Cryptocurrencies such as Bitcoin are becoming increasingly popular in Africa, in part because mobile payments have long been a part of everyday life on the continent. Virtual money has many benefits for a young, tech-savvy population.
Africa is at the heart of the economic revolution: last year, the number of cryptocurrencies in and out of Africa increased by 55 percent to less than $10,000. According to the American analytical company Chainalysis, the peak was reached in June at the level of 316 million U.S. dollars.
Simply put, cryptocurrencies are virtual money that can be used as real money: for example, to make transfers to other people or to buy goods and services.
Africa has every opportunity to benefit from the cryptocurrency boom. The number of trained professionals and potential entrepreneurs is growing on the continent. Moreover, the high unemployment rate in many African countries is forcing young people to ignore traditional economic areas and to seek new ways of earning.
Story of South Africa
South Africa has been rated as the leading country for the ownership of crypto. This is according to an international survey conducted recently. The popularity of crypto is also visible in the Forex industry - another prominent and outstanding field in the financial industry where the number of South African forex brokers switching to crypto sharply rises. Cryptocurrency is a type of money that offers a wide variety of advantages to its owners, thus it is not a surprising fact why more and more people in South Africa are using it.
At the same time, the legal framework in the country is also convenient for people who are involved in trading.
Interest in Bitcoin in South Africa is the highest in the world, according to data recorded by Google. And it is connected with an active community of stakeholders in the country.
The blockchain technology on which bitcoin is built has already been tested on financial transactions in South Africa. In addition, the country's central bank said the technology helped reduce the percentage of costs earned from cash transactions.
In early 2014, the South African Reserve Bank (SARB) issued a notice on digital currencies stating that they did not have a "legal status or regulatory framework" and were not regulated by the authorities. However, in July 2017, the South African authorities, began to develop regulations to regulate the crypto market.
In June 2018, the Reserve Bank of South Africa (SARB) announced the successful testing of the Khokha payment blockchain system. However, despite the success of the project, the bank's management does not plan to replace the existing system of settlements.
Legal status
In South Africa, cryptocurrencies have not yet received legal status, but citizens are already obliged to pay taxes from them. The Federal Tax Office of South Africa (SARS) has issued a statement according to which, any transactions with cryptocurrency should be subject to income tax. However, this remains only on paper.
South Africans realize that the cryptocurrency market is important and that it can evolve in the same way as the entire financial system. In support of South Africa's interest in cryptocurrencies, Johannesburg has become the host city of one of the most important crypto-world events on the continent: the Blockchain-Africa conference. This conference has been held in South Africa every year since 2015.
Analysts note that in the last few years on the wave of political pressures on the platform significantly increased traders from South Africa. Statistics show a significant increase in interest in buying Bitcoin.
Reforms of President Cyril Ramaposa are unfolding against the background of already existing problems: the acute socio-political situation in the country, the high unemployment rate (25%), as well as the highest level of economic crime in the world (77%). However, cryptos are gradually developing and will have their say in the near future.
