Interest in bitcoin is continuing to grow in South Africa as a result of the country’s ongoing currency troubles.

Emerging markets have taken a beating in recent months. Panicked by a mixture of political instability, the strong U.S. dollar and deepening trade war fears, investors are jumping ship. Argentina’s peso, Turkey’s lira, and Indonesia’s rupiah have all hit new lows, and now it is beginning to look like South Africa may be heading into a downward spiral, as well.

On Tuesday it was revealed South Africa’s GDP declined for the second quarter, confirming what many already believed to be true: South Africa was heading into recession territory. The news sparked a sell-off, but the currency has recovered slightly since, though the rand is not out of the wood just yet.

James Edwards, Forex Director for Sable International, explained, “The Rand has a liquid market that seems to act as a proxy for EM [emerging market] weakness, manifested by Bond and equity sell-offs, resulting in weakness due to liquidity and demand issues.”

By no means are South Africa’s economic troubles comparable to what is happening in Argentina or Turkey, but the country does seem to be following a similar trend in the world of cryptocurrencies.

South Africa leads the world in bitcoin searches

Google Trends is often used as a simple ‘sentiment index’ to either predict the value or at least evaluate a rise or fall in marketplaces. It’s a useful tool, but by no means the only indicator to buy or sell.

That said, South Africa is the world leader in bitcoin searches so far in 2018.

South Africa

Source: Google Trends

Interest in bitcoin is continuing to grow in South Africa as a result of the country’s ongoing currency troubles. Not only do cryptocurrencies provide a viable use case for remittance services and the underbanked, they offer some a new way to make money.

Even the country’s President, Cyril Ramaphosa, has gotten behind the craze. Following the meeting of the African Union in Rwanda, Ramaphosa made a bold suggestion: A single currency for Africa.

He explained: “We will begin to interface with the idea and notion of a single currency, possibly even a digital currency, and it’s possible that a digital currency will precede a real single currency because it is easier than having a proper full currency.”

Though Ramaphosa did not specify a plan nor a timeline for the idea, he did express some optimism about the possibilities. “It may take time, it may take years, but it’s interesting that something that we never spoke about in the past, we are now talking about. Because people always had a sense of sovereignty around their own currency, feeling that their currency is about their sovereignty, their nationhood, but people are now thinking beyond the borders of their own nation.”

From startups to investment schemes and everything in between, the country is diving in head first into the crypto-space. But not without some stumbles along the way.

The $50 million Ponzi Scheme

Faith in the crypto-boom was tested in March after allegations were made that BTC Global had scammed tens of thousands in a bitcoin investment scheme.

The company promised returns of up to 50 percent thanks to the supposed expertise of an investment guru who, as it turns out, didn’t exist.

“Investors were told that BTC Global was the marketing arm of Steven Twain, a binary, forex and commodities trader, whose access to the latest cutting-edge trading tools and his ‘extensive experience’ meant he was able to ‘win in a market that crushes most newcomers’,” according to a report from IOL.

Mike Bolhuis, a private investigator in the case, noted: “If one would search for any evidence of someone called Steven Twain being in charge of BTC Global, you would never find that person. What you would find is a character called by that name. BTC Global has no ownership details.”

With over 28,000 allegations against the company and over a billion rand missing, South African police launched an investigation into the incident, but to date, no funds have been returned and ‘Steven Twain’ is still missing in action.

Despite this high-profile setback, however, many South Africans have not been dissuaded from engaging with crypto.

The future of crypto in South Africa

One notable project currently captivating investor interest in South Africa is a new cryptocurrency named SAFECOIN. Launched in August and created by FHM Ltd., the project markets itself as an investment vehicle for Africans involved in the online trading community, suggesting that Africans frequently miss out on ground floor investment opportunities.

Neil Ferreira, director and co-founder at FHM explains, “With SAFCOIN, we hope to educate more people about the benefits of cryptocurrency and help them understand how and where to trade, so that they can be part of the global digital currency revolution and Africa’s cryptocurrency history.”

According to FHM, over 400 e-commerce merchants have already agreed to accept the cryptocurrency, and more are on the way.

Currently, the coin is only available to South Africans, but FHM plans to release it to a wider African market in October.

FHM’s plan echoes Ramaphosa’s pro-African digital currency sentiment, but only time will tell if it will win the hearts and wallets of the continent’s consumers.

Picture By Evan Bench/Wikimedia Commons - Johannesburg, CC BY 2.0,.

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Texan living in Mexico, new tech enthusiast, decentralization fan, cryptocurrency enthusiast, geopolitical junkie, digi-explorer, and music lover. I believe that we are on the cusp of a new frontier in how we will view the government, money and energy. Let’s be a part of it, together.

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