(Bloomberg) – Africa’s largest cryptocurrency exchange is seeking a foothold in the United States, the latest international hub to try and tap into one of the largest digital asset investor populations in the world. world.
Bloomberg’s Most Read
Owned by conglomerate Digital Currency Group Inc., Luno is evaluating regulatory regimes in all 50 states to enable its rollout within the year, Marius Reitz, its managing director for Africa, said in an interview.
“It’s more complex than getting into an individual market because of different states and different regulations within each of those states, so there are a lot of moving parts,” Reitz said. “But that’s one of the company’s goals for 2022.”
A number of fast-growing cryptocurrency exchange brands – such as FTX and Binance – have moved into the US market. The world’s largest economy is home to more than half of the world’s crypto unicorns, according to CB Insights. A unicorn is a private startup that has reached a valuation of at least $1 billion.
Founded in 2013, Luno has 9 million users from Asia to Africa. It currently offers token exchanges including Bitcoin, Ethereum and Ripple, and may soon add new coins chosen from the top 10 most liquid cryptocurrencies in the world, Reitz said.
“A lot of running time is spent on safety and guarding” when choosing a part, he said.
Digital Currency Group was the first investor in Luno and fully acquired it in 2020, reaching a $10 billion valuation a year later when it raised $700 million in a deal led by SoftBank Group Corp.
Luno’s other early backers included Cape Town-based technology investor Naspers Ltd., Africa’s largest publicly listed company.
The spread of cryptocurrencies in Africa has so far focused on Nigeria and South Africa, where almost a fifth of the population owns some form of digital assets. This compares to the global average of just over 10%, according to the latest data from Finbold. Luno has also identified opportunities in East Africa, where it already has operations in Uganda, Reitz said.
About 16% of Americans have invested in, traded, or used cryptocurrencies, according to a recent Pew Research Center survey.
In South Africa, Luno is awaiting new regulations which Reitz says are “imminent” and will likely strengthen consumer protection. The changes should allow platforms, including Luno, to attract institutional investors currently absent from the market.
The rules could also make it possible to list more sophisticated products. Reitz said that in a year or two he expects offerings such as cryptocurrency exchange-traded funds, which allow investors to hold a basket of coins without having to buy them.
The South African stock market operator JSE Ltd. has previously pushed back on efforts to list crypto ETFs, citing the lack of a regulatory framework in the country.
“We have all these asset managers sitting on the sidelines who want to launch their own crypto products, but they’re not able to do that,” Reitz said. “As soon as we see regulation, you will see a slew of crypto products offered to investors in South Africa.”
Bloomberg Businessweek’s Most Read
©2022 Bloomberg LP