With over 30 000 outlets, including Dis-Chem and Pick n Pay accepting crypto, the tide is turning in favour of this new technology. This could be good for Africa
Shane Berkman* has made hundreds of thousands of rand by investing in crypto currencies. He is cagey about the exact amount and unwilling to give too many details. He does not want to give his real name, either, and is worried it will draw too much attention to him.
“But I can tell you, that is how we will all be banking in future,” he says. “Just like the post office disappeared in South Africa, banks too will disappear.”
Depending on who you ask, crypto currencies are either a fad that will blow over — or the future of financial transactions. But whatever your personal thoughts are on the technology, there are clear signs that it is gaining ground globally and that it has significant potential for the African continent.
For instance, early in October 2024, it was reported that 31 000 South African merchants had partnered with the Luno crypto platform and Zapper to enable payments with crypto currency. Customers can scan any Zapper QR code to make payments through the Luno app at the tills. Major retailers such as Dis-Chem, FlySafair, Steers, Wimpy and fuel stations accept it for payments.
One of SA’s biggest supermarket chains, Pick n Pay, is making R1 million a month in sales from shoppers buying from groceries to airtime via crypto currency.
“We started from a low base of around R25 000 per month and it has grown exponentially every month over the past year,” Deven Moodley from Pick n Pay explained.
To pay with crypto currency, customers need to create a Bitcoin Lightning or Binance wallet, and download the CryptoQR app from Money Badger, then scan the QR code directly from the Luno or VALR app.
He added, “For years, crypto was something only computer boffins knew about, but Pick n Pay has paved the way for our shoppers to be early adopters in using their digital currency as a method of everyday payment.”
There is another sign that attitudes are changing in favour of crypto currencies. The South African Revenue Service (Sars) recently warned SA taxpayers to comply with regulations by declaring their assets. It noted the “phenomenal growth” of various digital currencies and stated more than 5.8 million South Africans hold a crypto asset.
“South Africa [is] boasting the largest uptake of bitcoin in the world,” it stated, adding “Sars is concerned that these crypto assets and trades are not being declared on the tax returns of taxpayers.”
It seems that crypto currencies are not going anywhere. On the contrary, they are expanding worldwide. My own research, published by Henley Business School, shows the industry has exploded since the introduction of bitcoin, the first crypto currency, in 2009. In 2024, the number of crypto currencies surpassed 20 000.
Many retailers, however, remain hesitant about accepting crypto currency mainly because of trust issues and concerns about taxation and regulation. And indeed, one of the chief reasons that investors, like Berkman, applaud the technology, is because one of its purposes is to protect the identity of investors from financial authorities and governments.
Crypto currencies bypass the many regulations imposed by traditional financial institutions for personal information about the customer. The positives of this are that cross-border transactions are simpler, as currency conversions are not necessary, scrapping the need for complicated calculations. It is convenient, with money being available immediately. There is no paperwork required for international transfers.
But of course, there are risks too. Crypto currencies are extremely volatile, with huge price fluctuations. There is a possibility for illegal and fraudulent transactions and various crimes become easier to execute. While countries internationally are continuing to discuss regulation, there is no agreement on the urgency of this.
Meanwhile, attitudes are changing. I spoke to 15 C-suite executives who play in the domain name ecosystem in South Africa and beyond who showed enthusiasm and acceptance of crypto currencies. They indicated the appeal of circumventing limitations and cutting down on expensive credit card transaction fees.
More importantly, they think that the technology has the potential to bring more unbanked people into the financial system. All a customer needs is a crypto wallet, supported by a mobile device.
The World Bank estimates that 80 million people don’t have access to formal banking systems on the African continent. According to Adam Swick from Mara Holdings, formerly known as Marathon Digital, the largest crypto mining firm in the US, Africa is “definitely” the next frontier for crypto currencies.
While the uptake of crypto currencies on the continent might be lower than in the rest of the world, there are signs this is changing, mostly because of the weakness of domestic currencies. And there is another consideration — the mining of the currencies.
Mining the crypto coins (the making of the virtual coins) requires considerable power. Africa’s potential for offering renewable energy in terms of solar power is already attracting worldwide attention. The continent has 60% of the world’s best places to generate solar power.
So-called crypto miners have already earmarked Ethiopia as a potential country for more affordable power generation. In Kenya, a crypto mining company called Gridless has expanded operations to three African countries. Clearly, there are significant opportunities here for businesses and countries bold enough to seize them.
In the end, I cannot help but agree with the businessperson who said to me, “It would be better to work with it, live with it, learn and improve with crypto currencies instead of burying one’s head in the sand and hoping that it will go away.”
Simla R Budhu is the author of Cryptocurrencies: Have organisations crossed the Rubicon of financial systems? published by Henley Business School Africa. She is chief operations and legal officer at ZA Central Registry NPC and director of Risk and Compliance at ZA Registry Consortium.
