Luno Wants to Become the Crypto Infrastructure Behind Africa’s Banks and Fintechs

For years, Luno has been known primarily as a place where individuals can buy, sell and hold cryptocurrencies.
Now the African-founded digital asset company wants to operate deeper inside the financial system.
Luno is expanding its business to provide banks, fintech companies, asset managers and large businesses with the technology they need to offer digital-asset services to their own customers.
Instead of every financial institution building its own cryptocurrency exchange, wallets, custody systems and payment connections from scratch, Luno wants them to be able to plug into infrastructure it has already built.
The strategy is often described as Crypto-as-a-Service.
In practical terms, a customer could use a bank or fintech application without necessarily interacting directly with the Luno brand, while Luno provides some of the technology operating behind the scenes.
From crypto exchange to infrastructure provider
Luno was founded in 2013 and spent much of its first decade building a retail cryptocurrency business.
Its consumer platform allows customers to buy, sell, store and transfer digital assets.
But the company now believes the infrastructure developed for that business can also be sold to institutions.
Ayotunde Alabi, chief executive and country manager for Luno Nigeria, told TechCabal that Luno wants to become a set of rails through which institutions can enter the digital-asset market.
A bank, for example, could potentially offer cryptocurrency products to customers without having to build its own exchange infrastructure.
An asset manager could integrate digital assets into its investment products.
A fintech could add crypto wallets or trading functionality to an existing application.
Businesses could also use blockchain-based infrastructure to settle payments internationally.
The strategy represents a significant change in how Luno intends to grow.
Rather than competing only for individual crypto traders, it can potentially earn revenue by providing infrastructure to companies that already have millions of customers of their own.
Three businesses form the strategy
Luno's institutional plan can broadly be divided into three areas.
The first is Crypto-as-a-Service.
This would allow financial institutions to integrate services such as digital-asset trading, wallets and custody without developing the entire technical and operational system themselves.
The second is cross-border payments and settlement.
Luno strengthened this part of its business in September when it acquired GTXN, a licensed cross-border payments provider.
GTXN provides infrastructure for areas including collections, payouts, foreign exchange, virtual accounts and settlement.
Luno says combining that system with its own liquidity and digital-asset infrastructure could allow businesses to move money between developed and emerging markets without depending on long chains of correspondent banks and intermediaries.
The third part involves stablecoins.
Stablecoins are digital tokens designed to maintain a stable value by being linked to an asset such as a traditional currency.
They can be transferred over blockchain networks while avoiding the large price movements commonly associated with cryptocurrencies such as Bitcoin.
Stablecoins could become an important piece
Luno's wider ecosystem includes BlockTower, which operates infrastructure around stablecoins and programmable payments.
BlockTower issues ZARU, a stablecoin designed to maintain a one-to-one value with the South African rand.
One ZARU is intended to represent one rand backed by reserves.
The token is available through Luno in trading pairs against dollar-backed stablecoins such as USDT and USDC.
But Luno's institutional ambitions go beyond listing existing stablecoins.
Its infrastructure could also enable organisations to launch or integrate stablecoin-based services of their own.
That has potentially significant implications for payments.
Traditional international transfers can involve several banks, foreign-exchange conversions and settlement systems before money reaches its destination.
Blockchain-based stablecoins can move value continuously, including outside normal banking hours.
The difficult part is connecting those blockchain transactions with regulated banking systems at both ends.
That is the type of infrastructure Luno increasingly wants to provide.
Why banks may prefer to plug in rather than build
Building a cryptocurrency product involves much more than creating a screen where a customer can press “buy.”
A financial institution needs trading infrastructure, liquidity, wallets and custody.
It must protect digital assets and manage private keys.
It needs systems for deposits and withdrawals.
Compliance processes must deal with identity verification, anti-money-laundering requirements and financial regulations.
Connections with banking and payment systems are also needed to move traditional currencies in and out.
Building and maintaining all of this can be expensive.
Crypto-as-a-Service attempts to turn those components into infrastructure that another company can integrate.
It is similar to a wider shift that has already taken place in financial technology.
Many fintech companies do not own every part of the banking infrastructure behind their applications.
Instead, specialised providers supply payments, identity verification, cards, bank accounts and other components through APIs.
Luno is betting that digital assets will increasingly work in the same way.
The customer may never need the Luno app
One of the most interesting consequences of the strategy is that Luno could grow even when consumers are not directly signing up for its retail application.
Imagine a Nigerian bank deciding to allow eligible customers to buy certain digital assets.
Instead of building an exchange itself, the bank could integrate an infrastructure provider.
The customer would remain inside the bank's application.
The bank would control the relationship with that customer.
But another company could provide the underlying technology required to execute and manage the digital-asset transaction.
That is the type of position Luno wants to occupy.
For infrastructure companies, being invisible to the final customer is not necessarily a disadvantage.
If the technology becomes embedded across enough financial institutions, transaction volumes can increase without the infrastructure provider having to acquire every user itself.
