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South Africa has entered recession for the first time since 2009. That’s a good run of 9 years avoiding the dreaded fate. While Donald Trump continues to “make America great again” at the expense of emerging markets, South Africans have to come to terms with the fact that they will always be at the mercies of global powerhouses in the West. This was emphasised yesterday when the news broke that the country had entered a Technical Recession, experiencing GDP contraction for two consecutive quarters.

We wrote about the news yesterday, speculating on increased crypto adoption in SA in the light of a pummelled Rand. And while it remains speculation, it would seem that investors are eyeing anything that could protect the buying power of their capital. It’s difficult to know exact numbers, but stats are indicating that crypto adoption in South Africa is indeed on the rise.

Marius Reitz, Country Manager at Luno (Africa’s largest Bitcoin exchange), said that while they haven’t experienced a directly correlated signup surge as yet, there is certainly an upward trend in user adoption.

“We have (certainly) seen increased signups over the past two quarters,” said Reitz, “There is an improved understanding of what Bitcoin is and what it can be used for, and we continue to see steady growth in adoption of Bitcoin and cryptocurrencies in general.”

Luno recently conducted consumer research in SA on cryptoasset adoption, revealing that their findings showed 29% of participants own a cryptocurrency, while 53% are interested in buying it.

“Improved awareness facilitated by greater Bitcoin visibility in the mass media helps attract new users by educating them about investment best practice,” concluded Reitz.

Meanwhile, Standard Bank’s chief Blockchain Strategist and Director at Blockchain firm Blink, Paresh Daya, underlined the adverse affects of a volatile economy.

“As with all emerging economies, South Africa suffers with a volatile economy which (in turn) adversely affects the sovereign currency – as the latest economic figures have shown.”

Daya says there could well be a correlation to increased crypto adoption, adding that Venezuela’s example is one to take note of.

“We have seen an increase of crypto adoption in the country due to a myriad of factors, with the majority being a lack of trust in the economy and people seeking an alternative to the weakening Rand. We have witnessed a massive move towards bitcoin in Venezuela due to skyrocketing inflation, however, I believe there is much more education and awareness to be raised around crypto in South Africa.”

While there is no doubt that Venezuela is a unique example in the illustration of weakening economies, Daya’s comments around increased crypto education are important to take note of ahead of what could be tumultuous times for South African consumers.

The reality remains: The South African Rand will continue to battle in a sea of downturned emerging markets. So perhaps more than ever it “pays” to have at least some understanding of what could very well be the future of finance? Whether that future be Bitcoin or an alternative, there is little doubt that the value of the world’s leading cryptocurrency is becoming more and more attractive to South African investors.

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The views expressed by the interviewees in this article are the personal opinion of the quoted interviewees, and do not necessarily reflect the views of Luno or Standard Bank.

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