Local crypto market evolves beyond Bitcoin, embraces altcoins and stablecoins
That ticker you see on the Business Maverick section homepage? It's the sign of a shifting tide in the local crypto market that may upset the traditional finance ships.
When Bitcoin decoupled from its 'volatile investment' paradigm during Donald Trump's tariff war, the price rally put off many would-be crypto investors. But it represents just one asset in a vast universe of digital currencies. According to Christo de Wit, cryptocurrency exchange Luno's country manager, Bitcoin functions primarily as 'digital gold' and a 'store of value', while altcoins occupy entirely different asset classes.
'There are around 20,000 other cryptocurrencies besides Bitcoin,' De Wit explains to Daily Maverick in an interview. 'Each has its own underlying foundation and blockchain technology.'
Altcoins span many categories, including artificial intelligence, gaming, layer-one protocols and layer-two scaling solutions. For potential investors, understanding an Altcoin's utility and underlying technology is crucial before committing funds.
'You need to understand what the asset or coin is used for and how its value has grown relative to fiat currencies or even Bitcoin,' says De Wit. 'The market can be very overwhelming, given its breadth and complexity.'
Luno sails the Altcoin seas
Luno – once the most conservative option to turn rands into Bitcoin – is turning its sails to the wind and significantly expanding its crypto offerings. Having started with just a handful of cryptocurrencies, the exchange now lists more than 31 different digital assets and continues to grow its selection.
'We need to grow with the industry,' says De Wit. 'As the crypto market matures, particularly with regulation being adopted globally and increased scrutiny, we've been able to expand our product at a much faster pace because we've laid that solid foundation.'
This expansion goes beyond simply adding new cryptocurrencies. Luno has launched additional products, including staking wallets, allowing users to earn rewards for holding certain cryptocurrencies.
New coins, new rules
One does not simply list a new currency. They undergo scrutiny through Luno's digital asset selection committee, which evaluates factors such as liquidity, security protocols and past security incidents. This is Luno's typically cautious approach to keep customer investments safe while expanding responsibly.
'We're pro-compliance and take a sensible approach to drive adoption through trust, safety and security,' says De Wit. 'Our mission is to upgrade the world to a better financial system by giving exposure to the crypto industry and blockchain technology to our user base, expanding their knowledge.'
Perhaps no cryptocurrency better exemplifies the unpredictable nature of the Altcoin market than Dogecoin. What began as a novelty token based on a meme has transformed into one of the cryptocurrency market's most recognised assets – with some credit to Elon Musk riding the meme 'to the moon'.
'Dogecoin started as a complete replica or fork of Bitcoin's code,' De Wit explains. 'Despite questions about its fundamental utility beyond uses like rewards and online trading, it has grown into such a big asset.'
Now ranking in the top 10 cryptocurrencies by market capitalisation, Dogecoin boasts 'a huge following'.
'This represents an evolution from Memecoin to fully fledged Altcoin,' says De Wit. 'Dogecoin is not going anywhere.'
What this means for you
Think crypto is just volatile Bitcoin? Think again. The market has exploded with thousands of 'altcoins' designed for specific uses (like gaming or AI) and 'stablecoins' pegged to currencies such as the US dollar.
While Bitcoin is seen as 'digital gold', altcoins offer different opportunities. But beware – understand what a coin does and its underlying tech before investing, as the market is complex and risky.
Stablecoins are shaking up cross-border payments, especially in Africa. They offer a way to potentially send or receive money internationally faster and with lower fees than traditional banks, reducing currency conversion losses.
The bigger picture: Crypto isn't just speculation any more. It's starting to offer practical solutions, particularly for payments, challenging traditional finance systems.
Stablecoins to tame the remittance tide
While volatile cryptocurrencies capture headlines, stablecoins – digital currencies pegged to stable assets such as the US dollar – are quietly revolutionising cross-border payments across Africa.
Luke Kyohere, chief product and innovation officer at Onafriq, points to USDC, a regulated and fully reserved stablecoin pegged to the dollar, as a prime example. 'Traditional money transfers are often characterised by high fees, slow settlement times and multiple currency conversions that erode value,' Kyohere explains. 'Stablecoins leverage the speed of blockchain technology while eliminating the volatility concerns of traditional cryptocurrencies.'
