Why do South Africa brokers ask clients to deposit with something else?

Photo: Wikifx

Although the benefit from forex is associated with a large number of scams and fraudulent investment schemes, bitcoin and cryptocurrency are still popular in South Africa, which especially can be available in the forex deposit. According to Google Trends, South Africa ranks second in the world in terms of forex and bitcoin search. Here are four reasons why South Africans continue to be interested in bitcoin.

Internal and external transaction

South Africa‘s remittance market continues to grow due to the rural-urban migration and the influx of migrant workers from neighbouring countries. According to the financial reports, the country’s remittance market is expected to reach ZAR34 billion by 2023. In this case, bitcoin provides a cheaper option for the local people to send money to their relatives in remote areas of South Africa or neighbouring countries. The African general manager of Luno commented on the critical role of bitcoin and cryptocurrency payments in the country's remittance sector. A large amount of foreign currencies flows into other countries by forex trading in South Africa, and some transactions are informal due to the high and complex costs involved. Luno must reduce the costs and complexity associated with the seamless transfer of funds across the African continent.

Instability in ZAR

The South African Rand is the most volatile currency among the “major currencies”. Like other countries experiencing such volatility, bitcoin is a viable option. South African daily bitcoin transaction average volume is 90 million rands. Data shows that in October 2019, an average of 15 million reais ($1 million) was traded through the bitcoin platforms.

No strict regulation

South Africa has not yet enacted strict cryptocurrency regulations, which may weaken the enthusiasm for forex trading. Except for tax regulations and AML/KYC compliance, the country's cryptocurrency sector is not strictly regulated. However, according to the government reports, the country's authorities have planned to launch strong forex and cryptocurrency tracking method.

Reprinted from Wikifx, the copyright all reserved by the original author.