Absa makes first move into R25 billion market in South Africa

Absa has become the first bank on the continent to offer digital-asset custody as it seeks to tap a market estimated at about $1.5 billion (R25 billion). 

The Johannesburg-headquartered lender will offer its South African institutional asset clients secure safekeeping, administration, and transfer services for digital assets. 

These clients include asset managers, non-bank financial institutions and corporates.

“We expect to extend this to other client segments in South Africa in due course, and are actively working on bringing the solution to some of our other African presence countries in line with regulatory approvals required,” said Rob Downes, head of digital assets at Absa’s corporate and investment banking unit. 

The bank received approval from South African regulators for the service that currently supports Bitcoin, XRP Ledger, Ethereum and USDC.

Absa wants to expand to support other assets.

“Bitcoin is the predominant asset in custody,” Downes said. The lender is working with clients to support “other crypto assets they would like to be custodied in South Africa.”

The South African Reserve Bank estimates that crypto assets under custody at the nation’s three biggest licensed service providers — Luno, VALR and Ovex — more than doubled to R25.3 billion by the end of 2024 from less than 10 billion rand at the start of 2023. 

The worldwide custody market is valued at roughly $953.5 billion by 2026, and is projected to grow to as much as $4.38 trillion by 2033.