South Africa’s annual budget has unveiled a plan by the treasury to promote the adoption of digital payments, with a particular focus on stablecoins and blockchain technology. The aim is to enhance the lives and livelihoods of marginalized groups in the country.
In its review of the 2024 budget, the National Treasury emphasized the need for structural reforms and improvements in public financial management. As part of its strategy to encourage digital payments, the treasury announced an upcoming policy change regarding crypto assets, specifically stablecoins.
To achieve this, a working group has published a paper on crypto regulation in June 2021, which will be updated to include stablecoins in the crypto asset class. The group will also finalize an assessment of the domestic stablecoin landscape. The report stated:
“In addition, the Financial Intelligence Centre Act may be amended to require all institutions to report crypto transactions over 49,999 South African rand ($2,650). South Africa will also examine the impact of blockchain-based tokenization on domestic financial markets.”
The working group is expected to release a paper by December 2024 outlining the policy and regulatory implications of tokenization and blockchain-based financial market infrastructure.
Furthermore, the South African government plans to collaborate with Switzerland’s State Secretariat for Economic Affairs and FinMark Trust on a three-year program. This initiative will involve four digital payments pilot projects, including community digitalization, digitizing payments for informal and low-income workers, cross-border remittances, and cross-border trade. The objective is to support small and informal businesses through innovative payment solutions.
South Africa’s efforts to embrace digital disruption have already proven successful for East African farmers, as blockchain technology has provided access to global markets for remote populations. On July 20, 2023, AgTech firm Dimitra and One Million Avocados (OMA), a sustainability-focused tech group, announced a partnership aimed at assisting Kenyan avocado farmers in increasing production and quality through cutting-edge emerging technologies, including blockchain.
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