Revix, a locally founded crypto neo-brokerage and investment platform, has just raised R58.5m in offshore capital from a consortium of UK and European investors as well as the Qatar Development Bank, to fund the launch of its own mobile application as well as expansion into the EU.
Revix founder and CEO Sean Sanders says they want to blur the lines between investing in traditional asset classes, such as stocks, and emerging alternative investment sectors, such as AI, biotech, 5G, eSports and cryptocurrencies.
The success of Revix, which was only started in 2018, is in many ways emblematic of how SA entrepreneurs are blazing the trail in domestic crypto innovation. It is one of 21 start-ups, and the only SA FinTech firm, to be accepted into the world-renowned six-month Berkeley Blockchain Xcelerator, which partners with companies using new technology to solve societal challenges.
The question though is whether SA’s regulators are keeping pace with the rate of innovation in the crypto universe. Their approach to regulating the sector also appears to have a decidedly old-school, or dare one say outdated, feel to it. For example, the Reserve Bank wants to apply foreign-exchange controls to crypto currencies and force all crypto asset service providers to apply for a special licence from the Financial Sector Conduct Authority (FSCA).
It seems odd to try to overlay a set of exchange-control regulations that were explicitly designed to restrict the free movement of money across borders to regulate a sector that is by its very nature borderless, digital and not under government control.
The regulation also seems to view all cryptocurrencies as being the same, which is simply not the case. Certain cryptocurrencies, bitcoin being a prime example, are designed to challenge fiat currencies by being a form digital gold. Others, such as ethereum, are aimed at enabling developers to build peer-to-peer decentralised applications using their underlying blockchain technology.
If the regulations being brought to bear on the sector can't even recognise such distinctions, one has wonder what they will achieve other than stifling future innovation in the local crypto economy.
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