Banks will soon offer crypto products in South Africa: Luno

Most of the businesses that have applied for licences to offer cryptocurrency-related services in South Africa are already registered as financial service providers, suggesting crypto products will be added to their offerings once licences are issued.

Luno business development manager Tarris Arnold said in a statement on Monday that “very few of the licence applications submitted to the Financial Service Conduct Authority are not licensed financial services providers”.

“Of those that applied for licences, 73 are accountable institutions registered with the Financial Intelligence Centre. Since the application window opened in June, we have seen much higher interest in crypto from businesses in South Africa.”

Crypto assets are attractive to financial services companies as an investment, he said.

“Even financial services companies that don’t buy into the fundamental value of crypto or its other use cases see value in the volatility associated with crypto assets. Volatility is beneficial as it often equates to greater profit margins. In addition, crypto is a non-correlating asset class and thus provides some mitigation for investments in traditional markets,” Arnold said.

Although the crypto market is still unregulated, it is specifically excluded — for now — from investments by pension funds and other institutions. However, regulation of the sector opens the door to institutional investment – and a much greater pool of capital than retail investors.

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“We are seeing an uptick in interest – South Africa’s large banks have had crypto teams for years and there are signs that they are gearing up to offer their customers crypto products and services,” Arnold said.  – © 2023 NewsCentral Media

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