Just how big is the crypto market in SA?

About R500 billion worth in transactions. That’s according to an analysis by Silver Sixpence, which has developed a blockchain diagnostic tools called LedgerCore.

The crypto market in SA ballooned to R500 billion in 2021 during the Covid lockdowns, and plateaued around that time. Of this R500 billion, about R100 billion flows into and out of the country. Between R5 billion and R10 billion a year represents a net outflow – most of it in violation of exchange controls.

What also goes unmonitored is the likely effect of this on the ZAR exchange rate, according to this article in Moneyweb.

Another trend highlighted by Silver Sixpence is South Africans’ love of stablecoins which now equal bitcoin in terms of exchange transactions.

This love of stablecoins is due to their utility for spending on tokenised assets, Web3 applications and cross-border remittances.

Crypto privacy is dead

The fact that LedgerCore can see every transaction on the blockchain means crypto privacy is dead.

“If you transact with cryptocurrency and you transact on-chain [on the blockchain], you’ve got to know that you’re not private,” says Carel de Jager, CEO of Silver Sixpence.

“I think every crypto user in South Africa has to realise this. It’s a big, big, big misnomer out there that people believe that they are actually private and anonymised when they transact with crypto. It is the exact opposite.

“It is like you’re writing your transaction on a big billboard on a highway and everyone in the world can see that you’ve transacted. So not necessarily when you buy and sell bitcoin, but remember the exchange knows that. They have your KYC documents, your ID documents, all of that. But if you do an on-chain transaction, everyone in the world knows it.

“So there is no privacy, first of all, in crypto. It doesn’t exist. And the fact is that the records never ever get destroyed.”

The scammers are still out there

“Crypto is notoriously unsafe and it’s a bit of a wild west, [and] as much as I love that, it’s also incredibly sad. My inbox is full of people that have lost crypto through theft. Some of my friends, some of my family have lost everything. So I also feel like it is our duty to use this extensive data set to the best of our ability to catch those guys and to make the crypto industry safer for all.”

With better data, exchanges and regulators will be better able to monitor and detect market manipulation and criminal transactions.