Lazy regulations, lack of clarifications and rising crypto crimes hamper adoption in South Africa
Stakeholders from the South African crypto community are dissatisfied with the country’s regulators being unable to provide clarity on guidelines regarding its domestic digital asset industry.
Local crypto firms, which are crucial in the functioning of the country’s crypto-economy, are now threatening to move abroad. Cryptocurrency has grown tremendously in Africa with digital currency being the preferred mode for sending back foreign remittances. However, the lack of regulatory initiative has hampered the process.
Sean Sanders, the CEO of local crypto investment platform Revix spoke to Bloomberg about his firm’s plans to relocate their head office to the United Kingdom. He said that the South African government was “incredibly slow” in clarifying regulatory guidelines for the crypto industry. The CEO further spoke about how customers arrive with skepticism towards the platform in an unregulated environment.
“South Africa seems to go in the opposite direction of some of the more developed market pioneers and innovators in this space. For regulators to apply hundred-year-old securities regulations to the novel cryptocurrency asset class seems lazy,” he said. Revix is also looking forward to launching another office in Germany.
Another issue is the country’s financial institutions not being willing to provide banking services to them, numerous crypto firms reported. Marius Reitz, the African general manager of global crypto exchange Luno warned authorities that the apparent banking embargo will hamper crypto adoption in the country.
“This makes it very difficult for customers to buy Bitcoin with their local fiat currency,” he said.
Cryptocurrency adoption in South Africa has also been stifled by the recent domination of scammers who have used misinformation about cryptocurrency to lure in their victims. In December, reports regarding an alleged Ponzi scheme emerged. The firm had worked with more than 260,000 memberships worldwide and handled about 23,000 Bitcoin.
South Africa’s Financial Sector Conduct Authority reported earlier this year that the number of crypto scams was on a rise amid the market’s bull run.
A communique by the FSCA said, “Do not be pressured to go with the flow and do not be afraid of being left out of the next big thing.”