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DoshFX's timing and strategy is spot on say execs

By , Portals editor
Africa , South Africa , 12 Jan 2023

Executives from DoshFX, the recently launched trading platform and JV between South African digital banking platform eZaga and global centralised exchange Digital Financial Exchange (DIFX), believe the timing of this new offering couldn’t be better - given that South Africa has the highest rate of cryptocurrency adoption in Africa.

CEO and founder of eZaga, Saud Ally, said, “South Africans and Africans are looking for easy investment processes. Rural people have an easier time adjusting to crypto trading, and eZaga has access to this market. A major effect of niche adaptation is P2P trading and community-driven programs.”

Ally added that cryptocurrency purchases have become a lot more convenient, and investors are more trusting of cryptocurrency as a result of the new regulatory framework in South Africa.

Regulation has continued to impact adoption of-and investment in cryptocurrency in several markets across Africa.

In November 2022 ITWeb Africa reported on an announcement by the Governor of the Bank of Central African States (BEAC) Abbas Mahamat Tolli calling on citizens of countries affiliated to Central African Economic and Monetary Community (CEMAC), including Cameroon, Central African Republic, Chad, Congo, Gabon and Equatorial Guinea, to avoid investing in cryptocurrencies.

Speaking after a meeting of the Central Bank’s monetary policy committee in Chad on 18 November, Tolli said cryptocurrencies are “not suitable” and have not been approved as legal tender within CEMAC.

“BEAC’s option is to tell citizens not to invest in these speculative assets because they are very risky. Bitcoin, for example, has lost more than 70% of its value since the start of 2022,” said Tolli.

Introducing risk

Anna Collard, SVP Content Strategy and Evangelist at KnowBe4 Africa, said last year that while cryptocurrency has gained traction in Africa, touted as an alluring solution to soaring interest rates and ravaged local currencies, it does introduce risk – and there are those that will find innovative ways to scam the system, con users and pilfer funds.

“People need to become familiar with the threats of social engineering as well as common scams so they can protect themselves, their digital assets, their wallets and ultimately their money. The cryptocurrency ecosystem is still very much the proverbial Wild West with criminals making immense profits off of people who are not sure of the rules. It’s essential that anyone playing in the crypto ecosystem understands the risks involved.”

In August last year, the Central African Republic’s national cryptocurrency plan or Sango Project suffered a setback after the country’s Constitutional Court judged certain aspects of the project to be unconstitutional.

On 3 July CAR President Faustin-Archange Touadéra officially launched a national cryptocurrency called Sango Coin, which he touted as the solution to facilitate the tokenisation of the country’s natural resources and attract global investors.

The crypto initiative provides for the acquisition of e-residency in CAR at the cost of US$6,000 - with the equivalent Sango Coins returned to the investor after being held for three years. It also trades CAR citizenship for US$ 60,000 worth of Sango Coin, redeemable after five years.

Last year July Nigel Green, CEO of deVere Group, acknowledged that the cryptocurrency market had gone through a rough patch and, like all risk assets including stocks, have been hit by a wave of gloomy investor sentiment based on global economic slowdown fears, inflation and geopolitical factors, amongst other issues.

“Crypto isn’t out of the woods just yet, with a maybe small and final rinse-out on its way before a considerable price bounce towards the end of the year. However, much of any potential bad news for the risk assets market, including central banks’ tightening agendas, has now already been priced-in. This means that investor sentiment and, therefore, the price should not be rocked.”

South African benchmark

DoshFX’s Ally pointed out that the South African Reserve Bank and Financial Sector Conduct Authority (FSCA) recently introduced cryptocurrency as a financial product.

Said Ally, “This is an incredible milestone for African finance and the cryptocurrency industry as a whole. This will surely be a benchmark for other African countries and will ensure such legal frameworks are in place. Central Banks in key economies are creating their own digital tokens to integrate currency through the blockchain technology.”

Gauteng-based DoshFX is touted as a first-of-its-kind multi-asset platform and comprises over 400 traditional and digital assets, which means it can be used for stock trading and market trading.

“The bank integration is also one-of-a-kind and is a direct response of the market's signalling that they would feel more secure investing in crypto if they could do so through their bank. The ultimate plan for DoshFX is to allow the end customer the capability to seamlessly trade any form of asset on one platform using their phone or computer,” Ally added.

Part of DoshFX’s game-plan is to increase access to financial services by bringing South Africa and Africa’s unbanked and sizeable informal sector into the formal financial services sector.

Ally is confident this can be done, despite the challenges of power supply, infrastructure availability and ongoing requirement for connectivity.

The partnership also allows for all existing eZaga customers to open a DoshFX account with immediate access “to a fully secure and insured custodial wallet with no additional KYC requirements.”

“Africa’s unbanked market is a very complicated market,” said Ally. “Their education around financial products and ability to achieve a bank account or trading account is unique. As a financial provider we like to look at these topics and find solutions, ultimately allowing our Fintech enablement to work with product and compliance. In this case we have solutions for issues like Network in the unbanked/informal areas.”

“Partnering with eZaga’s “Zaga Zones” (spaza shops) to onboard customers is another way of assisting the unbanked. DoshFX has made crypto purchasing simpler, not complicated as other exchanges. We find that with this method we should make an ordinary African easier to buy and sell any digital asset.”

Ally added that DoshFX has a strong partnership programme with various Fintechs in Africa. “DIFX backing this platform has a fully custodian insurance programme. This guarantees every user on DoshFX that their digital asset is secure. To achieve this insurance state DoshFX platforms must go through various security checks, thus we are confident that we like no other exchanges.”

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