Africa crypto exchange sets sights on US

● Africa’s largest cryptocurrency exchange, Luno, is looking for a foothold in the US, the latest international platform to try to tap one of the world’s biggest populations of digital asset investors.

Owned by conglomerate Digital Currency Group (DCG), Luno is assessing regulatory regimes in all 50 US states to allow for its rollout in the course of the year, said Marius Reitz, its general manager for Africa.

“It is more complex than launching in an individual market because of the different states and different regulations within each of these states,” Reitz said. “But it is a company focus for us for 2022.”

A number of fast-growing cryptocurrency exchange brands — such as FTX and binance — have been moving into the US market. The world’s biggest economy is home to more than half the world’s crypto unicorns, according to CB Insights.

A unicorn is a start-up that has achieved a valuation of at least $1bn (about R15bn).

Founded in 2013, Luno has 9-million users from Asia to Africa. It offers trading in tokens including bitcoin, ethereum and ripple, and could soon add new coins chosen from the world’s 10 most liquid cryptocurrencies, Reitz said. “A lot of the operation time goes into security and custody” when choosing a coin, he said.

DCG was the earliest investor in Luno and acquired it entirely in 2020. Luno’s other early backers include Naspers.

The spread of cryptocurrencies in Africa has so far centred on Nigeria and SA, where nearly a fifth of the population own some form of digital assets. That compares with the global average of just over 10%.

In SA, Luno is awaiting regulations that Reitz says are “imminent” and will likely boost consumer protection. The changes should allow platforms including Luno to pull in institutional investors.

The rules could also make possible the listing of more sophisticated products. Reitz said he expects offerings such as cryptocurrency exchange-traded funds, allowing investors to hold a basket of coins without having to buy them.

“We have got all these asset managers sitting on the sidelines wanting to launch their own crypto products, but they’re not able to do so,” Reitz said. “As soon as we see regulation, you’ll see a flurry of crypto products being offered to investors in South Africa.”