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Luno Anticipates Banks To Introduce Crypto Offerings In South Africa

Since the commencement of the application window in June, there has been a noticeable surge in interest from South African businesses in the realm of crypto.

By Anna B Kiwanuka

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A majority of businesses seeking licenses to provide cryptocurrency-related services in South Africa have existing registrations as financial service providers. This suggests a forthcoming inclusion of crypto products within their service repertoire upon the issuance of licenses.

Tarris Arnold, the business development manager at Luno, highlighted in a statement on Monday that “a minimal number of license applications submitted to the Financial Service Conduct Authority are from entities not already licensed as financial services providers.”

“Out of those applying for licenses, 73 are accountable institutions registered with the Financial Intelligence Centre. Since the commencement of the application window in June, there has been a noticeable surge in interest from South African businesses in the realm of crypto,” Arnold stated.

The regulation of this sector paves the way for institutional investment opportunities, offering access to a significantly larger capital pool. Financial service companies find crypto assets appealing for investment purposes, according to Arnold.

“Even those financial service firms that may not entirely embrace the intrinsic value or diverse applications of crypto recognize its value in terms of associated volatility. This volatility often translates to expanded profit margins. Furthermore, crypto, as a non-correlating asset class, provides a degree of risk mitigation for investments in conventional markets,” explained Arnold.

While the crypto market remains unregulated, it is presently excluded from pension funds and institutional investments. However, regulating this sector could open doors for institutional investors, introducing a substantial capital influx compared to retail investors.

“We’re witnessing a growing interest, with South Africa’s major banks having dedicated crypto teams for years. There are indications that they are gearing up to offer their clientele crypto-related products and services,” remarked Arnold.


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