In recent years, crypto and forex trading has become increasingly popular among Africans. During the COVID-19 pandemic, forex trading in Africa increased by 477%. Similarly, Africa’s cryptocurrency markets grew by over 1200% between 2020 and 2021.

Kenya, Nigeria, and South Africa have the highest number active crypto and forex traders in the continent. This article will focus on the popularity of crypto and forex trading in South Africa. It will also highlight three main reasons that have contributed to the growth of online trading in this country.

The Growth Of Forex Trading In South Africa

South Africa has the most developed and liquid financial market in Africa. A report by furtherafrica.com shows impressive growth in South Africa’s retail forex market between 2013 and 2016.  In just three years, its retail forex market rocketed from $14 billion to $21 billion. Africa is home to over 1.3 million forex traders. About 190,000 traders are from South Africa, that’s roughly 14% of the total number of traders in the continent. Although Nigeria has the highest number of forex traders in Africa,  South Africa has a higher daily FX trading volume. 

The Growth of Crypto Trading in South Africa

The global cryptocurrency market is rapidly growing. In 2020, more than 100 million new crypto traders joined the market. The cryptocurrency revolution is evident in South Africa too. The Cullen Commission recognizes South Africa as the 7th country with the highest cryptocurrency adoption. While most African countries use cryptocurrencies for remittances, crypto in South Africa is primarily used for trading. It is estimated that 71% of cryptocurrency in this country comes from exchanges. 

A significant number of crypto traders in this country are also using cryptocurrencies for savings. In the last decade, the South African Rand (ZAR) lost about 50% of its value against the dollar. Consequently, some locals are using crypto as savings to protect against inflation. According to Triple-A, 12.5% of the South African population own cryptocurrency. It is estimated that over 7.7 million South Africans own cryptocurrency. Bitcoin, Ethereum, Ripple, and US Dollar Tether (USDT) are the most popular crypto assets in this country. Although crypto and forex trading activities are increasing in South Africa, it is evident that cryptocurrency trading is more popular.

Why Is Cryptocurrency and Forex Trading Growing Popular In South Africa

Here are three major factors that have contributed to the growth of crypto and forex trading in South Africa.  

  • Well-Organized Financial Markets

The history of South Africa’s financial markets dates back to the 19th century. In 1886, gold was discovered in the Witwatersrand area. There was a need for a transparent marketplace where miners could trade minerals with dealers and large corporations. In the same year, Benjamin Miners Wolman founded the Johannesburg Exchange & Chambers Company. Today, the company is known as the Johannesburg Stock Exchange. JSE is today along with the American NAS100 the most popular exchange in South Africa and many South African traders trade with South African brokers that have NAS100 as well as JSE stocks.

Since 1886, South Africa’s financial market has rapidly grown. Today, it is the leading financial market in Africa. The country’s currency is one of the most traded currencies in Africa and the 18th most traded currency in the world. Due to its well-organized financial market, South Africa is now a hub for international brokers and crypto exchanges. As a result, more and more locals are venturing into the world of crypto and forex trading.

  • Strict Regulation

All non-banking financial institutions operating in South Africa adhere to the stringent regulations laid out by the Financial Services Conduct Authority (FSCA). Initially, forex and crypto trading in South Africa was not well regulated. Consequently, there was an increase in illegal activities and online trading scams. In 2018, the FSCA was founded. It has since enacted strict rules to curb fraudulent activities in the country. Today, forex and CFD crypto currency brokers operating in SA are required to provide FSCA with accurate data on transaction details, leverage, and the price of various financial assets. In doing so, the FSCA has ensured that brokers treat their customers fairly. The favorable trading conditions provided by the brokers have led to a significant increase in forex traders in the country.

Cryptocurrency trading in South Africa has taken a new path too. The FSCA recently classified cryptocurrency assets as financial products that must be regulated. The regulatory body aims at implementing the application of foreign exchange controls and also licensing crypto trading companies operating in the country. These regulations have protected South African traders from falling prey to online scams. As a result, more and more traders have felt confident about venturing into forex and crypto trading.  

  • Easy Access To Trading Platforms

The regulations set by FSCA are not as strict as those of other global regulators. Many brokers have found this market favorable since they can make massive profits and reduce operating costs. International brokers with a proven track record have expanded into South Africa’s financial market. Some such as IG Markets, FXCM, Hot Forex, and Capex have even set up physical offices in the country.

Other reputable brokers operating in South Africa include:

  •  AvaTrade

  •  HotForex (HFM)

  •  FP Markets

  •  Tickmill

  •  Exness

  •  XM

  •  Alpari

  •  ThinkMarkets

  •  Oanda

  •  IC Markets

These brokers give traders access to the world’s most popular trading platforms; MT4 and MT5. The platforms are compatible with Android, Windows, IOS, and Mac. Since many locals have access to smartphones and the internet, accessing these trading platforms has become increasingly easy. What’s more, these brokers have low minimum deposit requirements allowing people from all income brackets to participate in trading. Additionally, some brokers have introduced ZAR accounts allowing South African traders to fund and withdraw profits in local currency. 

These accounts have grown popular as they help traders avoid losses that occur due to exchange rate fluctuations. Crypto traders in South Africa also have access to numerous credible crypto exchanges. Some of the leading exchanges operating in the country include:

  •  eToro

  •  Crypto.com

  •  Capital.com

  •  Coinbase

  •  Binance

  •  Luno

  •  VARL

 Key Takeaways

In recent years, the popularity of crypto and forex trading in South Africa has increased. This growth can be attributed to the country’s well-organized financial market. It has the most developed and liquid financial market in Africa and has quickly become a hub for international brokers and crypto exchanges. South Africa’s local regulator, FSCA has strived to ensure brokers operating in the region treat their clients fairly. It is also regulating cryptocurrency assets in the country. 

These regulations have resulted in increased investor confidence, which in turn, has led to an increase in trading activities. Many reputable international brokers and crypto exchanges operate in South Africa today. Some even allow locals to fund, trade and withdraw their profits in their local currency (ZAR). They’ve also made trading platforms accessible to anyone with a smartphone and the internet. As a result, more and more people are finding their way into online trading.

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