This is an opinion piece by Absa CIB Digital Product Managers Nkahiseng Ralepeli and Robyn Lawson who work on stablecoins and custody, respectively, exploring the role of digital asset regulation in Africa.
As increasingly institutions (and individuals) gear up to navigate the digital asset market in Africa, it is crucial torecognize the importance of effective regulation in shaping a secure and credible market environment. This discussion highlights the role of regulatory frameworks, focusing on recent South African regulatory developments and how they benefit participation in the market for Absa and our clients.
Digital assets, such as cryptocurrencies and blockchain technologies, are subject to significant fluctuations and speculative activities. Effective regulation is key in Africa, with countries such as Nigeria, Mauritius, Kenya, and South Africa (to name a few) taking steps to establish clear crypto regulatory frameworks. In South Africa, current data indicates that more than 10% of South Africans are already engaging with digital assets, a figure projected by the Financial Sector Conduct Authority (FSCA) to surge to 43% by 2030 in their market study report. This significant growth trajectory underscores the urgent need for a robust regulatory framework to support stable market expansion and protect consumers. By advocating for robust regulations, we want to ensure the protection of our clients’ investments from market unpredictability, which in turn attracts cautious investors and contributes to market stabilization.
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