Johannesburg - Bitcoin users in South Africa finally have their own locally made digital wallet for the virtual currency.
Singapore headquartered company BitX, which has a development team in Cape Town and also operates one of only two South African Bitcoin exchanges, has launched a digital Bitcoin wallet app for Android and Apple iOS devices.
The BitX app targets countries such as South Africa, Kenya, Namibia and Malaysia, and aims making buying and selling of the crypto-currency easier through the press of a touchscreen.
Dozens of Bitcoin wallets are available on mobile app store markets such as Google’s Play Store.
But developers of BitX say their app stands out owing to its easy-to-use interface, a secure offline vault that stores Bitcoins in case a phone is lost, and a feature dubbed ‘KYC’ (Know Your Customer) that allows for mobile number verification and uploading of identification documents where applicable.
“We just make it really easy for people to access this tech for the first time,” Co-founder and CEO of BitX Marcus Swanepoel told Fin24.
Swanepoel said the app is also FICA (Financial Intelligence Centre Act) ready, even though Bitcoin is independent of banks.
“We choose to self-regulate because we feel it's prudent to do that,” explained Swanepoel, who added his company is preparing for any potential future requirements of Bitcoin in South Africa.
Regulators in New York State, for example, are finalising ‘BitLicenses’ to regulate the currency, a move that Swanepoel explained could spread to other parts of the world.
Other flexibilities have been built into the BitX application as well, including the potential ability to use any crypto-currency - such as ‘Dodgecoin’ - and even the option to connect with various exchanges.
SA as a Bitcoin hub?
Swanepoel, who is a chartered accountant, also told Fin24 that South Africa is a strong candidate as a global hub for Bitcoin thanks to the country’s base of financial skills.
According to a WEF Global Competitiveness Report, South Africa has previously rated third out of 148 countries for financial markets development.
“The financial technology that comes out of South Africa is pretty good,” Swanepoel told Fin24.
“It is quite a natural place for talent in South Africa to move to,” he added.
Global appetite and risk for Bitcoin
It is unclear how many Bitcoin users there are in South Africa owing to difficulties in researching this topic, but Swanepoel said the local market is small compared to other countries such as the US.
But this could change as emerging markets look to easier ways to move money locally and across borders.
However, regulators across the globe - including those in South Africa - have raised alerts about the safety of Bitcoin as a crypto-currency.
In September, the National Treasury, the SA Reserve Bank (Sarb), the Financial Services Board (FSB), the South African Revenue Service (Sars) and the Financial Intelligence Centre issued a statement on virtual currencies.
"While there are benefits associated with this new technology, it is difficult to assess those benefits against the risks of something so novel, innovative and technologically sophisticated," Treasury said.
"Users of virtual currencies can therefore become susceptible to fraudulent or any other criminal behaviour as they may be less circumspect than usual when faced with the promise of high return investment opportunities."
Warnings of virtual currency risks have come about thanks to Bitcoin bursting onto the global scene this year.
Late last year, the value of Bitcoin shot through $1 000 amid a buying frenzy.
But the price has since dropped below $400 amid setbacks such as the crypto-currency being used on Internet black-market Silk Road to buy drugs and other goods.
The collapse this year of Bitcoin exchange Mt. Gox has also hit the currency hard. The Tokyo-based exchange has blamed hacking for the loss of 850,000 Bitcoins.