In South Africa, Bitcoin adoption is starting to pick up the pace.
In South Africa Bitcoin is very much still an emerging market. However, that is starting to change.
Citizens have been enduring massive inflation for years now and have been searching for something, anything, as a means of protecting their wealth.
Here is a chart of the South African Rand against the US Dollar over the last 5 years:
Not a pretty picture, and it's even worse when you look back at the last 10 years. Basically, anyone who has held their money in a bank can purchase less than half of what they could purchase just a couple years prior with the same amount of money.
Enter Bitcoin
Currently there are about 100,000 users on the two main Bitcoin exchanges, Luno and Ice3X. That is not a large number but that number has been increasing rapidly over the last year or so.
Citizens are flocking to these exchanges as a means of preserving their wealth and to be a part of the current Bitcoin boom, or Bitcoin gold rush as some are calling it.
The Luno Marketing Officer, Werner Van Rooyen, said that it isn't just about new users signing up for the exchanges, but instead it is that Bitcoin overall is becoming more mainstream in South Africa.
"We see it in many ways,"
According to Van Rooyen...
"Not just from our own internal metrics, which include new customers, active users, application downloads, trading volumes and interest from banks and institutional investors - but also from other places: trading volumes that keep growing, increased merchant adoption, increased understanding by investors, regulators and banks, press coverage, and also the number of Google searches on Bitcoin."
Adding to that, The South African Reserve Bank also just announced that it would be starting a Bitcoin regulation experiment via a "sandbox" setup through a blockchain-based solutions provider called BankyMoon.
More about that can be read here:
https://cointelegraph.com/news/south-african-central-bank-to-start-bitcoin-regulation-experiment
Why the need for Bitcoin?
As mentioned above, South African's are getting hurt by inflation. Every year any money that they are holding is able to purchase less and less.
Political turmoil has been a major reason for this. The country was also just recently downgraded to Junk Status in terms of it's credit rating by the rating's agencies Fitch and S&P.
There are constant reports of corruption at the highest political levels and fighting amongst political parties which all negatively affects the value of their currency.
Bitcoin offers a hedge against that downward sloping local currency. Bitcoin is volatile as well, but over the years it has a predominantly upward bias vs. the Rand's downward bias over the same time period.
Van Rooyen noted:
"When there is a nosedive in, say the exchange rate for the Rand, you'll often notice a downtrend in other industries like the stock market or the housing market. Bitcoin has been found as one of the assets with the lowest correlation to other asset classes."
Which means South African's have few other options.
More than a store of wealth?
Currently the best use case for Bitcoin in South Africa is as a store of wealth, however, that isn't it's only use...
South African's biggest online retailer Takealot, accepts Bitcoin. Takealot is basically their version of Amazon.
Takealot's Chief Marketing Officer, Julie-Ann Walsh had this to say regarding Bitcoin payments:
"When we launched the Bitcoin payment option in 2014, Takealot was one of the first South African online retailers to allow customers to transact using Bitcoin, which then accounted for just under .1% of all transactions. While this is still a very small portion of our overall sales, the number of Bitcoin transactions has increased year on year since launching the service and from 2016 till now we have seen a 170% increase year on year in Bitcoin transactions."
Bidorbuy, has also been accepting Bitcoin. Bidorbuy is basically their version of eBay.
Heck, even the Nelson Mandela Children's Hospital Fund takes donations in Bitcoin.
As you can see, Bitcoin is a useful store of wealth for citizens in South Africa, but as time goes on it is quickly becoming MORE than just a store of wealth in South Africa.
Stay informed my friends!
Sources:
https://www.xe.com/currencycharts/?from=ZAR&to=USD&view=10Y
https://cointelegraph.com/news/south-africans-make-bitcoin-work-for-them-as-currency-store-of-wealth
https://cointelegraph.com/news/south-african-central-bank-to-start-bitcoin-regulation-experiment
Image Sources:
https://ice3x.co.za/
