Cryptocurrency, once the domain of niche enthusiasts, is edging closer to mainstream acceptance. In South Africa, nearly one in ten adults holds an account with Luno, a leading cryptocurrency exchange. By April, the Financial Sector Conduct Authority had licensed 75 crypto asset service providers, indicating a robust interest in digital assets. Despite this, cryptocurrencies like bitcoin, ethereum, and Ripple’s XRP have yet to achieve full mainstream status.
Luno’s CFO, Alwyn Jones, believes this may soon change. “The things that will be critical to crypto going mainstream, in my view, are longstanding sensible regulatory frameworks and institutional flows into the asset class, which will be driven by pensions and long-term savings,” Jones, 47, stated during an online call from the UK.
Jones emphasized the potential of distributed ledger technology, which offers reduced transaction costs and enhanced security. However, he noted that widespread consumer adoption and practical use cases are crucial for the next phase of cryptocurrency integration. “The next five to ten years will be about how we get these technologies into consumers’ hands and where they start using them first,” he added.
Luno has been in discussions with several large asset managers about incorporating crypto investments into traditional funds. Kyle Dowie, CEO at Dooya, a crypto asset service provider, supports this integration. “Crypto is now a regulated asset class, and just like other asset classes, portfolio managers should be looking to offer their clients access to the benefits and returns that crypto has to offer,” Dowie explained.
While regulation is a significant step, Jones suggests that a transformative use case for crypto is still needed. He compares it to the shift from physical music CDs to streaming services. “Now, for the price of a CD, I can stream an entire library instantly on multiple devices. Our entire notion of ownership changed overnight. I don’t think we’ve come up with a similar use case yet for crypto. Is there something there? Absolutely.”
Luno’s growth reflects the increasing interest in cryptocurrencies. The platform boasts over 12 million customers globally, with more than 4 million in South Africa alone. It continues to grow at 15% year on year. Most South African investors start small, with an average first investment of about R190. Bitcoin, ethereum, and XRP remain the most popular choices, but as Luno expands its offerings, more users are diversifying into altcoins.
Jones also highlighted the demographic shifts within the crypto community. The average age of South African crypto buyers is around 35, and while the global user base is predominantly male (70% male vs. 30% female), in South Africa, the gender split is more balanced at 64% male and 36% female. “We’re moving slowly away from the whole crypto bro thing, which I think is an incredibly positive move. So it’s not something that’s on the edge or trendy or is seen necessarily as being a very narrow customer base. It’s becoming more broad-based,” Jones remarked.
Luno’s strategy includes broadening its business operations. A notable example is its partnership with Pick n Pay, which has recently surpassed R1 million a month in transactions. While this figure is modest, Jones is optimistic about future growth. “It’s got to go big in the next decade, or it will have died a death.”
As the regulatory landscape solidifies and institutional investment flows increase, the path to mainstream cryptocurrency adoption seems clearer. The ongoing efforts by companies like Luno to integrate crypto into everyday financial systems are paving the way for a future where digital assets are an integral part of the global economy.