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Cape Town fintech launches crypto-rand hybrid
South African fintech NeoNomad is tackling financial exclusion head-on with a new hybrid exchange platform that aims to bring cryptocurrency benefits to the country’s unbanked population.
At the heart of NeoNomad’s offering is ZARcoin (ZARC), a stablecoin pegged 1:1 to the South African rand. Launched on 11 July, this digital currency seeks to bridge the gap between traditional and crypto finance, facilitating seamless transactions both domestically and across borders.
NeoNomad CEO Hanres Beukes explains the rationale: “We’re creating a growing financial ecosystem that overcomes challenges like infrastructure and transport to help people take ownership of their finances and encourage economic participation.”
The platform utilises Solana Pay, a blockchain-based payment system, enabling instant, low-cost transactions. Users can make crypto payments for point-of-sale purchases via QR code scanning, with fees approaching zero. This technology targets both banked and unbanked South Africans, potentially expanding financial access across the economic spectrum.
By focusing on Decentralised Finance (DeFi), NeoNomad challenges traditional banking models. The startup aims to reduce fees and enable peer-to-peer transactions without intermediaries, a proposition that could resonate in a country where banking costs remain a contentious issue.
Devon Krantz, COO of NeoNomad, outlines the company’s ambitions: “This app enables a suite of offerings across a broad network and the Decentralised Finance space. It’s designed to transition users from traditional banking into our secure stablecoin ecosystem and to be part of a transformative African fintech platform that contributes to a growing digital continent.”
However, cryptocurrency adoption in South Africa faces significant hurdles. Despite high awareness, actual usage remains low, primarily due to a lack of understanding and trust. NeoNomad plans to address this through its NomadLearn educational programme and the upcoming launch of DecentraLounge, a Cape Town-based coworking space for crypto enthusiasts, in Q4 2024.
The timing of NeoNomad’s launch is significant. South Africa’s Financial Sector Conduct Authority (FSCA) recently approved 138 crypto asset service provider licences, signalling a more accommodating regulatory environment for fintech innovations.
As Africa’s first hybrid exchange platform, NeoNomad’s project marks a notable attempt to integrate blockchain technology into everyday financial transactions. However, success will hinge on building trust, ensuring robust security, and effectively educating potential users about digital currencies’ benefits and risks.
While the potential for increased financial inclusion is evident, the platform must navigate complex regulations and overcome entrenched financial behaviours to achieve widespread adoption. As South Africa’s fintech landscape evolves, NeoNomad’s progress will be closely monitored to see if it can deliver on its promise of a more inclusive financial ecosystem.
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