South African cryptocurrency exchange aims to buy a bank

written by Jan Vermeulen

South African cryptocurrency exchange operator and digital asset market maker Ovex hopes to acquire a bank.

“We’re far larger and more profitable than a lot of the smaller banks in South Africa,” Ovex CEO Jonathan Ovadia told MyBroadband.

According to Ovex’s monthly statistics, the exchange sees trading volumes of between $500 million (R9.1 billion) to $600 million (R11 billion) per month.

Ovadia was responding to questions in the wake of crypto assets being declared financial products in South Africa.

The Financial Services Conduct Authority (FSCA) issued the declaration late Wednesday afternoon, announcing that crypto asset service providers must apply for operating licences between 1 June and 30 November 2023.

Asked whether this is enough time, Ovadia said it depends on the rules the regulator sets out and how long it takes to process applications.

“This move is very positive for crypto in Africa as a whole,” Ovex community manager Nick Bergonzoli told MyBroadband.

“Legitimising the space will obviously open the doors for traditional players that were apprehensive given the lack of clarity in regulation.”

Bergonzoli added that Ovex is no “vanilla” crypto exchange.

“We operate in both the TradFi [traditional finance] and crypto space and are licensed to do so,” he said.

“We consider ourselves the bridge between both the world of TradFi and the world of crypto. Now we can help Africa’s largest TradFi players cross the bridge building a better financial ecosystem for Africa as a whole.”

In April, Ovadia said Ovex plans to expand to 20 African markets by the end of the year.

Following the FSCA’s declaration, South African crypto exchanges lauded the move as positive and said it paves the way for traditional finance players to enter the cryptocurrency space.

Ovadia said they aren’t too concerned about banks invading their turf.

“We’re much more excited about this growing the market to large institutional investors, who we, as Ovex, are by far in the best position to service,” he said.

“Our products very nicely complement traditional banking services.”

Ovadia believes banks and TradFi institutions will get involved in crypto.

“It’s an incredibly exciting space, and they would be foolish not to,” he stated.

Ovadia said they have been positioning for the FSCA to begin regulating crypto assets for a long time.

“The declaration, in general, is incredibly positive. This will grow the market tremendously and weed out bad actors.”