While stokvels investing in cryptocurrency may seem like a good idea, not using formal stokvel banking products can be risky.
South African banks have noticed an uptick in the growth of stokvels, with groups putting their money into cryptocurrency becoming a popular option,Stokvels are a type of credit union or saving scheme where individuals contribute sums of money to a pool on a fixed basis, and members receive the lump sum on a rotational basis.
Other banks noticed similar growth, with FNB seeing a 15% growth in net stokvel deposits and ABSA seeing a 15% year-on-year growth in stokvel accounts.by African Response found that tailored stokvel bank accounts were far less appealing to customers than buying into cryptocurrency or just stashing the cash “under the mattress.
Most notable was the collapse of FTX, which was the third-largest cryptocurrency exchange by volume at the time and had over one million users.These services effectively acted as cryptocurrency custodians and operated as savings accounts, promising customers yields by lending their deposits. Until very recently, those who had used its Gemini Earn savings account had lost access to their funds. Earlier this year, Gemini announced that its customers would get all their deposited crypto back, but not the promised interest.
Regardless, anyone who had funds on Ice3x when it went under is out of pocket and will have to file a claim with the liquidators if they hope to get anything back.The report encourages stokvels to use the formal savings and investment market, echoing one of Warren Buffet’s principles about investing — keep to what understand.For instance, FNB introduced a digital stokvel account with no monthly fee in 2020, which has helped customers save over R131 million in withdrawal fees.
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