South Africa is Pushing for Digital Payments and Crypto Regulation

South Africa’s 2024 budget review highlights a strategic focus on advancing digital payments and reforming public financial management. Among the initiatives, the Treasury plans to integrate stablecoins into the crypto asset class, aiming to enhance the financial landscape for marginalized groups.

South Africa Embracing Stablecoins: Policy Changes Ahead

The Intergovernmental Fintech Working Group aims to include stablecoins as a specific category within crypto assets. This move comes as part of an ongoing effort to update regulations and foster innovation in the digital payment space. The working group, building on its 2021 crypto regulation paper, will delve into the landscape of domestic stablecoins, analyzing their use cases and proposing suitable regulatory measures.

As part of the regulatory overhaul, amendments to the Financial Intelligence Centre (FIC) Act are on the horizon. These amendments may mandate reporting on crypto transactions exceeding 49,999 South African rand ($2,650). Additionally, the government plans to assess the impact of blockchain-based tokenization on domestic financial markets, with a report expected by December 2024.

Pilot Projects and Collaboration

In collaboration with Switzerland’s State Secretariat for Economic Affairs and FinMark Trust, South Africa will embark on a three-year program focusing on digital payments. The initiative aims to conduct four pilot projects, covering community digitalization, digitizing payments for informal and low-income workers, cross-border remittances, and facilitating cross-border trade. The goal is to drive innovation in payments and support small businesses through enhanced financial infrastructure.

South Africa’s strides in digital disruption echo success stories from East Africa. Blockchain technology has empowered remote populations, as demonstrated by a recent partnership between AgTech firm Dimitra and One Million Avocados (OMA). This collaboration aims to leverage blockchain and other emerging technologies to help Kenyan avocado farmers improve production and quality, unlocking access to global markets.