South Africa's DeFi market to reach $180M by 2028

A recent study by South Africa’s Financial Sector Conduct Authority (FSCA) projects that the country's decentralised finance (DeFi) market will reach $180.7 million by 2028.

The FSCA projects a volume of $2.8 million in 2025.

The study identifies retail customers as the primary users of DeFi services, followed by small and medium-sized enterprises.

The FSCA highlights enhanced financial inclusion, increased transparency, and reduced transaction costs as key benefits of DeFi.

However, the authority also notes inherent risks such as smart contract vulnerabilities, market manipulation, and financial losses due to fraud or platform failures.

The FSCA emphasises the need for "robust" regulatory oversight and consumer protection measures to address these risks and build market trust.

The FSCA Market Study, which surveyed 21 cryptocurrency asset service providers, revealed varying estimates of the DeFi total value locked (TVL) in South Africa.

Around 38% of respondents believed the TVL to be over $27 million, while 24% estimated it to be between $2.7 million and $27 million, and another 24% were unsure.

The study identified payments (52.38%) and lending and borrowing (47.62%) as the key use cases for DeFi in South Africa.

Other use cases include decentralised exchanges, tokenisation, stablecoins, asset management, and staking.

The mainstream adoption of cryptocurrency assets (62%), the emergence of new DeFi platforms (43%), and the presence of underbanked or unbanked populations (33%) are seen as key drivers of DeFi growth.

The FSCA Market Study suggests that effective DeFi regulation and consumer protection require active stakeholder engagement.

The FSCA advocates for public-private collaboration, consultative documents, regulatory sandboxes, and knowledge exchange activities to ensure regulatory clarity, transparency, and alignment between authorities and market participants.

This approach aims to address blockchain concerns and adapt to evolving international standards.