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There’s a tectonic shift happening with bitcoin behind the scenes in South Africa. Entities that you might not expect are starting to embrace it, including the JSE, Eskom and companies that are beginning to notice the long-term progression of the rand.
Looking five or 10 years into the future, who can honestly say the rand will hold its value? The historical evidence suggests it probably won’t, which is why some company executives are starting to see bitcoin as a route out of this trap of value erosion.
Tech entrepreneur Stafford Masie has been banging on the doors of corporate South Africa about the potential of using bitcoin reserves to take zombie companies and make them interplanetary. Carel de Jager, founder of crypto company Silver Sixpence, has done more than anyone to convince Eskom that it can get rid of its debt by using surplus power to mine bitcoin.
They both join us now to talk about these tectonic shifts.
Masie and De Jager have been explaining to regulators, legislators and company executives the key difference between bitcoin and crypto.
“One (bitcoin) is a digital commodity,” says Masie.
… There’s nothing like it. Everything else is a copy of it. Solano, Cardano, Ethereum – those are all good. But there’s only one true digital commodity and that’s bitcoin.
“Once you separate them out, then you can start looking at this industry through a legislative lens correctly. So that requires education, and … sitting down and saying you cannot just have crypto legislation in South Africa. You’ve got to have bitcoin, digital commodity legislation, and then you’ve got to deal with the other things which are centralised. They’re securities. They’re not regulated today. Whereas bitcoin is like gold.”
The only company on the JSE with a bitcoin reserve is Altvest Capital, which plans to expand this to a $10 million reserve over time, emulating MicroStrategy in the US, which has multiplied its stock price more than 12X over the last five years since adopting its own, aggressive, bitcoin strategy.
The explosion in stablecoin adoption in recent months – backed by the US Genius Act which sets out what level of collateral is required – forms a crucial pillar of Donald Trump’s economic framework. The promised cuts in spending have not materialised, and Chinese holders of US debt are winding down, so the only way out for his administration is growth.
“They’re going all in on growth, and they believe things like artificial intelligence will give them the productivity levels [they need]. And if they loosen some of the regulatory requirements over the industries, broadly speaking, this will accelerate economic activity and investment,” says Masie.
Banks are now entering the crypto space in a massive way: first by custodying digital assets and then by issuing stablecoins of their own.
Carel de Jager says Sixpence ran some analytics and found that more than half the crypto volumes crossing the border are stablecoins.
“You have to ask yourself, so why is that? Why would someone prefer to use a stablecoin and not bitcoin? And there’s many reasons for that. One is obviously payment. There’s a lot of actual utility.
“It’s also very easy to get your assets in and out of the country [with stablecoins].”
The existing fiat system using banks and SWIFT is broken, adds Masie. It can take two weeks to send funds to a supplier in Pakistan versus minutes with stablecoins – and the costs are lower.
He said Bitcoin will win this race because it is the most perfect form of money developed in the modern era, and its growth is highly correlated to M2 money supply expansion.