At the southern tip of Africa lies a multicultural country with thriving creativity, natural resources, and sunny weather. However, the South African economy and the strength of its currency, the rand, continues to disappoint. If you’re looking for an escape hatch from the weakening rand, rising inflation rates, and the economic uncertainty in South Africa, then buying Bitcoin with Coinmama could be for you!
Cry The Beloved Country
Once the largest economy in Africa, a combination of political mismanagement and sectarian tension have pushed South Africa off its perch in recent years. The largest gold-producing country as recently as 2006 has now fallen behind Nigeria in terms of national GDP. In the same time frame, the South African rand has lost over half its value against the US Dollar.
Any hopes that South Africa will turn a corner economically will be met with steep resistance. Challenges facing the country include a low credit rating, a large rural population yet to be lifted out of poverty, high crime rates, and the looming risk of an upcoming Expropriation Bill. A flagship of South Africa’s land reform policy, the Bill, if passed, will allow the government to seize property from the white minority to redistribute it amongst the previously disadvantaged class. Naturally, the country’s business sector is worried that such a bill could make South Africa less attractive to foreign investors, further hampering its struggling economy.
Despite its challenges, South Africa is home to talented individuals and a thriving business community searching for a hedge against the risk of inflation and currency loss. Set against the backdrop of fiscal uncertainty, investor appetite for Bitcoin and crypto assets is growing in South Africa.
Is Bitcoin Legal In South Africa?
South African regulation started paying attention to crypto assets in 2014 when the National Treasury and other financial institutions issued a statement warning people about the supposed dangers of crypto assets. According to the report, “virtual currencies cannot be classified as legal tender, nor are they defined as securities in terms of the Financial Markets Act. Later that year, the South African Reserve Bank (SARB) strengthened the case for caution in a position paper that laid out the various challenges facing cryptocurrencies. To this day, the SARB considers the paper relevant.
In 2018 it was the turn of the South African Revenue Service (SARS) to publish a paper clarifying the tax status of cryptocurrencies. In the same year, the Minister of Finance put forward a bill that recognizes cryptocurrencies as ‘financial instruments’ for taxation purposes.
Fast forward to 2021, and South Africans are being urged to work together with SARS as the tax body ramps up tax collection from crypto holders.
Bitcoin Arbitrage Opportunities Abound
One of the laws impacting Bitcoin in South Africa is the exchange controls limiting the offshore transfer of wealth. South African citizens can transfer up to R1 million, or approximately $70,000 a year overseas, and extend that limit up to R10 million through a special clearance required by SARS. Foreign exchange controls apply to crypto assets and contribute to the inefficient Bitcoin markets in South Africa. While demand for a hedge against the rand remains high, supply is affected by exchange controls, resulting in a Bitcoin price that is generally higher in South Africa when compared with western markets.
The constant discrepancy between the Bitcoin price in South Africa and the western market has created an arbitrage opportunity that doesn’t seem to be going away soon. According to Jonathan Ovadia, CEO of crypto fund Ovex, “as long as the crypto market is growing, there will be an arb. While the arb will get smaller as more people do it, I think it will be around as long as exchange control is around.”
Buying Bitcoin in South Africa
If you’re looking to hedge against the geopolitical risks in South Africa and diversify away from rands, Coinmama could be the place for you. Whether you prefer using debit cards, credit cards, bank accounts, Google Pay, or Apple Pay, Coinmama makes it easy to get involved in crypto. Just follow these few simple steps to become the proud owner of some bitcoin:
Step 1 – Register with Coinmama
- If you’ve already registered, you can sign in by clicking on the “Log In” button and using your existing login details (or click here).
- Don’t have an account yet? Select the light blue “Sign Up” tab at the top right of the main menu (or click here).
- Input your details and look for an email from Coinmama asking you to confirm your account.
- Click the link on the Coinmama email. Congrats, you’ve completed the registration process.
** Note: for more information on how to create an account with us, click here.
Step 2 – Get Verified
Once you’ve registered, the next step is to verify your identity, allowing you to purchase bitcoin (BTC).
To get verified, you’ll first need to upload your ID or passport, plus various other documents depending on which level of verification you wish to reach. If all is well, you should be verified in a few minutes during working hours or as soon as we’re back at our desks. We’ll let you know if we have follow-up questions about your documents.
Once your account is verified, you’re ready to buy Bitcoin!
**Note: for further help with account verification, please click here.
Step 3: Get BTC!
- Once signed in and verified, click the “Buy” button and select “Bitcoin.” Next, choose the amount of Bitcoin you want to buy.
- Enter your Bitcoin wallet address. Your Bitcoin wallet address is the address to which we will send your coins. For more information on Bitcoin wallet addresses, click here. Once you’ve supplied your wallet address, click the “Go to Payment” button.
- Choose whether you want to pay with a credit card, debit card, bank transfer, Apple Pay, or Google Pay. Note: Only Mastercard and Visa credit cards are accepted. Wire transfers usually take 1-2 business days to process.
- Enter your payment details and click the “Buy” button.
You’re now a proud Bitcoin owner! It takes approximately 10 minutes for the Bitcoin transaction to be broadcasted from Coinmama’s wallet to the Bitcoin address you supplied, so please wait. Also, during times of high activity, your transaction may take longer than expected.
Get Bitcoin in South Africa!
A country with a vibrant business sector and a struggling currency, South Africa is the perfect space for Bitcoin to showcase its value proposition as an inflation-resistant store of value. If you’re looking to hedge against the risk of further credit downgrades and currency losses, now is the time to get yourself some Bitcoin!