In Centralised Exchanges We Trust?

Ruth Iselema: I think it was very important for us to find out how can we use blockchain to actually solve problems that everyone is facing every day, right? It's not just about on-ramping and off-ramping, or just trading, or doing margin trading, or leverage trading. For us, it was more about how do we build this into use cases of everyday living.

Justin Norman: In today's episode of crypto@scale, we're exploring centralized exchanges with our two guests, Ruth Iselema, the CEO of Bitmama, and Chris Maurice, the CEO of Yellow Card. There's a lot of strong opinions about the role of centralization in crypto, particularly in the aftermath of FTX. Yet, centralized exchanges still provide perhaps the easiest on and off ramps into the crypto ecosystem.

If you visit retailers that accept crypto payments in any African city, they're likely using a centralized exchange as their wallet. In order for us to see adoption of crypto at scale, that approachable user experience really matters. Undoubtedly, centralized exchanges like Bitmama and Yellow Card have an important role to play. Crypto@scale is not investment advice and is for entertainment purposes only.

This episode of crypto@scale is brought to you by Ripple. Anyone who sent money across borders to or within Africa knows how cumbersome, expensive, and slow the process can be. When it comes to remittances, Sub-Saharan Africa remains the most expensive region to send money to. For businesses, trapped capital, slow settlements, and high failure rates pose major challenges. The current financial infrastructure just doesn't work very well for the modern global economy. Ripple believes that crypto-enabled payments can help. Ripple's payment solution, on-demand liquidity, enables organizations to settle global payments in real time, at a fraction of the cost, and without tying up working capital and destination accounts.

By leveraging the digital asset XRP as a bridge currency, funds can be sent and received in local currency on either side of a transaction. Across Africa, Ripple is partnering with local financial institutions and fintechs to bring the benefits of better cross-border remittances to the region. To learn more and get in contact with the Ripple team, head over to ripple.com.

Gwera Kiwana: Here at us today, we've got two CEOs of homegrown crypto exchanges. Ruth Iselema from Bitmama and Chris Maurice from Yellow Card. You both have really incredible founding stories. Chris, I know Yellow Card started with selling Bitcoin in a Taco Bell parking lot. Ruth, Bitmama really started as a P2P exchange. I personally benefited from Bitmama, my first visit to Nigeria when my cards are blocked. Thank you so much for being here today. Ruth, can you tell us a little bit more about yourself and about Bitmama and how you got to where you are today?

Ruth Iselema: Okay, thanks for having me, Gwera, Justin. I always tell this story all the time, but I'm just going to repeat it. For Bitmama, as you mentioned, we started out as a peer-to-peer exchange. But as time went, I think it was very important for us to find out how can we use blockchain to actually solve problems that everyone is facing every day, right? It's not just about on-ramping and off-ramping, or just trading, or doing margin trading, or leverage trading. For us, it was more about how do we build this into use cases of everyday living? That's how we became what we are today. Today, we facilitate crypto cards. That's because of the dollar shortage we're having in the market.

We enable people to fund these cards with crypto, USDC, CUSD, CUSDs owned by Celo and USDT, too, due to its popularity. You could fund your card, or make any blockchain payments with any of the stablecoins via our platform.

Gwera Kiwana: Wonderful. Chris, it's really good to have you here with us today. Please tell us a bit more about your background and an introduction to Yellow Card.

Chris Maurice: Yes. Let me tell you, Gwera, it's much better for me to be here with you. I'm Chris Maurice. I’m CEO of Yellow Card. I guess, a little background to make a relatively long story short and cut out the part about the Mexican fast-food restaurant. I one day met a Nigerian man at a Wells Fargo who was sending 200 bucks to his family. The bank charged him $90 to send 200 to Nigeria. I thought, that seems absurd, right? How could it possibly cost this much?

I talked to this guy and I said, “Hey, have you heard of Bitcoin? It's free. It's fun. It's instant. All this great stuff.” Went home and essentially, started thinking, what is this guy's family going to do with $200 of Bitcoin, right? We've solved the middle of the problem, but then can you buy food with that? Can you pay your rent with it? What are you actually going to do with that Bitcoin when it gets to the recipient?

I'm not sure if I knew where Nigeria was on a map at the time. They don't teach you nearly as much about Africa as you might think they do in the Louisiana education system. I set out to just understand everything that I could, right? I start doing all this research, trying to understand what's the financial system like? What's the banking system like? How do you get Bitcoin today?

While doing all this research, I met a Nigerian man on the Internet, who, look, this is why I say, Nigerians are the most convincing people on the face of Earth. I met this Nigerian guy on the Internet by the name of Munachi. Within about a month and a half of meeting him, he convinced me to go get my passport and take the first international flight of my life to Lagos. I landed in Lagos with no visa, no shots on a six-day old passport, one way ticket ready to party. Yeah, and that's basically how we got started.

