Crypto asset service providers argue that South African regulators should take inspiration from the U.S. and allow pension funds to invest in crypto assets.
According to Farzam Ehsani, the CEO of South African crypto exchange, VALR, since South Africa’s National Treasury officially barred pension funds from investing in crypto assets, the market value of crypto assets has surged by 325%, with Bitcoin (BTC) specifically experiencing a 480% increase.
“Let 2025 be the year that Regulation 28 changes to give pension funds the option of including crypto assets. South Africans deserve nothing less,” added Ehsani who is CEO of Africa’s leading crypto exchange, VALR.
The point is echoed by Marius Reitz, General Manager for Africa at Luno.
“While cryptocurrencies are currently excluded from the asset classes permitted to be held in collective investment schemes, a shift to a more permissive environment, in line with global financial market leaders like the U.S and U.K, could catalyse increased institutional participation and further boost investor protection.”
In January 2023, Regulation 28 was updated to permit pension funds to allocate more to specific asset categories, including offshore investments (capped at 45%), infrastructure (45%), hedge funds (10%), and private equity (15%).
However, as reported by BitKE back in 2021, crypto assets were explicitly excluded.
“The excessive volatility and unregulated nature of crypto assets require a prudent approach, as recent market volatility in such assets demonstrates,” noted Treasury at the time.
Liberate Financial instruments, give freedom.
Countries still fearful of #Crypto. Wont be long. “Pension Funds Cannot Invest in Cryptocurrencies, Says South African Treasury” BitCoinKE.
— CryptoSmind (@SmindCrypto) November 6, 2021
However, with the approval of 248 crypto platforms by the South African Financial Sector Conduct Authority (FSCA) in 2024, stakeholders argue that local pension funds represent a big opportunity to boost the crypto economy.
REGULATION | South Africa Has Now Approved 248 Crypto Providers Out of 420 Received So Far, Only 9 Applications Rejected
This post identifies two key areas that resulted from applications getting rejected by the FSCA.https://t.co/9osgvhErjt @fscasouthafrica pic.twitter.com/2fvVgBZoty
— BitKE (@BitcoinKE) December 16, 2024
According to Reitz, due to the large scale of South Africa’s institutional and pension fund assets, permitting the inclusion of cryptocurrencies in these schemes would likely trigger a significant increase in demand for cryptos from these entities.
“Luno’s position as a regulated entity and its custody and liquidity products for institutions give it a strong foundation to support this next phase of crypto’s evolution.
The company has built its reputation on operating within a compliant framework and ensuring the security of customers’ crypto assets.”
Frank Leonette, CEO of the newly launched crypto exchange, AfriDax, emphasizes that Regulation 28 must adapt to keep pace with the rapidly evolving financial landscape driven by innovations such as crypto assets and the tokenization of real-world assets on blockchains.
“Many South Africans want to diversify their pension funds and benefit from the incredible performance of Bitcoin and similar crypto assets.”
South Africa has some of the largest pension funds in the world.
For example, the Government Employees Pension Fund (GEPF) is a defined benefit fund that manages pensions and related benefits on behalf of government employees in South Africa.
Established in 1996, it is the largest pension fund in South Africa and one of the largest pension funds in Africa and the world with more than 1.3 million active members, in excess of 520,000 pensioners and beneficiaries, and assets worth more than R2.3 trillion ($122.3 billion).
Follow us on X for the latest posts and updates
Join and interact with our Telegram community
__________________________________________
__________________________________________