For businesses, Stablecoin integration reduces transaction settlement times from days to minutes by 'eliminating the need for multiple intermediaries, minimising FX slippage, and ensuring near-instant reconciliation'. This efficiency is particularly valuable in Africa, where liquidity constraints and currency volatility are common challenges.
Stablecoins now account for an impressive 43% of crypto transactions in Africa. Their adoption is driven by the high volume of intra- and inter-Africa cash movement between numerous smaller countries, and the need to hedge against inflation and currency risk.
While mobile money has 'transformed domestic flows significantly in Africa', stablecoins excel in cross-border transactions because they are 'already cross-border interoperable', unlike mobile money systems that are typically 'tied to borders and countries'.
Disrupting fintech
This rapid rise of stablecoins presents both challenges and opportunities for established financial technology companies, particularly those focused on cross-border remittances using traditional fiat methods.
Cornelius Coetzee, Verto country director, a company specialising in B2B cross-border payments with fiat currencies, acknowledges facing 'heat from the crypto community' because cryptocurrency 'specifically solves a lot of' the problems Verto's clients face, such as illiquidity and navigating complex exchange control regulations.
'Crypto came into existence because of exactly the problems that our clientele face,' he admitted in an interview with Daily Maverick at Converge Africa. 'We're feeling a hit from the Stablecoin community.' Coetzee believes that in the long run, stablecoins 'will form part of our ecosystem', suggesting they see stablecoins not purely as a threat but as a potential future component of their service.
However, Coetzee also believes that while startups and millennials are predominantly adopting stablecoins, 'larger corporates and more established businesses will still stick to fiat'.
This indicates that while stablecoins offer a compelling alternative, especially for newer or digitally native businesses, traditional fintechs serving larger enterprises still see strong demand for fiat-based solutions. Traditional finance isn't leaving anytime soon. DM
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Citizen
10 hours ago
- The Citizen
Weekly economic wrap: Bad news for oil prices, rand soldiers on
While the week was uneventful on the local economic front, the same cannot be said for the international picture for oil prices. As expected, the week brought bad news for oil, but thankfully not such bad news for the rand as Israel and Iran entered a full-blown war after Israel struck Iran's nuclear facilities last week. Closer to home, inflation remained the same in May, while retail sales showed a solid performance in April. Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research (BER), points out that so far none of the global superpowers has directly become involved in the Israel-Iran war, with US president Donald Trump saying that he will decide in the next two weeks what to do, although he already approved attack plans. 'In commodity markets, there is good news with a higher platinum price and bad news with a higher oil price for South Africa's trade dynamics. The platinum price jumped to a more than 10-year high this week, supported by demand from China, sustained investor interest and concerns about a deficit in the market, with demand outstripping supply. 'On a negative note, the oil price surged higher this week and is currently almost 20% above the price at the start of the month. Iran directly supplies about 3 million barrels of oil to the market per day, and this could technically easily be made up by a country like Saudi Arabia, which is still voluntarily cutting back production. 'However, the real concern is that freight in the Strait of Hormuz, which channels about 15% of the world's oil and 20% of liquid natural gas, is disrupted. Oil continues to flow, but prices to charter large oil tankers sailing through the strait have already more than doubled from last week.' ALSO READ: What Israel–Iran conflict means for South African economy Oil prices surge as Israel-Iran war heats up Bianca Botes, director at Citadel Global, agrees that the recent outbreak of war between Israel and Iran has significantly unsettled global energy markets, with profound implications for oil prices, the global economy, and Middle Eastern power dynamics. 'This escalation triggered immediate volatility in oil markets, with Brent Crude and West Texas Intermediate (WTI) prices surging by over 4% from the start of the conflict, seeing Brent reaching around $76/barrel and WTI surpassing $75/barrel. Since the start of the conflict, oil futures have risen approximately 10%, reflecting market anxiety over potential supply disruptions. 'Iran is OPECʼs third-largest oil producer, extracting about three million barrels per day. Despite sanctions limiting its exports, Iran remains a significant player, especially in supplying China and India. The conflict threatens Iranian oil production and shipping routes, notably the Strait of Hormuz.' Botes points out that analysts warn that oil prices could spike to $100 per barrel or even $120 per barrel if supply through the Strait of Hormuz is disrupted. 