Now, we're the largest crypto exchange on the continent. We operate across 16 countries, all in Africa. Yeah, I mean, it's a full, centralized exchange experience, right? You could think of it very similar to a Coinbase cash app, anything like that. Load mobile money, bank transfer, cash, depending on the country, buy crypto, vice versa.

Justin Norman: Yeah, let's jump right into it, Chris. You just mentioned 16 countries. What I think is particularly interesting about Yellow Card is you're in some countries that are often overlooked from an expansion perspective, like the DRC and Congo. I'm really interested just to get your thoughts on and the experience of bringing these formalized on and off-ramps to these markets and how you go about launching, building liquidity and any other particulars of that process of expansion across the continent.

Chris Maurice: Yeah. I wish I had a good answer. The real answer is that it's really difficult and none of these countries are the same. You have to figure it out as you go along. I mean, for DRC specifically, right, I had to live in Kinshasa for about two and a half months, while we were setting up, working with lawyers, working with banks, all of that. Yeah. I mean, that's just the reality, right? I think, if you want to expand, basically, anywhere on the continent, you need to dive in. You need to be there on the ground, working with people.

In most African countries, stuff still doesn't really get done over Zoom, right? I mean, Nigeria and South Africa and some of the bigger tech countries and bigger economies, it's getting better. In most other places on the continent, nothing still happens over Zoom, right? It all has to happen face to face, right? You have to go there. You have to show up, talk to them. I think, I mean, that's one thing that I noticed early on. I mean, we started in Nigeria. We built a business that was working and doing well in Nigeria.

We noticed early on that there's an opportunity here that I think most people are missing, which is that the continent is a lot bigger than just Nigeria, right? The continent is a lot bigger than just Nigeria and South Africa, or just Nigeria, South Africa and Kenya, right? Which are the three countries that everybody looks to. Yeah. I mean, we started looking just outside of those, right? The first country we launched after Nigeria was actually Botswana. Botswana, South Africa. We did, basically, all of SADC. We got into East Africa, then we started doing Francophone.

I can tell you, that's also how it goes in terms of order of difficulty. Southern Africa, East Africa, the Francophone is just a whole other level. Yeah. I mean, it's really just a matter of going there and trying to understand the market, right?

Gwera Kiwana: Ruth, we'll come to you. Bitmama started out as a P2P platform, and it's still core to what it is today. You've since grown to a more traditional centralized exchange, offering various amazing things, like cards as well. I'm curious to hear more about why, from a user experience perspective, why is it important for Bitmama to have become an exchange?

Ruth Iselema: Okay. What basically happened with the whole building of Bitmama was that being a peer-to-peer exchange, we also, as at that time, we had players – I think there's this company that just recently closed down. LocalBitcoins. Yeah. We had LocalBitcoins, we had Remitano, and these guys were already the players in the space. I would say, most of them had first mover advantage.

For us, it's fundamental. I wouldn't say just for us. For every crypto startup, right? It's very, very important. You have that either on-ramp, off-ramp, you have that exchange feel, right? I've recently seen a couple of people trying to build out other crypto products. When I'm like, okay, hey, you need to partner with either an on-ramp, off-ramp, or you build yours. It's like, hey, everything is not about trading. I do understand that, but the fundamental importance in that crypto really needs is on-ramp, off-ramp.

For us it was important we keep that exchange, or maintain that exchange to be able to allow users to on-ramp and off-ramp seamlessly from whatever, either currencies, or cryptos that they want to do. For me, I feel like, in the whole crypto ecosystem, on-ramping and off-ramping is the most important infrastructure that should be there. Yeah.

Gwera Kiwana: I think, it's important that you've touched on the on-ramp and off-ramp, I think being able to move in and out of web3, or crypto seamlessly is really important. There's also some other considerations that are, I mean, the underlying thing there is trust. I want to touch on some things regarding centralized exchanges, especially in the wake of FTX and SVB. How are you thinking about things like security, proof of reserves, regulatory compliance, especially in markets in Africa where the regulator will shut you down first and then ask questions later? Also, liquidity. What are you guys thinking about these things? We'll start with you, Ruth.

Ruth Iselema: Yeah. I just want to say this year, right? Please, it's a people problem, or it's a passing problem. It's not a crypto problem. Because everyone is looking at it like, “Oh, it's crypto, because it happened to FTX.” It's happening with banks. Banks are not crypto. They are traditional players. How do you want to explain that something even was done crypto, or with FTX happened with SVB and they are trying to link SVB to crypto, because they used the bank crypto companies, but that's not what basically happened here. It's like, I think it's a people and a process problem that's happened internally.

