While Africa is often seen as a crupt adoption, the continent, the largest economy on South Africa, is one of the leading countries of the region in terms of adoption and regulation. The new report published by the local financial regulator highlights bright possibilities for the South African DEFI region.
Goal of study
On February 20, 2025, Financial Sector Conduct Authority Issued A study called Market Study on decentralized finance (Defi) in South Africa. The study is based on a survey of Crypto asset service providers and aims to help local regulators to better understand the role of DEFI in South Africa.
This time is important because South Africa has become one of the major countries of the world in the DEFI region in the 2020s. Since the region is already shaping the economic approach of the country, it is in clear regulation demand, especially when it comes to the relationship between banks and Crypto Asset Service Providers.
According to the study, the estimated annual revenue of the South African DEFI region is $ 2.8 million. The main players in the market are retail customers (71%), followed by small and medium -sized enterprises. The major factors behind the development of the field identified in the study are financial inclusion facilitated by DEFI, low transaction costs and transparency.
The increasing importance of the DEFI sector in the local economy brings new risk. The study indicates the study, citing the study as manipulation, safety violations of smart contracts, potential platform failures, and decentralized finance in the form of decentralized finance, the study indicates them. The risks mentioned in the study include detention risk, oracal risk, liquidity risk and many more. Studies show that regulations should factor these risks to ensure users’ safety.
Replyers believe that the main methods of safety of users are related to better regulation and educational efforts, aims to increase the financial literacy of the residents.
Number
More than a third of respondents believe that the South African DEFI sector TVL is more than $ 27 million, which is not a very large part of the global clan, but is still important in the region. In addition, it is growing rapidly. The overall Defense market in South Africa is expected to reach $ 180 million by 2028.
The study reveals cases of top use for DEFI in South Africa. More than half of the respondents use crypto for payment, lending and lending to another place at 47.6%. One -third of the respondents uses decentralized exchanges, and only 14.2% states that they use stabechoin. Stacking, asset management and tokennaration are three other popular reactions.
These reactions suggest that the DEFI sector in South Africa is providing banking and dispatch opportunities for residents serving as a token channel for traditional finance players.
Replyers provided an approach to market drivers in the country, growing up to mainstream investors (62%), emergence of new DEFI protocol (43%), AnbumD population (33%), and crypto announcement in the form of financial products with citing a reference. (29%) as the main factors.
In general, it is safe to say that despite the name (decentralized finance in South Africa), the report is largely focused on describing the DEFI sector so that the regulators (the chief audiences of the report) know better how to deal with the growing. Sector.
South Africa as an important newborn crypto hub
Sub-Sahara Africa, in general, is an area where the crypto region is growing rapidly, on a large scale because Cryptocurrency has met incomplete demand for financial inclusion. South Africa has become one of the most important crypto hubs in Africa, as one of the leading economies on the continent.
The local Crypto region saw significant changes in the 2020s as the government implemented a series of crypto-friendly laws. Most importantly, in October 2022, the Financial Sector Conduct Authority declared Crypto a financial product, making it legal to use Cryptocurrency in South Africa, although the ruling did not provide legal tender status to Crypto. In general, favorable legal climate has made South Africa one of the newborn Crypto Hub in the region and also in the world.
Local Crypto Asset Service Providers are regulated institutions under the Financial Intelligence Center Act. AML rules are mandatory for CASPS operated in South Africa. To control the cross -border movement, the country adopted Traveling rules For crypto property. This will be applicable from April 2025.
As ChennanalisThe South African Crypto market was priced at $ 26 billion in 2023. Last year’s trends included increasing interest from institutional investors seeking detention solutions in the decentralized finance sector. The prevalence of Stabecrims in South Africa in 2023 improved bitcoins, reflecting the overall African trend of using crypto for everyday payment. Experts at the local crypto industry claim that the election for May 2025 will not affect a friendly crypto regulatory climate.
