South Africa pushes blockchain, stablecoin adoption in 2024 budget review

South Africa blockchain adoption: South Africa's annual budget unveiled the Treasury's strategy to advance the adoption of digital payments, aiming to improve the well-being of marginalised communities by exploring stablecoins and blockchain technology. Outlined in the country's 2024 budget review, the Treasury underlined the importance of structural reforms and boosting public financial management. As part of its initiative to promote digital payments, the Treasury announced plans to address crypto assets, particularly stablecoins.

"In 2024, the Intergovernmental Fintech Working Group will update its framework to encompass 'stablecoins' as a distinct category within the realm of crypto assets."

Building upon a crypto regulation paper released in June 2021, the working group will refine its framework to include stablecoins and conduct an assessment of the local stablecoin landscape to inform policy and regulatory decisions.

Furthermore, potential amendments to the Financial Intelligence Centre (FIC) Act may mandate reporting of crypto transactions exceeding 49,999 South African rand ($2,650), while a study will explore the impact of blockchain-based tokenisation on domestic financial markets.

Anticipated by December 2024, the working group will present findings on "the policy and regulatory ramifications of tokenisation and blockchain-based financial market infrastructure."

In collaboration with Switzerland's State Secretariat for Economic Affairs and FinMark Trust, the South African government will implement a three-year program to pilot four digital payment projects. These projects encompass community digitalisation, digitising payments for informal and low-income workers, facilitating cross-border remittances, and supporting cross-border trade to foster innovation in payments and bolster small businesses.

This move towards digital disruption aligns with previous successes seen in East Africa, where blockchain technology facilitated access to global markets for remote populations. In a notable partnership announced on July 20, 2023, AgTech firm Dimitra and One Million Avocados (OMA) collaborated to empower Kenyan avocado farmers with advanced technologies, including blockchain, to enhance production and quality.