Old Mutual Wealth, a pan-African financial services provider listed on the London and Johannesburg bourses, has vowed financial commitment to drive the global adoption of ZARP, a stablecoin pegged to the South African rand. The centuries-old banking group is partnering with Inves Capital, a London-based investment outfit backing disruptive money technologies, to “infuse substantial liquidity into the ZARP network and foster its integration into DeFi protocols.”

ZARP, an Inves Capital portfolio project, is pegged to the rand at a 1:1 value. ZARP’s creators claim each token is minted in correspondence to rand deposits managed separately by Old Mutual Wealth. This move will see Old Mutual Wealth extend its services beyond treasury to provide capital injection for scaling ZARP.

“In 2022 we announced that Old Mutual Wealth had been appointed to handle the cash reserves backing the ZARP Stablecoin project,” said Simon Dingle, Managing Director for Inves Capital and ZARP Stablecoin. “We are now extending our relationship to explore new frontiers in decentralised finance and provide deep liquidity to emerging capital markets. Crypto is entering a new phase of growth and ZARP is braced to play a central role in representing Rand value in these exciting new protocols.”

Dingle and his team are betting on the rand’s stability and global demand, which is projected to increase amid BRICS' speculated move towards adopting members’ national currencies. Meanwhile, the currency of Africa’s most industrialised economy continues to pay the price of an economy battered by power crises, restrictive monetary policies, and political missteps, reports Bloomberg.

Rand is reported to be most used for intra-African remittances, owing to South Africa’s status as a top immigration destination. This resemblance with the US dollar might give the rationale for scaling a digital version of the rand, and its integration into web3 and global digital money corridors. It helps that South Africa’s experiments with a central bank-backed digital rand do not involve the retail market, for which several use cases of a rand-pegged stablecoin can be explored. This includes initiatives that target enhanced financial inclusion. ZARP is currently listed in crypto exchanges ChainEX, OVEX, and Uniswap.

“It was always our intention to extend the partnership, and that is exactly what we are doing now, because we have seen the potential application of the technology first-hand,” said Farhad Sader, Old Mutual Wealth’s Managing Director.