20 June 2019

South Africa: Distrust Deters Adoption of Cryptocurrencies

Johannesburg — A LACK of understanding and trust are hindering South Africans from using cryptocurrencies.

This is according to a report by a global cybersecurity company that reveals that while 34 percent of South Africans have some knowledge of cryptocurrencies, and there is a demand among many to use the technology, 19 percent fully comprehend how they work.

Kaspersky established the trends it outlined in a report titled, "Uncharted Territory: Why Consumers Are Still Wary about Adopting Cryptocurrency."

The rate in which cryptocurrencies are being adopted by global consumers is slowing down, despite celebrities and influencers embracing the technology.

Many consumers still lack a proper understanding of how cryptocurrencies work and this is continuing to halt mainstream adoption, according to Kaspersky.

"To date, 70 percent of South Africans have never purchased cryptocurrency, highlighting just how far away we are from it being accepted as a common form of payment or investment," said Vitaly Mzokov, Head of Commercialisation at Kaspersky.

Lack of understanding could be leading to mistrust in cryptocurrencies' ability to keep consumers' money safe.

For instance, 35 percent of South African respondents stated that they believe cryptocurrencies are quite volatile and they need to stabilise before they are prepared to use them.

There is also a common perception amongst consumers that cryptocurrency will not be around forever.

Some 17 percent locally believe cryptocurrencies are a trend not worth bothering about.

"It is clear that mainstream adoption and growth of cryptocurrency is being held back due to the vulnerable nature of the technology," said Mzokov.

He said while there was a high appetite to use it, giving one's hard-earned cash to something one did not fully understand, or trust, was a hurdle.

Mzokov encouraged crypto businesses to organise themselves effectively to show they were able to protect their customers' investments.

Efforts are underway to help improve stability and foster trust in cryptocurrencies.

Kaspersky partners such as Merkeleon have developed legitimate marketplace platforms, online auction platforms, cryptocurrency exchanges and crypto payment systems.

Alexey Sidorowich, Head of Sales and Business Development at Merkeleon, said cryptocurrencies were an exciting industry but must be built upon trust.

"It is, therefore, imperative that cryptocurrency businesses do all they can to protect their networks and ensure their customers' finances are safe and secure," Sidorowich explained.

A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions.

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