Popular cryptocurrency exchange Bittrex has recently led a $1.5 million seed funding round in a South African cryptocurrency exchange called VALR over the “tremendous untapped potential” the company sees in the country.
According to CoinDesk, Bittrex CEO Bill Shihara believe the South African market still has a lot of potential. Investor Michael Jordaan of Montegray Capital seemingly agrees, as he believes VALR’s support for 50 cryptocurrencies will be the most diverse offering in the continent.
He was quoted as saying:
The VALR team has the potential to change the cryptocurrency landscape in South Africa and globally.
The CEO of the South African trading platform, Farzam Ehsani, told the news outlet that it already has 1,500 users signed up, and that a backend partnership it has with Bittrex is set to offer it liquidity and competitive prices for crypto-to-crypto trading.
VALR itself is set to work on getting fiat on-ramps with South African banks during the summer, to give its users a change of buying cryptocurrencies with the South African rand. Ehsani claimed local residents “want their hands on a store of value that doesn’t depreciate the way the rand has.”
Companies are not allowed to go and buy [large amounts of] crypto from offshore markets. This makes it very difficult for crypto exchanges in South Africa to access liquidity from international market
The country’s fiat currency has notably lost half of its value over the last ten years, and capital control stop citizens from transacting across border over certain amounts. These factors have seen seeing South Africans turn to cryptocurrencies, which often trade at a premium in the country.
Marius Reitz, manager at South African bitcoin exchange Luno, told the news outlet that its user base notably grew to over 2 million earlier this year. The platform is notably looking to expand to 20 new countries in the continent this year.
Ehsani himself noted that VALR’s reach goes beyond South Africa, as its know-your-customer (KYC) checks accommodate traders from “most countries.” The CEO sees remittance payments as a potential use case for cryptocurrencies in the region, as remittance services in the country are expensive.
The South African government has looked into cryptocurrencies in the past. The South African Reserve Bank has, in fact, recently published a paper on prioritizing cryptocurrency regulations.