The ways in which commodities and financial assets are traded is being restructured due to technological advances. As of 2025, however, the South African region still relies heavily on commodity trading. The article focuses on some of the key technological innovations and discusses their effects in relation to trading, market access, and safety. Digital platforms alongside blockchain technology have renewed the approach to traditional trading methods.
The rapid changes in technology have impacted financial and commodity markets in the last decade. A report released in 2024 by the World Federation of Exchanges indicates that digital trading volumes constituted an estimated 70% of all market transactions, which is a shift from using physical trading floors to preferring online trading. The transition to South African markets has been triggered due to the rising commodity prices. In addition to the previously mentioned shifts, there are other shifts such as cryptocurrencies or other form of blockchains that influence the selling and buying of commodities. New trader measurements have started to change as well and this article depicts these changes caused by technology across multiple sectors.
The Rise of Digital Trading Platforms
Access to markets comes with fewer restrictions, as online trading platforms have shifted the way people trade. One’s ability to trade commodities and indices has evolved over the years. In the past, traders would engage with physical trading floors or brokers which limited access to certain peer groups and came with a huge financial cost. Online platforms come equipped with up-to-the-minute information, automation of order execution, and various analytical instruments.
For commodity traders in South Africa, the convenience of online trading has unlocked new opportunities for trading in gold, platinum, and agricultural commodities which are vital to the South African economy. These systems make it easy to exchange commodities which in turn leads to a rise in competition from retail traders and smaller companies. Moreover, the commodities trading has been enhanced by the trading of indices, that enables traders to access a wide range of markets without the burden of physically owning the commodities.
The latest statistics show that more than 80% of commodity trading in emerging markets is conducted through online platforms, a substantial increase from 30% ten years ago. Enhanced speed and transparency of trading, a reduced need for intermediaries, and improved efficiency all contribute to this emerging trend. The ability to trade commodities and engage in indices trading simultaneously helps traders in positioning their trades during fast-moving and unpredictable conditions, providing enhanced risk management and flexibility.
Advances in Financial Technology and Market Accessibility
Innovations in financial technology have made it easier to access trading markets, as the reach of these markets has been broadened. Access to markets has been elevated due to the availability of cloud computing, mobile technologies, and advanced analytical tools. In countries such as South Africa, the availability of fintech services has eased the entry barriers, allowing individuals who never had the chance to engage in traditional trading systems to do so.
An excellent illustration is the explosion in mobile trading app availability. They allow users to track the market, manage their portfolios, and execute trades, removing barriers to access commodities and indices trading. In emerging markets, mobile trading accounts for approximately 65% of all trading activities, marking a considerable change from the desktop-based systems.
The introduction of blockchain technology has made it easier for people to access the market due to the availability of purchasing records in a transparent and decentralized manner. In commodities trading, this technology has boosted the level of trust one could have in the system because it reduces the time taken to settle trades.
The trading of agricultural commodities is a good example; with the application of blockchain technology, settlement periods have drastically changed from numerous days to just a few hours. This transformation enhances liquidity and minimizes counterparty risks.
This is also true for South Africa, as the adoption of these technological frameworks are enabling local traders to become more active in international trading. They have access to real-time indices trading, which allows them to hedge or speculate on trades according to the activity in the international markets. This is often done at lower fees and greater clarity than in the past.
Impact of Blockchain and Cryptocurrencies on Commodities
The development and introduction of cryptocurrencies as well as blockchain technology has provided opportunities to redefine commodity trading by adding dimensions such as price discovery, settlement processes, and security measures. Although these innovations are still new, they aims to offer greater acceptance around the world.
A remarkable advancement is the tokenization of commodities, where tangible assets such as gold and oil are digitized on blockchain networks. This method allows for easier transfer and split ownership of assets, improving liquidity and asset access. For traders, specifically in South Africa, where physical storage and transfer of commodities is cumbersome and costly, tokenization becomes a useful tool.
On the other hand, cryptocurrencies provide alternative methods and opportunities for investments. Digital currencies like Bitcoin are increasingly being utilized for international payments due to being more cost-effective than traditional banking routes and avoiding exchange rate risks. This is particularly important in commodities trading due to the constant movement of international buyers and sellers.
Nevertheless, the incorporation of cryptocurrencies and blockchain technology into the commodities market still face hurdles such as weak regulatory frameworks, uncertainty of regulations, and pricing volatility. Multiple jurisdictions are still working on frameworks trying to find a balance between fostering innovation and providing security as of 2024.
In South Africa, regulators are actively collaborating with industry stakeholders which shows a slow but positive acceptance towards the use of blockchain technology in commodity trading. Primary concerns focus on improving efficiency and reliability of trade with reduced instances of fraud, faster settlement times, and enhanced transparency.
