KEY FACT: South African government makes plans to promote digital payments, with a focus on stablecoins and blockchain technology to improve the lives and livelihoods of marginalized groups. The government is set to amend policies to reflect the resolve as well as collaborate with Switzerland and FinMark Trust to launch digital payment pilot projects.
South Africa’s National Treasury has reviewed its 2024 budget which OUTLINED the need for enhancing public finance management towards “improving the lives and livelihoods of marginalized groups". As part of the budget review, the South African Treasury has stated its plans to promote the adoption of digital payments which cover stablecoins and blockchain.
Moreover, the South African government is set to amend policies to include stablecoins as crypto assets and explore the impact of blockchain on financial markets and the sector as a whole, with regulatory updates expected by December 2024. The report read thus:
“In 2024, the Intergovernmental Fintech Working Group will publish additions to include “stablecoins” as a particular type of crypto asset.”
The working group published a crypto regulation paper in June 2021, which will be amended to include stablecoins into the crypto asset class in addition to finalizing a diagnostic of the domestic stablecoin landscape. source
The Treasury's statement regarding policy change on crypto assets, specifically for stablecoins is as follows:
“It will conduct analytical work to understand the applicable use cases of stablecoins and to recommend an appropriate policy and regulatory response.”
Additionally, the Financial Intelligence Centre (FIC) Act could be amended to require all institutions to report crypto transactions over 49,999 South African rand ($2,650). South Africa will also study the impact of blockchain-based tokenization on domestic financial markets. source
To achieve the above, a collaboration with Switzerland and FinMark Trust has been brokered for the launch of four (4) digital payment pilot projects aimed at enhancing digitalization and supporting small and informal businesses. This is a timely move aimed at enhancing a comprehensive diagnostic of the domestic stablecoin landscape and a policy framework designed to harness their potential for financial inclusion. There are also hopes that this policy review would help solve the unemployment issues in the country.
This development is coming to South Africa when a counterpart African nation, Nigeria is clamping down on cryptocurrency exchanges, fingering it as the source of the Naira's loss of value.
Do you think this decision by the South African Treasury will boost crypto adoption in South Africa and boost its economy?
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