The State of Cryptocurrencies in South Africa

By BrynnB | The Modern Crypto Man | 3 Sep 2020


Mention the word “Bitcoin” to a South African, and you’ll receive one of two replies – either a look of confusion, or a skeptical glare that reveals a distrust and wary. If you’re lucky, you’ll find someone who actually understands the technology and has formulated an opinion on cryptocurrencies. This is, at least, in my experience. It seems the advent of new technologies are not so quickly adopted within my home country, and it’s rather disappointing because the possibilities are so vast – especially for an impoverished, struggling nation like SA. The blockchain brings with it qualities that are rarely found in SA, namely immutability and trust. With fiscal corruption levels at an all-time high, it’s easy to see the value blockchain and crypto brings. Yet why does it take so long to “cross the sea” and reach us? I have a few potential theories.

Let’s get this straight – I’m not saying South Africa is completely blind to cryptocurrencies. Quite the contrary. South Africa is actually one of the leaders in African cryptocurrency adoption! Yet the fact remains - we see many headlines regarding the topic, but very few of them positive. This is likely what places the doubt and skepticism in most South Africans: media representation. There is a tragic history of scams and Ponzi schemes based around bitcoin in our country, and these are often the only “projects” (for lack of a better word) that make it into the news. With very few developers or businesses based around bringing blockchain technology to the country, the average citizen is only exposed to the negatives.

Those who are fighting the good fight are generally limited to exchanges – websites like Ice3X (SA’s biggest exchange) and Easy Crypto (an online crypto retailer/trader). These don’t garner attention in the public eye, and can only be found if one enters the cryptocurrency space and actively seeks them out. Our biggest proponent for crypto in SA is undoubtedly the mobile wallet, Luno (use my code QERE4T for R25 free BTC!). They have brought crypto and the bitcoin experience to the average person. Of course, KYC is required to sell/transfer your crypto, so it’s not pseudonymous like other crypto wallets or DEX’s (decentralised exchanges), however it serves as a great route for the average guy or gal to invest just a few dollars (Rands in our case) into BTC and watch the price fluctuate. As more and more developers see the value and applicability of blockchain tech in South Africa, I don’t doubt that the technology will spread and slowly remedy the public opinion. This won't, however, be an overnight occurrence.

We can’t talk about Luno without mentioning the scams that have followed in SA. Due to the ease of use that Luno brings, Ponzi schemes encourage potential “investors” to use it to buy crypto easily, and then send it to them. There have been numerous scams spearheaded by South Africans, and they have all ended in relative chaos. Millions of dollars missing, false identity fraud, offshore accounts, you name it. The promise of false returns (10-14% monthly, consistently) is too hard to deny for some eager investors, and it is clear that due to the “unregulated” nature of bitcoin, these Ponzi’s are able to convince the average investor that they are legit. Crypto trading and markets are difficult to understand even with hours of research put in every day. This new and unknown technology is then used against the poor souls – ending in tears and lost funds. It is incredibly unfortunate to see, but even now, there is a “trading platform” that has garnered billions (yes, with a “b”) of Rands in investment money. The legitimacy of this platform cannot be confirmed nor denied, but an old saying rings true when looking at evidence found online: “If it looks like shit, smells like shit and tastes like shit, well then, it must be…”

(I have omitted any names out of respect for those involved and to not make any false/defaming claims – if you’d like to know more, Google “South African bitcoin scam”)

With the prevalence of such scams, one must ask – where is the government in all of this? It appears that they are working on drafting new tax laws for cryptocurrency trading and to regulate exchanges, however that’s about as far as it goes (for more info on these regulations, see the article below). It’s kind of like the wild west in a way. The FSCA (Financial Sector Conduct Authority) have battled with scams in the past, but were not able to claim victory over these scammers and the lost funds. At present, the extent they go to is to issue public warnings, but the buck stops there. A lot has to happen in order for our special investigation units to get involved, and only then will things happen. It is unfortunate that the average bitcoin investor is not very well protected, but it is also a blessing to have such freedom when it comes to owning and transferring digital assets, especially considering other countries stances on the matter (see article below)

The future no doubt looks bright for the blockchain and cryptocurrencies in South Africa. As the technology finds its footing amidst young developers, many new and radical ideas will come to fruition – hopefully garnering media attention and spreading positive news regarding the technology. Millennials and Gen Z’s are realizing the potential this tech could have for a country plagued by corruption, crime and deception, as well as the great earning potential that can come with the platforms associated (see my last post here on how to make free crypto in 2020). With cryptocurrency’s immutable nature and secure storage ability, fraud and theft become very difficult. Just recently, a massive banking hack took place that personally affected me. This served to only further entrench my desire to aid in bringing blockchain and cryptocurrencies to the masses – in whatever small way I can!

If you enjoyed this article, please follow me for more regular crypto content. If you are wanting to become a blockchain developer, follow my Blockchain Dev blog! Thanks for all the support 🧡

 

Please remember that all information mentioned above is based upon my personal opinion and experience as an individual. This article is written purely for & from perspective.

BTC Donations are always welcome: 3GKBrNq4QotoC2qT2xUZ4bwD2LGBk7atMM

How do you rate this article?


1

0

BrynnB
BrynnB

Young entrepreneur from South Africa, looking to become a blockchain developer.


The Modern Crypto Man
The Modern Crypto Man

Here we will discuss all things crypto! Price predictions, coin reviews, exchange listings and so much more!

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.