it easy and simple for taxpayers and traders to seamlessly comply with their obligations,” said Sars commissioner Edward Kieswetter.

A few days before this announcement, Luno, a cryptocurrency exchange, unveiled a partnership with Zapper.

This partnership allows the exchange’s customers to transact with 31,000 merchants in Zapper’s payment network across South Africa using the LunoPay platform.

Luno business development manager Tarris Arnold believes that providing this type of accessibility helps unlock the intended benefits of cryptocurrencies.

“The ability to pay at such a wide variety of merchants using crypto is a giant step closer to the original vision of using crypto to pay for goods and services.”

VALR, another prominent crypto exchange headquartered in Johannesburg, has also recently made progress in allowing its customers to make crypto payments.

Its users now have the option to pay using one of eleven cryptocurrencies on the online shopping platform Geewiz.

While these developments may be recent, trailblazers such as MoneyBadger and Bitcoin Ekasi have been hard at work over the past few years, attempting to make crypto payments more accessible to South Africans.

For example, MoneyBadger, then known as CryptoConvert, partnered with Pick n Pay to make it possible to buy groceries with Bitcoin at the retailer’s stores nationwide.

The technology uses quick response (QR) codes to initiate the payment and the Bitcoin Lightning Network to process it.

MoneyBadger currently allows South Africans to use crypto to transact at over 1,000 Pick n Pay stores.

After the initial launch, MoneyBadger expanded its offering to integrate with wallets from various crypto exchanges.

Customers can use their Binance, Luno, VALR, or any other Lightning-enabled Bitcoin Wallet.

The Ekasi Bitcoin project, based on the Bitcoin Beach project in El Salvador, offers a different perspective on using cryptocurrency.

Based in Mossel Bay, the project is an extension of The Surfer Kids Non-Profit and focuses on creating a Bitcoin-orientated circular economy within the community.

The Surfer Kids programme employs surfing coaches from the township community it services and pays their salaries in Bitcoin.

Bitcoin Ekasi also encourages township vendors to accept Bitcoin as payment, allowing the coaches to spend the cryptocurrency in the township.

Like MoneyBadger, this also uses the Lightning Network.

The project is 100% donation-based and works to create youth empowerment in the impoverished South African township.

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