Cryptocurrency is revolutionising the payment and investment industry. Best described as a digital or virtual currency, cryptocurrency is unlike fiat currencies in that it only exists on computers, is transferred between peers (there is no middleman like a bank) and transactions are recorded on a digital public ledger called a “blockchain”. The process is decentralised, meaning it is controlled by users and computer algorithms and not a central government. The price per cryptocurrency is determined by the amount that people are willing to pay for it. There are more than 1 600 cryptos in the world and the number is growing.
While governments globally are looking at how best to incorporate and regulate cryptocurrencies in their payment systems, some retailers are already accepting them. Bitcoins can, for example, be used to pay for flights and hotels through specialist travel websites. Allowing purchases with bitcoin eases cross-border transactions, and also gives retailers access to broader markets. There is criticism that cryptocurrencies’ bubble will burst but investors seem unfazed. Investment banks, listed companies, technology companies and the general public are wading in on the cryptocurrency prospects.
GAINING TRACTION IN SA
South Africa, like many other countries, has seen a number of new entrants in the cryptocurrency market in recent months. Their interests range from launching their own virtual currencies, cryptocurrency trading, and also the technology such as blockchain, which facilitates transactions. So far in South Africa, the main focus has centred on trading platforms that allow investors to buy and trade cryptocurrencies.
LUNO: Owned by Naspers, it leads the pack, establishing a cryptocurrency exchange operating in over 40 countries. The platform allows South Africans to buy bitcoin and ethereum using the rand. luno.com
SYGNIACOIN JSE: listed asset management company Sygnia intends to launch a cryptocurrency exchange to provide South Africans with the option to buy virtual currencies using the rand. sygnia.co.za
WALA: This Cape Town-based start-up has a platform aimed at being a cryptocurrency for the unbanked. getwala.com
BITFUND: It entered the market in June to offer a diversified cryptocurrencies investment platform, allowing potential investors the opportunity to invest in more than 20 of the largest cryptocurrencies. bitfund.co.za
The digital currency market in South Africa is still in its early stages, but the rise and adoption of the internet is likely to stimulate growth in this untapped sector. For more information on cryptocurrency in South Africa, go to bitcoinhub.co.za.
SAFCOIN and PROJECT UBU have launched cryptocurrencies, giving South Africans an opportunity to invest in virtual tokens. CENTBEE will be rolling out a platform for merchants to accept bitcoin payments and also for consumers to
make cross-border cryptocurrency transactions. centbee.com