The blockchain-powered mobile banking platform Humaniq is now active in 21 African countries where it offers low-cost mobile banking to the underbanked and unbanked populations. Its app is currently available in Tanzania, Uganda, Rwanda, Ghana, Botswana, Zimbabwe, Cote d’Ivoire, South Africa, Kenya, Senegal, Zambia, Cameroon, Burkina Faso, Guinea, DR Congo, Sierra Leone, Burundi, Republic of the Congo, Sudan, Liberia and Equatorial Guinea.
An expansion into more markets is planned. However, expanding into new African markets is not that easy for Humaniq.
Africa’s Lack of Cryptocurrency Regulations Slows Down Humaniq’s Expansion
The main reason why Humaniq is not active in more markets yet is that the startup has to comply with the regulations in every country it operates in.
From a regulatory perspective, both the blockchain and cryptocurrencies operate in what Humaniq calls a “legal void”. Simply put, there are no laws or regulations that have been established to govern the use of the blockchain and cryptocurrencies in most countries in Africa. For most countries, digital currencies are neither legal nor illegal although there are certain governments that have issued warnings to their citizens about their use to with some countries like Namibia outrightly banning cryptocurrencies.
Another important factor that Humaniq has to put into consideration is being compliant to the privacy and user data protection laws. This is because the Humaniq app, just like any other app you use on your phone, deals with a lot of sensitive information such as biometric identities and phone numbers.
For this reason, Humaniq stated in a blog post that it “needs to be very careful to respect all existing standards for data safety. With that said, we are fully compliant with the recently enacted EU GDPR laws, which can be considered as the toughest user data protection legislation in the world”.
How Humaniq Adds New Launch Countries
Before Humaniq can allow users to use their wallet in a country, it must first whitelist that country. This means that the company has to be 100 percent sure that government of a given country will consider their activities fully legal.
Humaniq went on to explain: “Initially we created a list of 10 countries, chosen according to criteria such as large population size, low incomes, and low banking services penetration. Then, we began searching for local law firms that specialised in the financial sector, requesting a legal opinion on whether our services will be allowed in their country. As mentioned before, the most important factors were the regulations on user data protection and the legal status of cryptocurrency, taking into consideration our emission system as well.”
While this procedure was a set standard procedure for Humaniq, it meant that it had to wait for several months for each country request which slowed their launch operations in any new country. The team ended up adding more countries that they were interested in expanding in and the list grew to 40 countries. Even with more countries of interest, there were countries that the company could still not launch in because either there was no legal clarity or they faced immediate rejection.
Although the team remains hopeful and believes they will be able to solve the problem through additional work, they also acknowledge the fact that it will take more resources and time, especially in Africa. This is because, besides the legality surrounding blockchain technology and cryptocurrencies, Humaniq carried out research to get a better understanding of its users in different African markets and the results revealed that some of the issues facing these markets when it comes to financial inclusion include the lack of a common language, literacy level, no trust and people in emerging markets will generally not use cryptocurrencies for paying for paying for things like goods.
Besides legal issues, there are also other non-legal factors that have to be considered when a business wants to launch into any new market. While whitelisting a country is an easy matter and can take less than a day, getting the citizens to start using your services, however, does not take a day. People will not just use your product because it is available to them. There is a need to run marketing campaigns that combine the use of traditional and digital marketing for each new market separately.
Although Humaniq has picked up the pace for whitelisting new countries and plans to continue the same way, their focus will not just be on the African continent. It is also targeting Asian and South American countries.
“It’s important to remember that Africa is not the only continent with large amounts of unbanked people, and we are excited to be making the jump soon! In fact, the expansion into Asia and America will be somewhat faster, as it’s much easier to find the required information by ourselves, compared to most African countries. We will, of course, keep developing our African presence through providing more use cases and more available countries as well: our eventual aim is to cover all of Sub-Saharan Africa,” the company stated in a blog post.
Emerging Markets More Likely to Adopt Cryptocurrencies from Global Brands, Luno Study Says
A new study by digital asset exchange Luno indicates that emerging markets are more likely to adopt cryptocurrencies from global brands. This finding was collected from a survey called the ‘Future of Money’ carried out between May 17, 2019, and June 7, 2019. The survey interviewed over 7000 respondents from Nigeria, South Africa, the United Kingdom, France, Indonesia, Italy, and Malaysia.
Emerging Markets, the Future of Money and Libra
According to the ‘Future of Money’ survey, the early adopters of cryptocurrencies are likely to come from emerging markets. The findings, therefore, show a close connection between emerging markets and the future of money confirming the view that those with “less appear to take greater financial risks.”
These results come at a time when Facebook recently announced that it will introduce Libra, a new digital currency in 2020. The aim of Libra is to help people make financial transactions online, especially in emerging markets where banks are not servicing the population as well as they should be.
Luno’s CEO Marcus Swanepoel said: “As some of the world’s largest tech giants announce they are launching cryptocurrency coins, we believe developing markets will be the lead adopters. Our research shows that in these markets people are more financially savvy because they have to be, which means that they need and understand the benefits the new coins can offer.”
To further show why the future of money could have a greater impact on emerging markets, data from the survey indicated that 33 percent people in Indonesia are more likely to remain within a set budget compared to 0 percent in the UK.
Additionally, the number of people that establish a monthly budget is 80 percent in Malaysia, 65 percent in Nigeria, 73 percent in South Africa, 74 percent in Indonesia, and 54 percent in the UK. Asked why money is crucial to them, the respondents said it was to secure their families’ well-being (60 percent) and to pay for education. This answer was given by 25 percent of the respondents from Nigeria compared to 8 percent in the UK.
Luno is a global cryptocurrency company headquartered in London and offices in South Africa.