'Such a price shock would reverberate through global markets, impacting inflation, consumer costs, and economic growth worldwide. 'Brent Crude Oil futures fell below $73/barrel, but are still set for a third consecutive weekly gain. Fears of supply disruptions due to the ongoing conflict supported prices, even as Iran continues to export crude at high levels. A sharp drop in US crude inventories earlier in the week also helped keep oil prices elevated.' She says gold prices dropped below $3 360/ounce, nearing a one-week low and heading for their first weekly decline in three weeks. 'Investors have been selling gold to cover losses in other markets, and the prospect of no or gradual interest rate cuts limited gold's appeal.' ALSO READ: Israel vs Iran: Why you may soon have to pay more for petrol in South Africa The rand soldiers on De Schepper says the rand exchange rate held up well during the week, but depreciated slightly against a stronger dollar on Thursday and closed the week weaker against the dollar, euro, and pound. Botes notes that the rand is bouncing between R17.90/$ and R18.10/$, showing a slight weakening trend since its recent rally. 'The rand's performance was largely influenced by global risk sentiment and fluctuations in commodity prices. 'Compared to other emerging market currencies, the rand has held up well in recent sessions, despite ongoing uncertainty in global markets and the impact of international developments on investor appetite for risk assets.' Busisiwe Nkonki and Isaac Matshego, economists at the Nedbank Group Economic Unit, point out that the rand broke through R18/$, dropping to its lowest level since the second week of May as global risk aversion spiked and investors dumped emerging market assets. 'The local currency touched R18.15/$ on Thursday evening before recovering to around R18.01 this morning, down 1.2% from R17.80 on Monday.' The rand was trading at R17.99/$ this afternoon. ALSO READ: Inflation unchanged in May at 2.8% as economists expected Inflation remains at 2.8% in May According to the latest release from Statistics SA, inflation stayed below 3% in May at 2.8%, the same as in April. The largest contributions came from food and non-alcoholic beverages, which increased by 4.8%, primarily driven by higher meat prices. Katrien Smuts, economist at the BER, says while the recent foot and mouth disease outbreak put pressure on red meat prices, it was not the sole driver. 'Prices were already trending upward for several months and some analysts suggest the impact may be short-lived. Outbreaks often lead to export bans, which can increase local supply and place downward pressure on domestic prices. 'The ban on poultry imports from Brazil, due to an avian influenza outbreak, is expected to be temporary and limited to affected areas. While Brazil is a key poultry supplier to SA, the impact is also only expected to be short-lived.' Nkonki and Matshego say inflation remaining steady at 2.8% in May was in line with market expectations but higher than their 2.3% forecast. 'The primary contributor was food prices, although increases in housing, utilities and alcoholic beverages also played significant roles. Despite ongoing downward pressure from fuel prices, persistent price increases in other sectors shaped the overall inflation landscape.' Mamello Matikinca-Ngwenya, Siphamandla Mkhwanazi, Thanda Sithole and Koketso Mano, economists at FNB, note that fuel prices dropped sharply, but warn that risks from a weaker rand and rising global oil prices could reverse this trend. 'Despite current disinflation, geopolitical tensions and trade uncertainty ahead of the July Monetary Policy Committee (MPC) meeting suggest that the South African Reserve Bank (Sarb) will likely maintain a cautious stance and hold rates.' ALSO READ: China's clever trade deal with Africa – removal of tariffs on most goods Increase in retail sales in April, but motor trade decreases Statistics SA's latest retail trade sales data showed another solid performance in April, with sales increasing by 0.9% compared to March and 5.1% compared to a year ago. The main driver of growth was the general dealers' category, which increased by 5.3%. Despite another steep annual decline of 6.5%, wholesale trade sales perked up by 0.9% compared to March. However, motor trade sales decreased by 1% compared to March and by 0.9% compared to a year ago. Smuts says while the muted inflation print provides some welcome relief and April retail sales showed the consumer has some strength, the question is how long this can be sustained. 'Real incomes are squeezed amid unchanged personal income tax brackets, a pending electricity tariff hike in July and an increase in the fuel levy.' Nkonki and Matshego expect the upward momentum in retail sales to continue, supported by rising real incomes, subdued inflation, continued withdrawals of contractual savings and lower debt servicing costs compared to a year ago. Matikinca-Ngwenya, Mkhwanazi, Sithole and Mano point out that despite April's strong performance, retail activity over the past three months remains 0.5% lower compared to the preceding three-month period, suggesting that household spending may be losing momentum. 'The spike in annual sales likely reflects holiday-related spending and two-pot pension withdrawals coinciding with the new tax season.'
