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Binance predicts mainstream crypto adoption in SA

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 27 Jun 2023
Hannes Wessels, country head of South Africa for Binance.
Hannes Wessels, country head of South Africa for Binance.

Crypto-currency exchange Binance is ramping up its online-based crypto-currency learning academy in South Africa, in preparation for mainstream adoption of crypto in the long-term.

In a wide-ranging interview, Hannes Wessels, country manager for Binance South Africa, told ITWeb that the world’s biggest crypto-currency exchange is seeing continued growth of crypto-currency adoption in SA.

This, after recording a significant increase in users of its Binance Pay payments offering across the African continent over the past year.

Wessels envisions a future where digital currency is a medium of exchange, as more South Africans explore new ways of transacting and investing, to circumvent expensive traditional banking models.

In preparation for increased uptake, Binance has been engaging SA’s higher learning institutions, to look at ways to scale its Binance Academy, an open-access learning hub that provides free blockchain and crypto education in over 10 languages.

“We’ve seen growing user adoption in SA, and education has been at the heart of Binance’s mission across Africa. We are seeing a willingness to learn from South Africans who are eager to find out more about crypto. Crypto is the value exchange mechanism of the future, and we want people to be ready for it when it takes off.

“All educational information in our academy is available in article and Q&A format. The information is broken down into themes, and academy visitors can search for any crypto-related topic they want to learn about,” explains Wessels.

While Binance opened shop locally in July 2022 − taking on crypto exchanges such as Luno, AltCoinTrader, Ovex and VALR − the Binance mobile app has been available in SA since it made its global debut in app stores in 2017.

Apart from its digital asset exchange, its product portfolio includes Binance Labs, a venture capital and accelerator arm, and the Binance non-fungible token (NFT) marketplace, dedicated to building a community-focused platform.

The company also has a research arm, which it says provides institutional-grade analysis, in-depth insights and unbiased information to all participants in the digital asset industry.

While Binance has seen growth in South African crypto accounts on the platform, Wessels could not disclose user numbers. He notes many Binance account-holders also have other accounts with crypto exchanges − reflecting a healthy growth trend locally.

Triple-A, a licensed crypto payment gateway, estimates over 5.8 million people – 9.44% of SA’s total population − currently have crypto-currency accounts. It states these South African crypto enthusiasts own a wide range of crypto-currency, with Bitcoin, Ethereum, Ripple and US Dollar Tether being the most popular crypto assets.

“I could describe user adoption of crypto in SA as a parabolic curve; it goes slow, then it goes fast and there's the maturity stage where it grows slowly. I don't think we are on the steep part of the curve yet,” says Wessels.

“In a country with so many migrant workers, many people in SA often send money home, which is often outside the country. If people use the traditional banking system, they can pay up to 10% of the amount being sent in transaction fees – now that’s no longer fees, it’s like paying tax. It could also take around seven days for the money to reach its destination. With crypto, the transaction is free and immediate.”

According to Wessels, the first step to increasing mainstream adoption of crypto in SA and across the continent is improving access to crypto-currency-based financial services to ensure adoption across the entire value chain, including the retailers and banking sector.

Another important element to creating a conducive crypto environment, he points out, is the regulation of crypto.

The South African Reserve Bank is working to introduce a regulatory framework to govern crypto transactions.

“Crypto-currency regulation is a good thing. It gives users a safety umbrella which they didn't have before. The crypto user, in the same way as the retail user, the corporate user and the bank user, will now have someone they can go to if something goes wrong with their crypto wallet, and see how they can get the issue taken care of. That's mainly what the regulations are for, as well as creating a stable environment.”

Binance plans to introduce more NFT-related services, particularly an NFT-based property transfer system, he concludes.