South Africans do things differently, and that’s not a bad thing. And when it comes to cryptocurrency, local is definitely lekker.
Crypto has boomed in South Africa in recent years. OVEX — Africa’s largest cryptocurrency exchange platform — is a testament to that, trading in excess of R4-billion/month. OVEX’s growth mirrors crypto’s growth in South Africa. The South African company was started in 2018 and just three years later is valued at US$122-million.
This is attributable to both the fact that crypto is hot news and an even hotter investment in South Africa right now, and also to OVEX’s entirely unique approach to bringing cryptocurrency to all people of South Africa.
The fact that the cryptocurrency market is booming in South Africa is abundantly clear: Between July 2020 and June 2021, the market grew by 1 200%, according to a report by Chainalysis. That translates to a stunning $105.6-billion. Daily crypto trading in South Africa was reported as being higher than $145-million in January 2021.
One theory as to why cryptocurrency is so popular in Africa is due to the high number of bankless people on the continent. Unlike many Western nations, people in Africa are more accustomed to “mobile money”.
The other reason is the general weakness in fiat currencies in Africa such as the Nigerian naira and now, the South African rand, which has weakened to R15.84/$. Cryptocurrency gives South Africans easier access to digital assets, which, although sometimes volatile, have far more clout than the rand.
But not all cryptocurrencies are volatile. Whereas bitcoin is renowned for its instability, an entirely new class of cryptocurrencies has hit the market called stablecoins. Stablecoins are cryptocurrencies that are backed by some other, more stable asset, such as silver or, quite commonly, the US dollar.
TrueUSD (TUSD) is one such stablecoin, with a current market cap of over $1.2-billion, all of it backed 100% by hard cash in dollars. The price of TUSD fluctuates only when the dollar fluctuates, making it a stable investment.
The benefit to South Africans is that getting their hands on US dollars might be a little complicated, requiring red tape and complications by going through traditional banks. But buying TUSD is as simple as typing in how much rand someone is willing to exchange into OVEX’s RFQ (Request for Quote) tool, and then knowing however much TUSD you can get for that rand. You can then click “buy now” and, voila, you own cryptocurrency.
We wanted to open up cryptocurrency trading to everyone in South Africa
For more experienced investors, OVEX offers a white-glove, over-the-counter (OTC) cryptocurrency service where trades are conducted off the open books, and spreads are extremely tight.
“We wanted to open up cryptocurrency trading to everyone in South Africa,” said OVEX CEO Jonathan Ovadia. And OVEX did precisely that, going so far as to create an extremely high interest-earning savings account, OTC desk and Buy & Sell feature — tools that even the most amateur investor can understand.
Cryptocurrency is indeed booming in South Africa, and the OVEX is part of the reason why.
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