eNCA
16 hours ago
- eNCA
Trump 'Golden Dome' plan tricky and expensive: experts
WASHINGTON - President Donald Trump's proposed "Golden Dome" defence system is a plan that will face mammoth technical and financial hurdles, and could increase global insecurity, experts say. Trump announced plans for the space-based system last month, saying it would eventually cost around $175 billion and would be operational by the end of his term in 2029. The planned defence shield's name is a nod to Israel's Iron Dome that has intercepted thousands of short-range rockets since 2011. But the US defence system would intercept much bigger intercontinental threats. The plan comes after a 2022 Department of defence study pointed to advances by China and Russia. Beijing is closing the gap with Washington when it comes to ballistic and hypersonic missile technology, while Moscow is modernising its intercontinental-range missile systems and developing advanced precision strike missiles, it said. Trump has claimed the "Golden Dome" will be "capable of intercepting missiles even if they are launched from other sides of the world". But analysts are sceptical. "I'm not holding my breath," said Thomas Withington, an associate fellow at the RUSI defence think tank. "The challenges are so significant at this stage that they may simply be unrealistic to surround in the timeframes that the Trump administration envisages." - 'Poster child for waste' - Thomas Roberts, of the Georgia Institute of Technology, said the "Golden Dome" plan was based on being able to detect when a long-range missile was fired. A missile's so-called "boost phase" -- which produces a heat blast that lasts one to two minutes and can be observed from space -- is the best time to deploy defences, he said. "If you had an enormous constellation of interceptors in orbit at all times, they could be readily de-orbited -- or systematically removed from orbit -- to strike an intercontinental ballistic missile," he said. But Todd Harrison, from the American Enterprise Institute, said this would require a massive number of satellites. "It takes about 950 interceptors spread out in orbit around the Earth to ensure that at least one is always in range to intercept a missile during its boost phase," he said. But that means that if an adversary launches a salvo of ten missiles, some 9,500 interceptors would be needed to ensure at least ten are within range. "Given that China has about 350 intercontinental ballistic missiles and Russia has 306 -- not including their sub-launched ballistic missiles -- scaling a space-based interceptor system to meet the threat quickly becomes impractical." The non-partisan US Congressional Budget Office estimates that, just to stop "one or two intercontinental ballistic missiles", the United States would need a constellation of satellites costing between $161 billion to $542 billion. The US military could spend billions of dollars on research only for the next administration to nix the project, Harrison warned. "Golden Dome could become the poster child for waste and inefficiency in defence," he said. The plan also calls for developing satellites able to fire lasers at missiles to avoid too much debris on impact. But a European defence contractor said on condition of anonymity that such lasers are "still beyond what even the Americans are capable of doing". "It's just an excellent way to give the US (defence) industry substantial funding so they can increase their technological lead without necessarily aiming for actual operational deployment," the contractor said. - 'Global arms race'? - Trump's plan is reminiscent of President Ronald Reagan ambition for a Strategic Defense Initiative in the 1980s, which also sought to place interceptor satellites in space. China and Russia, which both have nuclear weapons, have slammed the latest plan as "deeply destabilising". Nuclear-armed North Korea has called the plan a "very dangerous" threat. Julia Cournoyer, research associate at Chatham House, said the plan was risky as adversaries would likely see it "as an attempt to undermine the logic of nuclear deterrence". "If Washington is perceived to be developing a shield that could one day neutralise a retaliatory nuclear strike, it risks triggering a dangerous global arms race," which would exacerbate rather than reduce risk. Withington said Trump might be hoping to use the plan as leverage for talks with China and Russia. "It may be that the Trump administration is hoping that this would bring both countries to some kind of negotiating table to talk about a reduction of nuclear warhead sizes or to revitalise the arms control agenda," he said.
