As most of the world, save for the fanatic crypto-loyalists, collectively loses interest in cryptocurrencies amid an ongoing economic slump, South Africa has jumped on board with its own stablecoin.
The ZARP Project launched in November last year and claims to be “fast, safe, efficient, and the only fully audited Rand stablecoin.” It also just partnered with Old Mutual Wealth as the custodian to manage its cash reserves.
The future financial system?
If you’re still in the dark as to what a stablecoin is, it is a cryptocurrency that’s ‘pegged’ to a fiat currency (government-issued tender) or exchange-traded commodity, like the South African rand or gold.
The idea behind doing that is to reduce the volatility of the price that cryptocurrencies suffer. Currently, 1 ZARP equals R1.00. Meaning, for every ZARP coin issued, R1.00 is held by the backer. In this case, that’s Old Mutual Wealth. When new coins are issued, rand is added to the fund. Similarly, when cash is withdrawn from the treasury, an equal number of ZARP coins are ‘burned’ (destroyed).
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According to ZARP’s website, the coin’s treasury and smart contracts on the Ethereum blockchain are audited by independent firms. That, together with the backing from Old Mutual Wealth, one of South Africa’s oldest and most trusted financial institutions, should go a long way in the perceived trustworthiness of the stablecoin among South Africans.
Simon Dingle, managing director of ZARP and CEO of Inves Capital, said:
“We designed ZARP to be the most trusted cryptocurrency project in South Africa, with cash reserves fully backing the value of ZARP tokens circulating in the market. We also set the standard for stablecoin auditing in South Africa with full and independent attestation of our cash reserves, with an audit trail from day one, further adding to transparency and trust behind ZARP.”
Source: TechCentral