Could Crypto Gain Favor in the Upcoming South Africa Elections?
By Ruholamin Haqshanas
Updated: April 29, 2024 07:17 EDT
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Reading Time: 2 minutes
Members of the crypto community believe that the upcoming elections in South Africa will not hinder the country’s progress in the digital asset space.
South Africa has recently implemented a licensing regime for cryptocurrencies through the Financial Sector Conduct Authority (FSCA), positioning itself as a leading African nation in this field.
As part of this regime, the FSCA is set to grant 60 licenses to crypto firms in the coming weeks, with Luno, Zignaly, and VALR already receiving licenses.
South Africa’s Efforts in Crypto Regulation
In 2022, South Africa expanded the scope of its Financial Advisory and Intermediary Services Act to include crypto providers, enabling the regulation of digital assets as financial products.
“This demonstrates a forward-thinking approach to regulating the crypto space, aligning with global trends and recognizing the growing importance of blockchain technology in modern finance,” said Maurice Crespi, a partner at Schindlers Attorneys, a South African law firm.
On May 29, South Africa will hold its presidential elections. While the African National Congress (ANC) has held a dominant position for the past 30 years, its majority is now being challenged.
As a result, the ANC may need to form a coalition, potentially involving the opposition party, the Democratic Alliance, and the far-left Economic Freedom Fighters party.
However, Mpumelelo Ndamane, CEO of South Africa-based crypto wallet provider Nuud Money, believes that the country’s crypto policies will not be affected by political dynamics.
Exploring Stablecoin Use Cases in South Africa
South Africa’s National Treasury has recently announced that its Intergovernmental Fintech Working Group will explore use cases for stablecoins and consider policy and regulatory responses throughout the year.
The group will also examine the impact of tokenization on domestic markets and plans to publish a discussion paper outlining the regulatory implications of tokenization and blockchain-based financial market infrastructure by December.
Tokenization refers to the representation of real-world assets on a blockchain.
John McCarthy, the General Counsel for Global Regulatory Affairs at Fireblocks, shared his thoughts on South Africa’s approach.
A survey conducted in 2017 revealed that 47% of South Africans had either invested in cryptocurrencies or expressed an interest in doing so. In the same year, Bitcoin wallet downloads in the country increased by 100%.
In 2020, crypto exchange Luno reported that South Africa had the third-highest level of crypto ownership worldwide, reaching 13%.
As crypto adoption continues to grow, South African companies are actively embracing cryptocurrencies. Stitch, a South African payments infrastructure firm, introduced “Pay with Crypto” last year, allowing customers to use cryptocurrencies for purchases.
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