In the same week that crypto exchange VALR launches a USD private credit token targeting 8% to 10% growth a year. From Moneyweb.
It’s been a big week for crypto in South Africa. First, tokenised stocks arrived, with Luno announcing its August launch of 60 US-listed tokenised stocks, as well as the S&P 500 index – for as little as R20.
Also this week, crypto exchange VALR introduced the USD Private Credit Token (USDPC), the first of its kind in SA, targeting stable yields of between 8% to 10% annually, backed by a diversified portfolio of loans.
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With both these developments, crypto and blockchain are starting to make good on their promise of democratising the world of investments.
In addition, Bitget, one of the world’s largest crypto exchanges and newly arrived in SA, earlier this month launched a limited offering of tokenised stocks, including Tesla, Apple, Nvidia, Strategy (formerly MicroStrategy), an S&P 500 exchange-traded fund (ETF) and Circle. It plans to expand this to more than 100 stocks in the near future. The minimum investment is $5 (approximately R88.20), payable in rands.
Tokenised stocks are digital versions of traditional shares that are fully backed by real stocks held in regulated custody and recorded on the blockchain. They do not carry voting rights, and dividends are automatically reinvested into the same asset.
‘A first for Africa’
Among the stocks to be offered by Luno are Apple, Alphabet, Nvidia, Tesla, Circle (the issuer of US dollar-backed stablecoin USDC) and Pfizer, to name a few.
Though this is not a world first, according to Luno it is a first for Africa. In recent weeks, several international exchanges have allowed clients to buy tokenised stocks alongside cryptocurrencies, all of which are represented in a single digital wallet.
This has long been one of the promises of blockchain technology: the ability to tokenise real-world assets, fractionalise them, and offer them to investors at much lower costs – and with much faster settlement – than traditional stock exchanges.
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Customers can buy Luno’s tokenised stocks directly in rands, without needing to convert foreign currency or pay foreign exchange fees. Instant settlement is also available, with no lock-in periods, meaning assets remain liquid. Trading will initially be available 24 hours a day, five days a week, and ultimately every day.
“This is a game changer,” says Christo de Wit, SA country manager for Luno. “Blockchain technology makes tokenisation possible, so instead of having to pay around R4 000 for one Apple share, you can now invest in Apple for as little as R20, and you don’t need to use your foreign currency allowance.
“We believe this is a huge step in democratising access to stock investment.
“Ordinary South Africans, rather than just the wealthy, can now participate in some of the best stocks in the world.”
These tokenised assets are fully backed by real shares held in regulated custody through Luno’s integration with global partners, including Kraken’s xStocks and Backed Finance, which specialises in using blockchain to tokenise stocks and ETFs.
Luno expects the new launch to increase participation in global markets among South Africans – particularly mobile-first, younger investors.
Removing barriers
“We’re providing access to investments that were previously only available to wealthy individuals with offshore accounts,” adds De Wit.
The tokenised stocks will initially be targeted at Luno’s existing SA client base of more than one million users, but it plans to extend this to Nigeria and other African markets.
This bridges the gap between crypto and traditional finance.
Would-be traditional finance (TradFi) investors in emerging markets encounter multiple layers of fees, long waiting times, and complex processes. De Wit says Luno’s tokenised stock offering removes these barriers while maintaining security and regulatory compliance.
“We want our customers to be able to seamlessly manage a diversified portfolio of cryptocurrencies and tokenised traditional assets such as stocks, ETFs and potentially other asset classes, within a single, trusted ecosystem. In this way, (we are) breaking down legacy barriers of access, cost and time.”
VALR’s offering
Meanwhile, VALR’s yield-bearing crypto asset USDPC, with a target annual return of 8% to 10% in USD, should find interest among retail as well as institutional investors. It was previously available only to select clients but is now being offered to a much wider market.
UDSDPC represents an interest in the Garrington Private Credit Strategy, managed by Garrington Capital, a private credit manager with more than $6 billion under management. The funds are invested in senior secured, asset-backed private loans across North America.
