South Africa’s annual budget has revealed the government’s intention to promote the adoption of digital payments. The treasury plans to analyze stablecoins and blockchain technology in order to enhance the lives of marginalized groups. The budget review for 2024 emphasizes the need for structural reforms and improvements in public financial management. As part of its efforts to promote digital payments, the National Treasury will introduce a policy change regarding crypto assets, with a specific focus on stablecoins.
In June 2021, a working group published a crypto regulation paper, which will now be revised to include stablecoins in the crypto asset class. The group will also finalize an assessment of the domestic stablecoin landscape. According to the report, there is a possibility of amending the Financial Intelligence Centre Act to require all institutions to report crypto transactions exceeding 49,999 South African rand ($2,650). Additionally, South Africa will study the impact of blockchain-based tokenization on its domestic financial markets.
By December 2024, the working group is expected to publish a paper outlining the policy and regulatory implications of tokenization and blockchain-based financial market infrastructure.
In collaboration with Switzerland’s State Secretariat for Economic Affairs and FinMark Trust, the South African government will initiate a three-year program that includes four digital payments pilot projects. These projects aim to support small and informal businesses through payment innovation and will focus on community digitalization, digitizing payments for informal and low-income workers, cross-border remittances, and cross-border trade.
South Africa’s efforts to embrace digital disruption have already yielded positive results in East Africa. Blockchain technology has enabled remote populations, such as East African farmers, to access global markets. On July 20, 2023, AgTech firm Dimitra and One Million Avocados (OMA), a sustainability-focused tech group, announced a partnership to assist Kenyan avocado farmers in improving production and quality using cutting-edge emerging technologies, including blockchain.
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