Bitcoin’s Grassroots Boom in South Africa’s Townships Explained – Coincu

Each afternoon in small townships above South Africa’s Mossel Bay, surf instructors end their day not with cash in hand, but with Bitcoin in their digital wallets. In this coastal community of shacks overlooking the Indian Ocean, several initiatives have turned crypto assets into a lifeline. 

What began as an experiment during the COVID-19 pandemic has evolved into a mini Bitcoin economy, with residents in the area harnessing these new tools for survival, financial inclusion, and community building. Additionally, as global interest in crypto has increased across South Africa, Bitcoin has no longer been confined to the realm of speculation but has become about everyday needs and hope for a better future.

In this regard, several corner stores and vendors in and around the country have started accepting BTC for everything from groceries to electricity, alongside the nation’s official currency (Rand). As a result, a circular economy has taken birth, one where individuals can earn Bitcoin, spend it at local businesses, with even the children getting small rewards (in the form of BTC) for attending after-school classes in literacy and numeracy.

Moreover, in the region, where cash can be risky to hold as it is vulnerable to theft or loss, digital assets have offered up a safer alternative, with shopkeepers estimating that about 20% of their transactions are now in BTC. Not only that, to buffer the poorest users from volatility, local entities have started to accrue donations to top up a merchant’s balance if the price of BTC drops by more than 30%. 

That said, despite the market’s ups and downs, enthusiasm level across South Africa in regard to Bitcoin seem to be at an all time high, with the country being one of the continent’s leading crypto adopters.

Rethinking Prosperity from the Ground Up

The transformation underway in the African nation seems to have caught the attention of the wider crypto community, with one of the country’s leading cryptocurrency platforms, VALR, recently focusing on such stories to kick off its new podcast series on money and society. 

From the outside looking in, VALR has become a bridge for everyday South Africans to connect to the broader digital asset ecosystem, providing its million strong client base with an accessible on-ramp to cryptocurrencies — thus allowing them to easily convert their Rand holdings to Bitcoin alongside a host of other digital coins, and vice versa.

This mission recently became abundantly evident as part of the exchange’s first podcast episode called “Unfiltered: Money, Meaning and Society,” featuring Bitcoin Ekasi’s founder, Hermann Vivier, and VALR CMO, Ben Caselin.

As part of the hour-long discussion, the two explored why local projects seem to be offering the masses much more than access to digital money, providing them with a level of dignity and fairness that was previously unavailable to them. Moreover, they spoke about money, and how, at its core, it is deeply psychological — as long before coins and banknotes existed, humans traded favors and credits based on trust and an innate sense of fairness.

Furthermore, the podcast delved into the evolution of money with Caselin and Vivier reflecting on how, over the past half-century, the world has moved from gold-backed currencies to pure fiat money (not due to some evil plan, but as a historical necessity during society’s growth).

Yet this evolution seems to have come at a cost wherein the devaluation of money and erosion of trust have fueled the feeling of injustice for many ordinary people. In this broader context, Bitcoin’s rising popularity, even in poor communities, seems to have ushered in a craving for a neutral, decentralized form of wealth that no government or big bank can manipulate. 

Within South Africa, particularly, this has translated to a newfound sense of autonomy such that with a smartphone and a Bitcoin wallet, a person who had long been excluded from many financial opportunities can suddenly participate in a global economy on their terms. On the subject, Caselin further noted: 

“There’s a lot of confusion and disconnect in society today… but I truly believe the times we live in offer an opportunity for awakening, showing us a different, more just way forward”

What Lies Ahead?

From the outside looking in, VALR’s Caselin believes that real prosperity (in the long run) requires aligning tools like Bitcoin with timeless human values like kindness, resilience, and respect, highlighting that concepts like decentralization and free speech can only fulfill their promise if wielded alongside a strong sense of compassion and responsibility. Thus, it will be interesting to see how things continue to shape up for underserved communities across the African continent from here on out!