South Africa is Exploring Stablecoins And Blockchain as Potential Solutions For Advancing Digital Payments
South Africa is currently exploring stablecoins and blockchain technology as potential solutions for advancing digital payments.
In the country’s 2024 budget review, it emphasized the imperative of structural reforms and enhancing public financial management.
Within this framework, the treasury unveiled intentions to advance digital payments, exploring stablecoins and blockchain to enhance the welfare of marginalized communities. Additionally, the budget highlighted forthcoming policy adjustments concerning crypto assets, with a specific focus on stablecoins.
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.
The report read:
“It will conduct analytical work to understand the applicable use cases of stablecoins and to recommend an appropriate policy and regulatory response.”
Furthermore, there are plans to potentially amend the Financial Intelligence Centre Act, mandating all institutions to report cryptocurrency transactions exceeding 49,999 South African rand ($2,650). South Africa also aims to conduct a comprehensive study on how blockchain-based tokenization could influence domestic financial markets.
The working group is expected to publish a paper by December 2024 outlining “the policy and regulatory implications of tokenization and blockchain-based financial market infrastructure.”
Notably, the South African government, in partnership with Switzerland’s State Secretariat for Economic Affairs and FinMark Trust, will embark on a three-year program aimed at implementing four digital payments pilot projects.
These projects encompass community digitalization, the digitization of payments for informal and low-income workers, facilitating cross-border remittances, and enhancing cross-border trade. The overarching goal of this initiative is to bolster small and informal businesses by fostering payment innovation.
