Although Africa is often seen as the cradle of the adoption of crypto, the largest economy on the continent, South Africa, one of the leading countries in the region in terms of crypto adoption and regulations. The new report published by the local financial supervisor emphasizes the clear prospects for the South African Defi sector.
Table of contents
The purpose of the study
On February 20, 2025, the Authority behavior of the financial sector published a study called Market Study on Decentralized Finance (Defi) in South Africa. The study is based on an overview of providers of crypto assets and is intended to help local regulators better understand the role of Defi in South Africa.
Timing is important because South Africa became one of the world’s leading countries in the Defi sector in the 2020s. Since the sector itself is already the economic outlook of the country, there is clearer regulations in question, especially when it comes to the relationship between the banks and providers of crypto activa.
According to the study, the estimated annual turnover of the South African Defi sector is $ 2.8 million. The most important players on the market are retail customers (71%), followed by small and medium -sized companies. The most important factors behind the sector growth that has been identified in the study are facilitated financial inclusion by Defi, low transaction costs and transparency.
The growing significance of the Defi sector in the local economy entails new risks. The study points them out, with reference to price manipulation, security surcharges of smart contracts, potential platform errors and fraud as the most important threats related to decentralized financing. The risks set out in the study include guardianship risk, Oracle Risk, liquidity risk and much more. The study suggests that regulations must invoice these risks to guarantee the protection of users.
Respondents believe that the most important ways to protect users are associated with improved regulations and educational efforts that are aimed at increasing the financial literacy of the residents.
The figures
More than a third of the respondents are of the opinion that the South African Defi sector Sector exceeds more than $ 27 million, which is not a large share in the global total, but is still important in the region. Moreover, it grows fast. The General Defi market in South Africa is expected to reach $ 180 million by 2028.
The study shows from the top use of Defi in South Africa. More than half of the respondents use crypto for payments, in which loans and loans come in second place with 47.6%. A third of the respondents use decentralized fairs and only 14.2% say they use stablecoins. The use, assets management and tokenization are three other popular answers.
These reactions show that the Defi sector in South Africa offers bank and transfer options for residents and at the same time serves as a tokenization channel for traditional financial players.
Respondents provided a view of the market factors in the country, referring to increasing acceptance by regular investors (62%), the rise of new Defi protocols (43%), the non -born population (33%) and the statement From crypto as financial products (29%) as the most important factors.
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In general, it is safe to say that despite the name (decentralized financing in South Africa), the report is largely aimed at describing the Defi sector in itself, so that the supervisors (the most important audience of the report) would be better Know how to deal with the growing sector.
South Africa as an important emerging crypto -hub
Sub-Saharan Africa is generally a region where the crypto sector is growing rapidly, largely because cryptocurrencies have met the unfulfilled demand for financial inclusion. South Africa, as one of the leading economies on the continent, has become one of the most important crypto -hubs in Africa.
The local crypto sector saw important changes in the 2020s, because the government implemented a series of crypto-friendly laws. The most important thing is that in October 2022 the behavioral authority for financial sector Crypto stated as a financial product, making it legal to use cryptocurrency in South Africa, although the Crypto ruling has not given a status for legal tender. In general, the favorable legal climate of South Africa has made one of the emerging crypto -hubs in the region and in the world.
Local crypto -activists are institutions regulated under the Financial Intelligence Center Act. The AML rules are mandatory for the CASPs that are active in South Africa. To control the cross-border value movement, the country has adopted a travel rule for crypto-assets. It will take effect from April 2025.
According to chain analysis, the South African cryptomarkt in 2023 was appreciated at $ 26 billion. Last year’s trends include the growing interest of institutional investors who were looking for custody solutions in the decentralized financing sector. As a result of the overall African trend of the use of crypto for daily payments, the circulation of stablecoins in South Africa in 2023 performed better than Bitcoin. The experts from the local crypto industry claim that the elections planned for May of 2025 have no influence on a friendly crypto -regulating climate.
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