Investors in South Africa can now purchase securities from tech giants Apple and Alphabet in digital format through the platform Luno.
Luno, a leading cryptocurrency and digital investment platform, has announced the launch of its tokenized stocks platform in South Africa. This innovative service, set to go live from early August, will enable South Africans to invest in fractional shares of U.S. stocks and Exchange-Traded Funds (ETFs) starting from just R20 ($1.13).
Regulatory Compliance and Secure Custody
The Luno tokenized stocks platform operates by offering digital tokens that represent real U.S. stocks and ETFs on a 1:1 basis. These tokens are blockchain-based digital representations backed by actual securities held in custody to ensure each token matches a real share. This structure places Luno under closer regulatory scrutiny, as the tokens likely fall under South Africa’s capital market regulations. The Financial Sector Conduct Authority (FSCA) is actively working on clarifying the regulatory framework for crypto asset providers, including those offering digital securities, to ensure transparency and investor protection.
The secure custody of these tokens is ensured through partnerships with infrastructure providers like Kraken's xStocks and Backed Finance. The actual shares are held securely by a custodian or trust entity, while the blockchain tokens represent ownership rights on Luno’s platform. This hybrid approach aligns with global best practices for tokenized securities, where custody separation and blockchain ledger integrity are both prioritized.
Alignment with Global Standards
Luno’s approach combines blockchain technology with traditional securities brokerage infrastructure. It offers fractional investing compliant with investor protection rules, while using stable currency rails and blockchain transparency to reduce costs and improve accessibility. This model reflects a convergence of fintech innovation with regulatory expectations seen in other markets expanding tokenized securities, thus supporting South Africa’s position on the growing global landscape of digital financial assets.
Expanding the Investment Landscape
By removing barriers such as currency conversion costs, high fees, and trading-hour restrictions for retail investors in emerging markets, Luno is set to revolutionize the investment landscape in South Africa. The platform will support over 60 U.S. companies and market indices, including Apple, Alphabet, NVIDIA, and the S&P 500.
This move positions Luno as a multi-asset investment platform and marks what it says is a first-of-its-kind offering in South Africa's fast-evolving financial landscape. With over 5 million South Africans estimated to own cryptocurrency, the expansion into tokenized equities is expected to grow digital asset ownership by nearly 8% annually through 2031.
Upcoming Events
Luno is also hosting the Moonshot event, returning to Lagos on October 15-16. This event features keynotes, mixers, and future-forward ideas from top founders, creatives, and tech leaders in Africa. Early bird tickets for the Moonshot event are currently 20% off.
For more information and updates on Luno’s tokenized stocks platform, visit Luno’s website.
Sources:
- Luno Announces Tokenized Stocks Platform Launch in South Africa
- Luno Tokenized Stocks Platform: Regulatory Compliance, Secure Custody, and Global Standards
- Financial Sector Conduct Authority (FSCA) Licences Crypto Asset Providers
- Global Financial Standards and Tokenized Securities: A Convergence of Fintech Innovation and Regulatory Expectations
- By emulating global best practices for tokenized securities, Luno's platform, which is launching in South Africa, aims to ensure both custody separation and blockchain ledger integrity.
- The collaboration with infrastructure providers like Kraken's xStocks and Backed Finance ensures secure custody of digital tokens representing real U.S. stocks and ETFs on the Luno platform.
- With the introduction of the tokenized stocks platform, Luno aspires to expand the investment landscape in South Africa, supporting over 60 U.S. companies and market indices, and potentially increasing digital asset ownership by nearly 8% annually through 2031.
- The Financial Sector Conduct Authority (FSCA) is working on clarifying the regulatory framework for crypto asset providers, including those offering digital securities, to ensure transparency and investor protection in South Africa.
