The government of South Africa recently released its budget for the current year, when it specifically mentioned stablecoins and blockchain use cases to boost digital payments.
Blockchain adoption in South Africa will likely get support from the government to increase digital payments in the country. The government, while publishing its annual budget, mentioned its plans to boost the adoption of digital payments. According to the budget document, stablecoins and other blockchain use cases will play a big role in ensuring it.
At the same time, the annual budget stated the need to implement structural reforms and improve public financial management. Meanwhile, the budget also announced amending South Africa’s crypto policy to include stablecoins. It said stablecoins will be regarded as a particular type of a crypto asset in South Africa.
The change in crypto policy could transform the stablecoin landscape in the country. Moreover, the Intergovernmental Fintech Working Group which had published a crypto regulatory paper in 2021, will include the additions.
The budget report said the working group will “conduct analytical work to understand the applicable use cases of stablecoins and to recommend an appropriate policy and regulatory response. The group will also finalize a diagnostic of the domestic stablecoin landscape,” to implement the new decisions.
Further, the new rules will require institutions to report crypto transactions above a certain limit. The budget report also described the government studying blockchain-based tokenization. It is researching its impact on the country’s domestic financial markets. Other initiatives include publishing a paper on tokenization by the end of 2024 and starting digital payment research projects.
South Africa has been an advocate of blockchain adoption for a long time. Its regulators brought crypto under the ambit of financial products in 2022 while incentivizing private players as well. Pick n Pay, a retail giant in South Africa, started Bitcoin payments for its users in 2023, proving a successful use case.
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