Tuesday, January 31, 2023

International cryptocurrency infrastructure provider Binance announced the addition of a South African Rand (ZAR) gateway on their platform. The move allows South African residents to load their Binance wallets directly with South African Rand and convert them into Bitcoin (BTC), Ether (ETH), Binance USD (BUSD), Tether (USDT) and Binance (BNB).

The development will allow South African binance users to make deposits via Instant Electronic Funds Transfer. This comes a week after the South African Reserve Bank (SARB) released guidance encouraging banks to ease the way for South Africans to transact with cryptocurrencies.

  • Binance Adds the ability to buy cryptocurrencies with Rands
  • South Africans will now be able to buy cryptocurrencies through EFT
  • Impending regulation is seen as a positive

Binance

Binance launched in July 2017 as the crypto-to-crypto exchange (swap) platform. It grew in popularity to quickly become the world’s largest cryptocurrency exchange. Binance offers a wide range of cryptocurrencies on their platform, over 600 according to Binance. The exchange had a market capitalisation of US$1.3 billion as of April 2021.

Binance offers a gateway to multiple altcoins and is favoured by many cryptocurrency traders because of its wide offering and swap capability.

The problem

South African banks have had controversial relationships with cryptocurrency exchanges. In 2018 South African banks moved to summarily close accounts of some cryptocurrency exchanges owing to the risks associated with cryptocurrency dealing.

The South African Reserve Bank has historically not been hostile towards cryptocurrency but the banks have chosen to distance themselves from cryptocurrency service providers. As such South Africans had to endure the additional step of converting South Africans to US dollars to load their wallets. Not the most complex process but an inconvenience as it meant going through payment providers such as MasterCard and VISA rather than buying directly from bank accounts.

SARB encourages banks to play nice

The South African Reserve bank recently gave guidance to banks to improve their risk management processes to cater for crypto-assets and Crypto-asset service providers and pave the way for South Africans as regulation for crypto-asset dealing in the country is coming very soon.

In addition, the South African Revenue services are also contributing to the regulation to make crypto asset gains taxable. The country currently taxes them but without specific regulations. Nothing says a country is serious about being inclusive of activity like taxing it.

Binance confirms the trend

Cryptocurrency has found great popularity in Africa with many viewing it as the next form of money. South Africa leads Africa in terms of cryptocurrency ownership as a percentage of the population. All signs are pointing to increased cryptocurrency adoption in Africa’s largest economy. We should expect to see more moves like this as the South African authorities get their ducks in a row.

The development will allow more South Africans to have easier access to crypto assets and this is positive for cryptocurrency adoption in the country.

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