Buy Bitcoin in South Africa

The State of Bitcoin in South Africa

• Country Ranking: South Africa is second in interest in Bitcoin according to Google Trends, following Nigeria.
• Reason for Popularity: Economic uncertainty and political tensions have made Bitcoin a popular alternative investment in South Africa.
• Origins of Interest: The rise in Bitcoin trading can be traced back to March 2017, linked to political and economic instability.
• Regulation and Value Fluctuation: In 2018, Bitcoin trading likely faced challenges due to government regulations and fluctuating Bitcoin value.

South Africa's heightened interest in Bitcoin is closely related to the nation's economic and political climate. The residents, in the wake of uncertainties and turmoil, like the events following the arrest of former President Jacob Zuma in July 2021, have been exploring alternative investment options.

Bitcoin emerged as a potential safeguard against economic instability in March 2017, when a controversial change in the finance minister's position coincided with the S&P's downgrade of the country's local currency debt to junk status, driving a steep increase in Bitcoin trading.

The Regulatory Environment

• Regulatory Environment: South Africa has a favorable regulatory environment for Bitcoin, classified not as a "currency" but as "crypto assets" by the Reserve Bank.
• Regulatory Document: SARB released a "Consultation Paper on Policy Proposals for Crypto Assets" in January 2019, suggesting guidelines and recommendations for digital currencies.
• Business Registration: Cryptocurrency-related businesses are recommended to register with the Financial Intelligence Centre to manage risk-related factors and potentially increase adoption.
• Fragmentation Concerns: The SARB has concerns that digital currencies like Bitcoin could fragment the monetary system of the country by impacting money demand and supply.
• Addressing Risks: The unregulated nature of cryptocurrencies could lead to potential scams; hence, SARB plans measures against financial terrorism and money laundering.
• Progressive Approach: South Africa intends to move cautiously but progressively in regulating cryptocurrencies, potentially boosting Bitcoin adoption by instilling confidence in potential buyers.

Buying and Using Bitcoin in South Africa

• Purchasing Platforms: Numerous exchanges are available for buying Bitcoin in South Africa, such as Luno, Coinmama, CoinCorner, and Bitit.
• Wallet Requirement: Buyers need a wallet to store Bitcoin; a guide can be consulted for the best Bitcoin and cryptocurrency wallets.
• Exchange Pros and Cons: Each exchange has its benefits and drawbacks; e.g., Luno offers instant buys, free deposits, and high limits, but users are advised against storing Bitcoin in the Luno wallet due to potential security flaws.
• ATM Option: Bitcoin can also be bought from ATMs in South Africa, offering quick and easy transactions without lengthy sign-ups and verifications, but with high transaction fees between 5% and 10%.
• Merchant Acceptance: Many merchants, including Applebee and BLVD Boutique, accept Bitcoin in South Africa.
• Government Stance: The government's positive and proactive approach is conducive to the flourishing of Bitcoin in South Africa.

Bitcoin & Cryptocurrency Trading in South Africa

South Africa's economy is the third largest in Africa. Of all the countries on the African continent, South Africa has the most diversified economy, with heavy industrialization and a large tech sector.

According to the South African reserve bank, the country's financial regulator, the state has experienced "an exponential increase in the provision and use of crypto assets", thus it published a "draft declaration of crypto assets as a financial product".

This declaration contains a set of rules that must be obeyed by crypto-exchanges, advisers and brokers authorised under the FAIS Act. However, the removal of grey area around the regulation of crypto has meant that many exchanges have opened up their doors to South African investors.

In November 2022, lawmakers added crypto businesses to the country's list of accountable institutions. This means that exchanges will have to identify and define new and existing clients while also keeping records of their identity. The amendment was made to the Financial Intelligence Act of 2001 and will take affect on December 19, 2022. This will not effect individuals that use the exchanges listed above since most already have these measures in place.

One of the easiest ways to buy Bitcoin in South Africa is through the cryptocurrency exchanges outlined above. There are several exchanges offering Bitcoin in South Africa, allowing you to select one based on your requirements and preferences using our guide. Different exchanges have different transaction fees, withdrawal limits, payment modes, and verification processes that need to be kept in mind before users select one.

Additionally, Bitcoin buyers need to keep in mind that certain exchanges might require you to get a wallet of your own before being able to buy the digital currency. Even if there is no requirement, it is recommended to have a wallet of your own for security reasons (preferably a hardware wallet).

Another way to buy Bitcoins in South Africa is through automated teller machines (ATMs). These ATMs allow users to instantly purchase the cryptocurrency using cash, and most of them only require a telephone number for verification, so long as you aren't buying a lot of Bitcoin. You can locate Bitcoin ATMs in South Africa using our Bitcoin ATM Map.

Exchange Hacks and Crypto Scams in South Africa

BTC Global

A cryptocurrency investment firm named BTC Global was the focus of a fraud case with losses exceeding $80 million.

BTC Global agents encouraged people to invest, with the promise to earn 2% interest per day, 14% per week and 50% in a month.

Some of the investors managed to get payed, but ultimately, like all ponzi schemes the payments eventually just stopped. That's because, in the case of BTC Global and other Ponzi schemes, initial investors are paid out of new investor funds.