Several growing economies across Africa have the potential to become key hubs for digital assets. However, as regulations become more evident, the cost of compliance for crypto exchanges is rising, says Ben Caselin, chief marketing officer of Johannesburg-based crypto exchange VALR.
Caselin believes that many African emerging economies are well-positioned to embrace digital assets. South Africa has become the first African country to license crypto exchanges officially. In 2021, the government began exploring separate regulations for cryptocurrencies, hoping to finalize them by 2022.
According to Caselin, after years of discussions and close collaboration with the regulator and local industry players, the Financial Sector Conduct Authority (FSCA) has now introduced its regulatory framework for Crypto Asset Service Providers; therefore, it includes on-site inspections to ensure compliance standards.
AgriDex adopts Solana for ultra-low payment fees
Caselin states that the regulatory framework will continue to develop in the coming years, focusing more on defining capital controls and crypto assets. Additionally, he emphasized the importance of getting explicit guidelines on these aspects. In July, Solana-based marketplace AgriDex enabled a cross-border agricultural trade between a producer in South Africa and an importer in London.
The deal involved the importer purchasing over 200 bottles of extra virgin olive oil and multiple cases of wine from South African farms and vineyards. Consequently, AgriDex now allows payments through the Solana blockchain, with a low transaction fee of just 0.15% for buyers and sellers, significantly less than traditional payment systems charge.
In April, South Africa’s Financial Sector Conduct Authority (FSCA) granted VALR new crypto asset service provider licenses. Specifically, the exchange, backed by $55 million in equity funding from investors like Pantera Capital and Coinbase Ventures, secured Category I and II CASP licenses from the FSCA.
As reported by Statista, the South African cryptocurrency market will generate $246 million in revenue by 2024., with an annual growth rate of 7.86%, potentially reaching $332.9 million by 2028. On Mar. 12, the Financial Sector Conduct Authority (FSCA) of South Africa approved licenses for 59 cryptocurrency platforms. Meanwhile, 262 more applications, out of 355, are still under review.
Related | Ethereum hits 40-month low amid outflows
