4 Reasons Why Bitcoin Is So Popular in South Africa

(1) INTERNAL AND EXTERNAL REMITTANCE

South Africa’s remittance market continues to grow, triggered by both rural to urban migration and the influx of migrant workers from neighboring nations.

According to , the country’s remittance market is expected to reach R34 billion ($2.3 billion) by 2023.

Bitcoin offers a cheaper alternative for sending money to relatives in rural South Africa or in neighboring countries.

Commenting on the role of bitcoin and crypto payments in the country’s remittance arena, Marius Reitz, general manager for Africa at crypto exchange platform Luno, opined:

There are large remittance flows from South Africa to other countries in the SADC region, of which a portion is informal due largely to the high costs and complexity involved. It is vital that we reduce the cost and complexity associated with moving money seamlessly across the continent.

(2) HIGH FINTECH LITERACY

South Africa remains the sole fintech hub in Africa. Data from the United Nations Economic Commission for Africa (UNECA) shows that South Africa accounts for 31.2% of the fintech startups on the Continent.

This relatively high fintech literacy also extends to mobile money adoption. Bitcoin in many ways constitutes an extension of a payment system already familiar and in popular use by the South African public.

South Africa also presents a departure from the norm in Sub-Saharan Africa as far as the unbanked population is concerned. While more than half the population in Sub-Saharan Africa is unbanked, more than 80% of South Africa is banked.

This degree of banking and mobile money penetration has made it easy for South Africans to purchase bitcoin from platforms like Luno.

(3) VOLATILE RAND

According to , the South African rand — the country’s fiat currency, was the most volatile among the “major currencies.” Like in other countries experiencing such volatility, bitcoin presents a viable alternative.

According to Reitz, daily bitcoin trading in South Africa averages R90 million ($6 million). Data from  shows an average of R15 million ($1 million) traded via P2P platform Localbitcoins for the month of October 2019.

(4) ABSENCE OF STRINGENT REGULATIONS

Finally, South Africa is yet to enact strict cryptocurrency laws that might dampen enthusiasm for bitcoin. Apart from tax regulations and AML/KYC compliance, the country’s crypto space isn’t highly regulated.

However, as reported by , there are plans by authorities in the country to begin robust crypto tracking modalities.

Original article seen on Bitcoinist (Osato Avan-Nomayo)