Global cryptocurrency exchange Bittrex led the $1.5 million seed funding round for the South African crypto trading platform VALR, as per a February 28 Coindesk report.
According to Coindesk, the trading platform will list as many as 50 digital coins and is scheduled to start its operation on March 1.
So far, cryptocurrency exchanges could not make a proper impact on the African markets and Bittrex CEO Bill Shihara believes that the South African market has “tremendous untapped potential.”
Speaking to Coindesk, Farzam Ehsani, co-founder and CEO of VALR, said: “Companies are not allowed to go and buy [large amounts of] crypto from offshore markets. This makes it very difficult for crypto exchanges in South Africa to access liquidity from international markets. [South Africans] want their hands on a store of value that doesn’t depreciate the way the rand has.”
Ehsani also said that 1,500 users, dominated by South Africans, already registered in the wait list of the exchange and also started to activate accounts in a closed beta.
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Bittrex will also be involved in the South African exchange’s operations as it will supply the new platform with global liquidity and competitive prices for crypto-to-crypto trading. Ehsani also revealed that the exchange is working to add fiat-to-crypto trading support on the platform.
African Crypto Space
Unlike the rest of the world, cryptocurrency penetration in Africa is very low, mainly because of the sub-par infrastructure and unstable economy.
The lack of supply also led to a premium pricing of Bitcoin and other cryptocurrencies across the continent.
However, digital coins are gaining a lot of popularity among the population. According to the Global Digital Report 2019, 10.7 percent of mobile users in South Africa own cryptocurrencies.
The government of the country is also trying to regulate the sector as in January this year, a jointly published paper by several South African institutions mandated registration for the crypto exchanges operating in the country.
“The VALR team has the potential to change the cryptocurrency landscape in South Africa and globally,” Michael Jordaan, a VALR investor from Montegray Capital, told the publication.