Regulation will determine how quickly it grows
Crypto infrastructure cannot expand purely through technology.
Regulation remains one of the biggest factors determining what financial institutions can offer.
In Nigeria, Luno Nigeria received Approval-in-Principle from the Securities and Exchange Commission through the Accelerated Regulatory Incubation Programme, or ARIP.
Luno said the development made it the first global cryptocurrency exchange to reach that stage through the programme.
The approval represents an important step, but it should not be confused with unrestricted permission to offer every possible digital-asset product.
Individual services and products remain subject to applicable regulatory requirements.
For banks and asset managers, regulatory clarity is especially important.
Large financial institutions are generally more cautious than individual crypto traders because they face extensive obligations covering customer funds, compliance and financial crime.
A provider hoping to sell infrastructure to them must therefore offer more than technology.
It must demonstrate that the infrastructure can operate within the rules of each market.
Bermuda gives Luno another regulatory base
Luno has also expanded its international regulatory footprint.
In August, Luno International received a Class F Digital Asset Business licence from the Bermuda Monetary Authority.
The licence gives the company a regulated base outside its traditional African and Asia-Pacific markets.
Luno says the licence supports its institutional and business-to-business expansion, including Crypto-as-a-Service and global settlement products.
Under the licence, Luno International can provide services including institutional cryptocurrency trading, global spot markets and digital-asset wallet infrastructure.
The company sees regulated international infrastructure as particularly important if it wants to serve businesses moving money between different countries.
GTXN strengthens the cross-border payment plan
Luno's acquisition of GTXN provides another piece of the strategy.
Cross-border payments remain expensive and complicated in many emerging markets.
A transfer may travel through several correspondent banks before reaching its destination, with each institution potentially adding fees and processing time.
The problem can be particularly noticeable when money is being moved between countries that do not have strong direct banking relationships.
Luno says GTXN allows businesses to collect and pay out money through a more integrated system while using Luno's liquidity for settlement.
The long-term goal is not necessarily to put every international payment visibly “on crypto.”
Instead, blockchain and stablecoin infrastructure could operate behind the payment while businesses and customers continue dealing primarily in normal currencies.
That distinction could prove important for mainstream adoption.
Many companies may not care whether a blockchain is involved.
They care whether a payment arrives faster, costs less and can be reliably reconciled.
Institutional crypto is becoming a different market
Luno's expansion also reflects how the cryptocurrency industry itself is changing.
The early crypto market was dominated by individuals trading digital coins.
Institutions are increasingly becoming a larger part of the industry.
Banks, asset managers, payment companies and corporate treasury teams are exploring areas ranging from Bitcoin investments to tokenised assets and stablecoin settlement.
Their needs are different from those of a typical retail trader.
An individual may care primarily about buying Bitcoin quickly.
A financial institution needs large-volume execution, custody, detailed permissions, compliance controls, APIs and predictable settlement.
That creates a separate infrastructure market.
Luno now offers institutional exchange access, an over-the-counter trading desk and APIs alongside its consumer business.
Retail crypto is not disappearing
The shift does not mean Luno is abandoning ordinary customers.
Its retail exchange remains part of the business.
Consumers still provide transaction activity, liquidity and a distribution network for digital assets.
Instead, Luno appears to be building another layer above and around the retail operation.
The company can serve individual investors while also selling the technology supporting digital assets to businesses.
That could diversify its revenue.
Crypto exchanges traditionally depend heavily on trading fees.
When cryptocurrency markets are active, trading volumes can rise sharply.
When markets become quiet, exchange revenue can fall.
Infrastructure contracts, settlement services and institutional products could potentially provide additional revenue streams that are less dependent on retail trading activity.
Africa could be an important testing ground
The strategy could be particularly significant in African markets.
Cross-border payments remain expensive in many parts of the continent.
Businesses routinely deal with multiple currencies, limited dollar liquidity and slow settlement between countries.
At the same time, stablecoins have become increasingly popular as tools for holding and moving dollar-denominated value.
Nigeria, South Africa and Kenya are also among the African markets where digital assets have attracted significant consumer and business interest.
That creates an opportunity for companies capable of connecting blockchain infrastructure to local currencies and banking systems.
But there are also major challenges.
Regulation differs from country to country.
Banking infrastructure is fragmented.
Currency controls can complicate international transactions.
And financial institutions will require high levels of reliability before placing important payment or customer systems on third-party crypto infrastructure.
Luno is betting on the plumbing
The biggest change in Luno's strategy may therefore be where it wants to sit in the financial system.
For years, the company built a destination.
Customers opened the Luno app because they wanted to buy cryptocurrency.
Its next phase is increasingly about building the infrastructure beneath other destinations.
A bank could use it.
A fintech could use it.
An asset manager could use it.
A company sending money across borders could use it.
And in many cases, the end customer might never know which infrastructure provider helped complete the transaction.
That is a very different business from simply running a cryptocurrency exchange.
If Luno succeeds, its most important product may eventually be something most consumers never see.