Crypto adoption will probably take place at the grassroots level than at the institutional level, Swanepoel observed. He based this argument on the findings that most people from emerging markets will probably seek financial advice from family, friends, and colleagues than from government organisations.
“It is very clear that if money is not simply a ‘nice to have’ and is vital for your future, then you spend more time understanding it, managing it, preserving it and to an extent being creative with how you maximise the use of it. Therefore, if a cryptocurrency can provide a secure and cheaper means of exchanging value better than the existing system, it will be used. This is why we believe that as new cryptocurrencies linked to global brands are introduced, they will find an important audience in emerging markets,” Swanepoel added.
Luno’s study paints a clear picture of what the future of money could look like. However, certain factors such as Internet connectivity could inhibit the fast adoption of crypto in developing markets.
PIVX Announces Launch of PIVX Foundation at UN’s Blockchain for Impact Summit
PIVX announced the official launch of the PIVX Foundation at the UN’s second Blockchain for Impact Summit held in New York on June 4, 2019. The summit, which focuses on how blockchain technology can be used to drive the achievement of sustainable development goals, was led by the United Nations’ Blockchain Sustainability Commission.
The PIVX Foundation
Bryan Doreian, the PIVX Global Ambassador and Co-Founder of the PIVX Foundation, made the announcement to his fellow delegates during the summit.
“The launch of the PIVX Foundation, an independent non-profit focused on supporting PIVX and the larger blockchain ecosystem, provides a massive opportunity for PIVX to grow. Donors can now leverage charitable contributions (charitable contributions can offset taxes they might otherwise be paying) – AND help support the PIVX ecosystem at the same time. This is a major win for community members who may have been donating to fund projects through PIVX in the past without a charity tax receipt,” he said.
The PIVX Foundation is a registered charity, an extension of the PIVX community, and a component of the SDG Impact Fund, a donor-advised fund in support of UN’s SDGs. The Foundation’s mission is to leverage innovation to create impact.
PIVX is a community-focused cryptocurrency that operates as a decentralised autonomous organisation (DAO), which means that it is run by the people, for the people. The PIVX Foundation will be run in the same way.
The community makes monthly donations when the treasury budget is not enough to cover a project’s needs. Donors will now start receiving tax benefits for the money they contribute.
According to a published statement from the PIVX Foundation, a generous community is presently funding the Foundation and its governance is under the PIVX community. “In order to receive the budget to fund impact development programs, grant applications will need to run through the PIVX Proposal system and be voted on by the community to ensure the SDGs maintain top priority for all funded initiatives,” the statement explained.
The PIVX Foundation is run using the PIVX currency, PIV. This means that donors contribute in PIV to help fund projects. As the first cryptocurrency-driven foundation within the SDG Impact Fund, PIVX has a place at the UN as a top impact technology.
The First Project
The PIVX Foundation will fund the first project in collaboration with Vendible and the SDG Impact Fund. Doreian will be leading this project with the aim of developing a payments processor with zero-fees on transactions, hence eliminating the three to seven percent processing costs associated with traditional online charitable platforms.
“Since the PIVX Foundation is a sub-component of the SDG Impact Fund, it is already taking part in leveraging its resources and insights to help build out some novel charitable donation platforms including the payment rails for the SDG Impact Fund and all affiliated charities to accept crypto donations. All of this will be of incredible use for the philanthropic realms, as well as more tangibly align blockchain with charity, putting PIVX in the central focus,” Doreian elaborated.
The announcement of the PIVX Foundation launch comes after the project introduced an iOS wallet app, an important step to increasing the adoption of the PIVX currency.
South Africa’s Xago Deploys RippleNet in its Gateway to Boost Financial Inclusion
Xago, a money transfer startup that aims to increase financial inclusion in Sub-Saharan Africa, has announced the integration of RippleNet to its gateway.
The Xago Gateway
The South Africa-based fintech company has deployed RippleNet to its gateway to enable local and international fiat currency and digital asset transfer. RippleNet is a blockchain-based global payments network that is made up of payment providers, banks, and financial institutions launched by San Francisco-based Ripple.
According to Xago, the users of its payments platform will be able to access the transfer and exchange of digital assets via the XRP ledger. Additionally, the integration of RippleNet to the Xago gateway will enable customers to exchange the South African Rand for XRP.
“Xago uses the XRP Ledger as a distributed exchange where users can exchange XRP for ZAR,” said Xago.
The Xago gateway provides an entry point to the Ripple Network where customers can enjoy low-cost cross-border payments, instant payments, frictionless transfers, and transparent transactions.
Xago’s gateway is built for businesses while Ripple’s payments network is an enterprise blockchain solution. The Xago gateway acts as a connection between market makers and customers.
How it Works
To register to use the gateway, both businesses and individuals will need to undergo a KYC process. Xago also uses a third-party service provider to ensure that the platform is compliant with the Financial Intelligence Centre Act regulations.
Xago acts as both an issuing gateway and a private exchange with the gateway offering “a way for money and other forms of value to move in and out of the XRP ledger.”
Xago’s withdrawal fees are fixed at ZAR 8.50 while transaction fees vary with market prices. All fees are quoted for customers once an order is placed.
Boosting Financial Inclusion to the Unbanked
Xago said it picked RippleNet for its gateway because the network offers low-cost, secure, transparent, and instant payments to the unbanked, according to a report by TodaysGazette. The move could boost Xago’s goal of increasing access to financial services through technologies such as mobile phones to the unbanked.
According to data from the World Bank, 66 percent of the Sub-Saharan African population does not have access to financial services. However, mobile money is driving financial inclusion in the region with the number of adults holding mobile money accounts doubling to 21 percent. That could mean that mobile phones could be the key to driving financial inclusion in Sub-Saharan Africa.
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