Coinbase flotation a ‘watershed moment’ for crypocurrencies, says Luno CEO Swanepoel

The age we are currently living in can be easily dubbed as the era of cryptocurrency. With virtual currencies like Bitcoin and Coinbase on the rise and booming in value, many are left wondering about the status of these currencies locally and the future of crypto in Africa. South African-born global cryptocurrency exchange, Luno, has reported adding nearly a million new South African customers during 2020 and a further 250,000 so far in 2021. Marcus Swanepoel, the Founder and CEO of Luno, sat down with CNBC Africa to discuss the industry and the implications of the Coinbase IPO. Swanepoel began by addressing the significant milestone of Coinbase going public on the NASDAQ. He emphasized that this move indicates a 'watershed moment' for the industry with valuation estimates ranging from $100 billion to $150 billion, surpassing the value Facebook had during its IPO. Swanepoel highlighted that this moment would enhance trust and transparency within the industry, shedding light on the operations of businesses built around cryptocurrencies, similar to some of the largest banks globally. He expressed his belief that this development would accelerate global regulations, ultimately benefiting consumers. On the topic of regulation, Swanepoel pointed out that many legitimate cryptocurrency companies, including Luno and Coinbase, have been self-regulating, ensuring compliance equivalent to or even exceeding that of traditional financial institutions. He anticipated that official regulations would eliminate bad actors in the industry, promoting a flight-to-quality for established companies. Swanepoel noted that this regulatory shift, while not changing operations significantly for compliant companies, would enhance credibility and trust in the sector. Addressing the valuation of cryptocurrency exchanges like Coinbase and Luno, Swanepoel acknowledged the complexity of determining accurate valuations given the industry's volatility and regulatory uncertainties. He cited the recent trading of Coinbase shares in the secondary market as indicative of the dynamic nature of crypto valuations, emphasizing the importance of going public to bring clarity to the market. Despite the current super crypto bull market, Swanepoel shared that Luno has no immediate plans for an IPO, preferring the flexibility and long-term decision-making benefits of remaining private. Looking beyond investing and trading, Swanepoel discussed the evolving landscape of the crypto economy. While the current narrative focuses on investment, he highlighted emerging use cases such as borrowing, lending, and transactional activities using stablecoins like USDC. Swanepoel projected that over the next three to five years, the transactional use cases of cryptocurrencies would expand significantly, envisioning a future where cryptocurrencies are seamlessly integrated into everyday transactions. In conclusion, Swanepoel's insights shed light on the transformative potential of cryptocurrencies in Africa and globally. As Coinbase's IPO marks a pivotal moment for the industry, companies like Luno continue to innovate and adapt to the evolving landscape of the crypto economy.