South Africa's Treasury Eyes Blockchain and Stablecoins to Promote Digital Payments
Summary:
South Africa's treasury plans to encourage the adoption of digital payments, particularly focusing on blockchain and stablecoins, as revealed in their annual budget. They aim to improve the lives of marginalized communities, highlighting the need for structural reform and enhanced public financial management. Their impending policy shift on crypto assets will see "stablecoins" recognized as a distinct crypto asset category by 2024. The government also plans a three-year program for digital payment pilot projects, which anticipates supporting small and informal businesses. Blockchain technology has already had a positive impact on East African farmers, demonstrating the potential success of these initiatives.
South Africa's treasury unveiled plans in their annual budget to encourage digital payment adoption, including examining blockchain and stablecoins, with the aim of improving the circumstances of marginalized communities. The 2024 budget review underscored the necessity for structural changes and enhancements in public financial management. As part of its digital payment initiatives, the Treasury announced an impending policy shift on crypto assets, particularly stablecoins. The Intergovernmental Fintech Working Group is set to extend its definitions in 2024 to incorporate "stablecoins" as a specific crypto asset category.
In June 2021, this group had already released a paper on crypto regulations which will be revised to include stablecoins as a distinct class of crypto assets while concluding an evaluation of the local stablecoin scene. The report stated its intention of carrying out analytical tasks to comprehend the suitable applications for stablecoins and to propose an apt policy and regulatory response.
Furthermore, potential amendments to the Financial Intelligence Centre (FIC) Act could necessitate institutions reporting all crypto transactions surpassing 49,999 South African rand ($2,650). South Africa is also set to probe into the influence of tokenization, based on blockchain, on the local financial markets.
A paper outlining the policy and regulatory repercussions of tokenization and blockchain-based financial market infrastructure is due for publication by the working group in December 2024. Alongside this, the South African government plans to launch a three-year initiative in partnership with Switzerland's State Secretariat for Economic Affairs and the FinMark Trust. This will involve four pilot projects related to digital payments, namely community digitalization, digitizing payment of low-income and informal workers, cross-border trade, and remittances. The intent behind this initiative is to assist small and informal businesses by innovating payment methods.
Moreover, South African pioneers of digital disruption have already made headway with East African farmers through blockchain technology, granting access to global markets for isolated populations. On July 20, 2023, AgTech company Dimitra and One Million Avocados, a tech group emphasizing sustainability, partnered for boosting production and quality among Kenyan avocado farmers via advanced emerging technologies, including blockchain, demonstrating the possibilities of these plans in practice.
Published At
2/22/2024 11:42:07 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.