Africa’s Crypto Boom: Insights from Cape Town Gathering

Crypto Fest 2023 blasted into Cape Town, celebrating the next evolution of digital assets and locally built solutions.

International headlines may be applauding the fall of some of the first crypto superstars, but a strong attendance at Africa’s premier crypto industry meetup demonstrates that digital solutions can still make a meaningful, positive difference on the continent.

Crypto Fest 2023 invited Web3 enthusiasts to experience Cryptopia at Cape Town’s exclusive Cabo Beach Club and hundreds answered the call, a testament to the resilience of the community that is facing a harsh reality.

Hannes Wessels, General Manager of Southern and Francophone Africa at Binance – the Title Sponsor of Crypto Fest 2023 – reiterated the role of blockchain as a tool for innovation in the event’s opening keynote. He also didn’t shy away from the news circling the company and former global CEO Changpeng Zhao.

“I know as much as you do, which is what we have all read in the news,” admitted Wessels before explaining that he cannot engage on topics about the international company, only the local Binance operations.

Business as usual

It’s still business as usual in Africa and, judging by the quality of the solutions presented in the African Web 3.0 Pitchfest, business is booming. The startup pitching competition was hosted in partnership with CV VC, NODO and MZANSI WEB3 ICP.HUB SA.

Paie impressed the judges enough with a fully formed user-friendly app for accessing global financial services and walked home with the top honours sponsored by NODO.

The service is designed to make it easy for everyone, everywhere, to hold global assets and build wealth. With the Paie app you can easily access global currencies through fiat-backed stablecoins, earn interest and grow your savings.

Innovations like this are in line with the Crypto Fest mission of creating an environment where users from all walks of life can interact with these lifechanging technologies to build economic security.

And nowhere in the world are these solutions needed more than in Africa.

“Bitcoin dominates cryptocurrencies in sub-Saharan Africa because its seen as a better way to preserve wealth as a store of value,” Chainalysis Senior Solutions Architect Zakaria Ellaoui explained during his market insights session focusing on the company’s Crypto Adoption Index.

“Nigeria has seen a nine percent year on year increase in crypto transactions and there is significant demand for stablecoins across the continent because people see these as safer options. There is an appetite for risk, though. We‘ve seen a surge in altcoins in the region.”

The road to regulation

Ellaoui had high praise for South Africa’s efforts in establishing crypto regulations and said that the country is a leader on the continent in this regard. “It was a great move to license crypto businesses because we’re seeing a migration of fintech startups to South Africa.”

Nonkululeko Musa Ntuli echoed his sentiments during her session which unpacked the Evolution from Web2 to Web3 in an easily accessible way. “Regulators want to control crypto because that will bring compliance and create stability. It is not necessarily bad for the market.”

While South Africa’s recognition of crypto financial products was a big step in the right direction, there is still work to be done in legitimising the asset class as legal tender.

Gideon Rossouw, Web3 Enablement Executive at Nedbank stated on the Future of Stablecoin Regulation panel discussion. “We as banks can’t take the risk because if we go bust, the economy will certainly be affected. Regulators are looking at it from the perspective of applying a level control in proportion to the effect on the market.”

Cryptocurrencies do not have widespread status as legal tender, but they are regarded as assets in South Africa and can be tendered to a creditor as a valid and legal offer of payment, if you can find a vendor who accepts crypto.

The Lightning Network and related payment technologies have managed to plug the gap in retail acceptance of crypto, there is a lot of development happening in anticipation of future regulatory landscape shifts.

Cryptopia lives in Africa

Rossouw also addressed the challenges of creating a single stablecoin for the continent, suggesting that it may be a utopian idea, but the practical implementation would quickly become dystopian.

“There are currency blocks that you can look at around the world, like the Euro. Each country has different political and fiscal processes, and it makes it difficult to establish a single currency to trade in. Even in Europe it’s not working that well.”

In the heart of Cape Town, Crypto Fest 2023 emerged not only as a celebration of digital assets but as a testament to Africa’s unwavering commitment to innovation. While global headlines may focus on the challenges faced by crypto giants, the thriving attendance at this premier industry gathering paints a different picture—one of resilience and determination within the African crypto community. Beyond the challenges, the crypto community stands united, poised to turn discussions into reality and usher in a digital utopia that extends far beyond the Mother City’s shores.

Cryptopia’s presence in Africa is not just a momentary affair; it is a burgeoning force that promises to grow stronger.