Financial institutions hold the key to unlocking crypto adoption as believed by consumers. According to one of the findings in the Visa study which gives an insight globally and to South Africans.
Visa pointed out 5 types of crypto-aware consumers based on size sampling ( Active, Curious, Passive, Unengaged, and Sceptics).
South Africa general manager at Visa, Aldo Laubscher detailed the findings in relation to South Africa indicating most active owners as interested in using Cryptocurrency in their day-to-day spending.
Passive owners are looking at it as investment and hedging strategies to grow their wealth, he pointed.
“Active owners believe banks have a role to play, but because of their acquaintance with the fintech quick-moving environment around crypto, there’s some skepticism whether the financial institutions will be capable of meeting their needs.”
Hence, he thinks financial institutions and large fintech firms in the country will have to take a look at their plans and analysis of their go-to-market strategy.
“It is clear, the South African consumer is ready and curious, and how we position that in our financial institutions alongside the payment systems in South Africa is going to be an interest to unravel”.
Above all, they’re no regulations in SA for fintech for crypto assets even though crypto assets are not prohibited.
The government is making stable progress in regulating Cryptocurrency like BTC (Bitcoin).
Last April, the South African Reserve Bank announced a group of SA financial sector regulators ( the Intergovernmental Fintech Working Group).
The group drafted the policy position documents on crypto assets.
Even though there has been no regulation on cryptocurrency in the country, local banks are closing down accounts linked with such digital currencies, citing the risks they present.
The reason for reluctance from local banks in regards to cryptocurrency adoption, Laubscher explains the fear is around the unknown, lack of clarity, and no end-to-end control.
Due to different levels of offerings by crypto (such as BTC & Ethereum), some regulation snd exchange control makes it tricky to manage.
Although you can still buy it, it is more restrictive and also not an easy process to get through.
“Banks tend to create seamless experiences for their customers, but when it is a difficult experience, understanding what the client requires tends to be slow so they can make it more efficient.”
Taking the Lead in Crypto Adoption
According to the study, South Africa is near-universal awareness and is the leading market in a global active & passive owner.
SA are knowledgeable, tech-savvy, engaging, and are key participants in the growth of cryptocurrency.
Laubscher pointed out that 44% of South Africans that participated in the study are either active or passive owners of crypto.
He added that active owners showed interest in wanting to use their crypto to send & receive money, and have it accepted as payment.
“They are very comfortable with what they have experienced as being active owners”
Financial Institution Participation
For crypto owners, the survey shows that 84% would prefer their banks offer crypto-currency and crypto-related products.
Meanwhile, the curious ones about crypto said if their banks or favorite fintech firm offers it, it will aid their trust level to engage in it.
Crypto cards and crypto rewards also came up favorable among expressed interest of those that are curious about digital currencies.
This includes crypto owners who believe it will allow them to convert and spend crypto in malls like credit or debit cards.
If a financial institution, merchant, seller, or business was to offer crypto rewards – there’s a very high interest from owners and also the curious ones.
Owners already have a sense of trust around cryptocurrencies because, for them, it’s a means of creating wealth to an extent.
For the curious ones, attached rewards to cryptocurrency might make it very likely to trust and adopt it.