South Africa Explores Stablecoins For digital Payment

South African Treasury’s budget proposal aims to boost digital payments exploring stablecoins and blockchain to uplift groups.

The South African Treasury made its proposal to encourage the use of digital payments in the country’s yearly budget. It involves looking into stablecoins and blockchain technology in order to “improve the lives and livelihoods of marginalized groups.

The nation’s budget assessment for 2024 emphasized the need for structural changes and the importance of improving public financial management.

The Treasury revealed a pending policy shift on crypto assets, specifically stablecoins while outlining its intention to encourage digital payments.

“In 2024, the Intergovernmental Fintech Working Group will publish additions to include “stablecoins” as a particular type of crypto asset.”

The working group finalized a diagnostic of the domestic stablecoin scene and issued a crypto regulatory paper in June 2021. The document will include stablecoins in the crypto asset class.

The Financial Intelligence Centre (FIC) Act may change to mandate that any institution reports cryptocurrency transactions above 49,999 South African rand ($2,650). Additionally, South Africa will research how tokenization based on blockchain affects home markets for financial services.

“ It will conduct analytical work to understand the applicable use cases of stablecoins and to recommend an appropriate policy and regulatory response.”

The working group anticipates releasing a study on the policy and regulatory implications of tokenization and blockchain-based financial market infrastructure by December 2024.

In addition, the South African government will oversee a three-year initiative to carry out four pilot projects for digital payments in association with FinMark Trust and the State Secretariat for Economic Affairs of Switzerland.

Digitalization of informal and low-income worker payments, cross-border trade, cross-border remittances, and community digitalization are the four pilot projects. The initiative’s goal is to use innovative payment methods to promote small and informal companies

Blockchain technology allowed South Africa’s aspirations for digital disruption to benefit East African farmers by providing them with access to international markets.

AgTech company Dimitra and One Million Avocados (OMA), a tech company with a focus on sustainability announced a collaboration on July 20th 2023, to assist Kenyan avocado growers in increasing productivity and quality by utilizing cutting-edge new technologies such as blockchain.