<\/p>\n
You can also listen to this podcast on iono.fm\u00a0here.<\/p>\n
There are now several ZAR stablecoins \u2013 ZARP, ZAR Supercoin, and now Zaru, which is backed by Sanlam, Luno, EasyEquities, Standard Bank and Lesaka Technologies.<\/p>\n
Absa is also piloting a ZAR stablecoin of its own, indicating the scale at which these digital coins are about to hit the market.<\/p>\n
But what\u2019s the purpose? Is there something wrong with the fiat version of the rand? It turns out there is.<\/p>\n
It\u2019s tied to the banking system, making it slow and costly to move.<\/p>\n
The new Zaru stablecoin offers instant, 24\/7, low-cost settlements and transactions on the Solana blockchain, by-passing the limitations of traditional banking systems like operating hours, clearing delays, and high fees.<\/p>\n
It also allows cross-border payments within SA\u2019s regulated financial system, while providing the assurance that Zaru tokens are fully backed 1:1 by high-quality rand-denominated assets including cash, bank deposits and government bonds.<\/p>\n
Listen\/read:
Absa\u2019s bold leap into stablecoins
Africa\u2019s next payments leap: Stablecoins on every corner
Bitcoin ventures into extreme fear territory \u2013 and that\u2019s not a bad thing<\/p>\n
While the involvement of Sanlam and EasyEquities suggests it is aimed at the investor class, the potential user base goes much further than this, explains Langelihle Nkabinde, head of compliance at Purple Group, the parent company of EasyEquities.<\/p>\n
\u201cIn South Africa, we still have an informal market economy. One of the reasons we have this [Zaru stablecoin] is because people look to be able to move cash quickly, simply, efficiently, without incurring costs.<\/p>\n
\u201cMost South Africans tend to not think about this friction as far as the informal market is concerned. So whenever you make a deposit or withdrawal into an EasyEquities account, you have to wait. But with Zaru, this becomes instant. So you don\u2019t have to wait for you to be able to access your funds.\u201d<\/p>\n
This has the potential to benefit not just investors, but also companies and individuals sending remittances abroad.<\/p>\n
Stablecoins are no longer a niche experiment, says Nkabinde, but a real-world use of new technology to solve a long-standing problem within the banking system.<\/p>\n
Zaru has some powerful backers in SA, with Standard Bank providing custody of the assets, Luno handling the issuance and trading access, and EasyEquities taking care of distribution and access \u2013 including for institutional investors. Monthly audits of the underlying assets will be conducted by Moore Johannesburg.<\/p>\n
Nkabinde believes SA is entering an era in which stablecoins \u2013 including competing ones \u2013 will account for huge volumes of transfers across the economy and across borders.<\/p>\n
Grey list threats \u2013 are they still here?<\/p>\n
South Africa has been removed from the Financial Action Task Force (FATF) grey list, but does that mean that we\u2019re over the hump when it comes to anti-money laundering and terrorism financing?<\/p>\n
Not quite.<\/p>\n
There are new dangers that are posing problems for exchanges in the form of highly sophisticated fraud schemes. Artificial intelligence (AI), in particular, has been an exceptional gift to fraudsters because of its ability to impersonate and steal someone\u2019s identity.<\/p>\n
Listen\/read:
Will stablecoins one day rule the world?
NYSE-listed Super Group issues first bank-backed ZAR stablecoin<\/p>\n
Nkabinde points out that there are now voice-mimicking tools that make it sound as though you are speaking to the account holder themselves. And, of course, crypto remains a popular means for executing fraudulent schemes.<\/p>\n
AI is progressing at such a speed that exchanges around the world must match its speed and energy to stay on top of these new ways of defrauding people.<\/p>\n
SA may have been removed from the FATF grey list, but that does not mean the threats of money laundering or terrorism financing have subsided.<\/p>\n
Nkabinde mentions one case where an investigator was talking to the supposed owner of a trading account, and the voice \u2013 filtered through an AI voice-mimicking tool \u2013 sounded completely authentic.<\/p>\n
\u201cIn this case, we [conducted] extra due diligence and spoke to the account holder\u2019s accountant \u2013 who informed us that the attempted transaction was fake.\u201d<\/p>\n
Listen\/read:
New rand-backed stablecoin launched
Don\u2019t put your head in the sand: Stablecoin adoption is not going away
Stablecoins are gaining ground as digital currency in Africa<\/p>\n
This explains why the job of compliance officers has become more challenging, and requires greater effort and agility (including AI tools) to halt the fraudsters in their tracks.<\/p>\n
\u201cI think one of the features that has been highly appreciated by victims of fraud is that we\u2019re able to secure funds that have migrated from a victim\u2019s bank account, which is outside of our environment, and then into our environment.<\/p>\n
\u201cWe\u2019re able to secure those funds and then repatriate them. I think that has been one of the really, really very useful controls that we have in place,\u201d adds Nkabinde.<\/p>\n
EasyEquities has about 2.6 million customers, of whom approximately 1.1 million are active. It offers cryptocurrency investment through \u2018EasyCrypto\u2019, a platform that allows users to buy, hold and sell crypto assets using specialised \u2018EasyCrypto Tokens\u2019.<\/p>\n
These tokens, such as the EC10 and ECA20, provide diversified exposure to multiple cryptocurrencies in a single, regulated instrument rather than requiring users to purchase individual coins.<\/p>\n
For previous Moneyweb Crypto Pod episodes,\u00a0click\u00a0here.<\/p>\n
You can also sign up for our\u00a0crypto newsletter.<\/p>\n
#ZAR #stablecoin<\/p>\n","protected":false},"excerpt":{"rendered":"
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