IOL News
16 hours ago
- IOL News
Crypto traders, pay attention: legal changes are coming
South Africa's exchange control rules are laws that decide how money can move in and out of the country. They affect how much forex you can buy, how you invest overseas, and how businesses move funds across borders, says Davron Chanderdeo. A RECENT High Court ruling just confirmed something many of us in the crypto world have known for a while. South Africa's laws around money, especially when it comes to crypto, are completely outdated. Judge Mandlenkosi Motha ruled that the country's exchange control regulations, which were written way back in 1961, don't apply to cryptocurrencies like Bitcoin. That's a big deal, because up until now, traders and investors have been operating in a confusing space, unsure what the rules really are. So, what does this mean if you're trading crypto on Luno, VALR, or Binance? Whether you're an investor, casual buyer or someone who trades daily, here's how this decision affects you and what you should do next. Why this ruling matters South Africa's exchange control rules are laws that decide how money can move in and out of the country. They affect how much forex you can buy, how you invest overseas, and how businesses move funds across borders. Until now, there's been no clear rule about where crypto fits. Is it like rand? Is it a foreign investment? Or is it something totally new? Someone can transfer Bitcoin from Cape Town to a family member in Hong Kong in a matter of minutes and that transaction, under current law, isn't clearly defined as foreign or local. The court said: crypto is not covered by the old rules. It's time for new laws made just for digital currencies. So what changes for traders or the everyday South African? Let's break it down with a few real-life examples. You're trading from your couch: You buy Bitcoin on Luno, then move it to Binance for better trading options. Under the old rules, it was unclear whether that was considered 'sending money offshore'. Now? The court says crypto isn't covered, so you're technically not breaking exchange control laws. But this may change once new rules come in. You work for a financial firm or are an avid investor: Let's say your firm wants to launch a crypto ETF or offer Bitcoin as one of the assets in a pension fund. Right now, that's risky, because crypto isn't clearly identified as an onshore or offshore asset. Furthermore, Regulation 28 of the Pension Funds Act allows limited exposure to crypto assets (up to 10%), but asset managers remain cautious due to FSCA guidance and ongoing market volatility. This ruling could pave the way for investment houses to get involved which means more opportunities and better products for everyday investors. The bigger picture: why regulation is good for you Let's face it, most South Africans don't like the idea of more rules. But in the crypto world, the right regulation doesn't mean more red tape, it means more protection, less risk, and real growth. According to the Financial Sector Conduct Authority (FSCA), crypto-related scams are on the rise in South Africa, particularly across social media platforms like WhatsApp, Facebook, and Instagram. Fraudsters often impersonate legitimate traders or companies, promising unrealistic returns and then vanishing once funds are transferred via Bitcoin or other crypto. These scams exploit crypto's semi-anonymous nature, making it harder to trace transactions and recover funds. A 2023 FSCA report warned that South Africans lost over R500 million to crypto scams in just one year, with most scams originating via social media or messaging platforms. So why would these scammers ever stop? While there's currently no formal government-mandated transaction declaration process between crypto wallets, increased regulation may soon require verified identification through Know-Your-Customer (KYC) processes at local and international exchanges. This would make it harder for criminals to use crypto anonymously and easier for authorities to trace illicit activity. Implementing regulation will: - Help prevent scams by setting minimum standards for exchanges and wallet providers. - Make tax reporting easier, so you know what you owe and can plan properly. - Encourage large institutional investors (like pension funds and asset managers) to enter the market, bringing stability and liquidity. - Create a legal path for innovation, like launching crypto linked debit cards, savings products, or smart investment platforms. My final thoughts are that this ruling is a win for the crypto community, but it's also a wake-up call: the wild west era of trading is ending. That's not a bad thing, it means South Africa is taking crypto seriously. And when the law takes something seriously, so does the market. Traders who stay informed, track their gains, and keep things clean will benefit the most. Crypto is here to stay. With the right legal framework, it can shift from the margins to the mainstream, unlocking innovation, securing investor trust, and contributing meaningfully to South Africa's financial ecosystem.