Even though people like FTX, or SVB, or even Binance, today, they won't show proof of reserves and all that. If anything was going to happen, it should be both people process. I think they said, there are three piece; people process and there's one other one. Yeah, but I think that's the fundamental problem. It's not a crypto problem. It's not traditional banking problem, but mainly people and process problem.

Gwera Kiwana: Absolutely. I think, Chris, I want to come to you and maybe if you can explain to us briefly what proof of reserves is, and also, how Yellow Card thinks about building trust and considers trust as a centralized exchange.

Chris Maurice: Yeah, yeah. I think proof of reserves became a hot thing after FTX, where crypto exchanges need to be able to prove that they actually have the coins that they say they have in the wallets, right? I mean, I guess, the background to that would be FTX, obviously, was doing a lot of shady, I don't know if I'm allowed to curse. They were doing a lot of shady stuff with all that money that people were holding with them. It's like a bank. Once the money's on a centralized exchange, you don't really know what that company is doing with your money. Similar to a bank, similar to any other institution that you have to trust. Obviously, yeah, proof of reserves became a big thing after that.

I would say that a lot of exchanges have released proof of reserves. I think that proof of reserves are no better than not having proof of reserves, if you're going to do it the way that Binance did it, for example. What Binance did is they just showed everybody, “Hey, these are our wallets. Look at all this money that we have in our wallets.” But that doesn't tell me what the customer liabilities are. If they have 50 billion dollars sitting in wallets and customer liabilities are a 100 billion dollars, well then, they're still under water, right? Even if they have 50 billion dollars. All they did was prove they have money. They didn't prove how much customers are actually trusting them with.

I mean, to an extent, the only way to really do proof of reserves with a centralized exchange is, I mean, essentially the way that like a Coinbase does it, or like a bank does it, which is through an auditor. I don't know that there's – I mean, look, I mean, there's certainly a lot of cryptographers out there that are a lot smarter than me when it comes to that. I just don't see a way for a centralized exchange to prove how much it actually owes customers, without you having to trust that that number is real, right?

I think that that number, in a sense, needs to come from some sort of trusted third party, right? I mean, frankly, I don't trust Binance if they tell me, “Well, we only have 50 billion dollars of customer liabilities.” Yeah. I mean, from that standpoint, I think proof of reserves – look, it's good that the industry is trying to be more transparent, but I think that there's still a little ways to go.

The approach that we've employed is reminding people that you shouldn't be holding your money on centralized exchanges in the first place. That's coming from somebody that runs a centralized exchange. I don't hold my money on centralized exchanges and neither should you. Look, I mean, it's sure, if you have your money with us, it's safe, obviously, but there's no benefit to us of you having your money with us. It's just a pure liability on our balance sheet. It's not like it benefits us if you hold the money with us. As far as I'm concerned, it'd be great for you to put it into cold storage if that's your plan.

Yeah. I mean, I think the other thing that I would say is for Africa specifically, the type of customers that we have and the type of transactions that we see lend themselves a lot more to customers moving the funds relatively quickly. Whereas, I think with a Coinbase in the US, if I'm buying Bitcoin on Coinbase, it's probably because I want the price to go up. Most of our customers are not buying Bitcoin, they're buying USDT, they're buying USDC. They're buying stablecoins, because they want access to the dollar, and so they're using it for some purpose. They're moving it around. I mean, we have people that hold their money with us, but it's a very minuscule amount compared to the amount of volume that's happening on any given day.

Justin Norman: Yeah, Chris. I think what you're talking about here really gets to the heart of this overall discussion about the trade-offs between centralization and user experience and the trust that's in the equation, or perhaps the lack of trust that exists right now in the ecosystem. I find that encouragement of self-custody is really, really interesting for you guys. I think, you've also talked a lot about education, and I know Yellow Card has an academy, and we hear so much about crypto education. I'm curious just to get your perspective on how realistic it actually is it to expect novice users to self-custody, and I guess, it depends on use cases, but to what extent do you view this education and user experience pieces are a true barrier to mainstream adoption as well?

Chris Maurice: It definitely depends on use case, and it depends what you're trying to do, right? If your plan is that you want to use a centralized exchange and then hold your money there for a day and then move it off tomorrow to pay a bill, then I mean that's fine. If your plan is I want to buy Bitcoin as my life savings and hold it somewhere forever, then you shouldn't hold it with any company. You should hold that money yourself. Yeah. I mean, I think that is definitely something that we encourage.

I mean, in terms of how realistic is it, I think that – I mean, we've seen it with blockchain.com, Trust Wallet, and some of these other – how do you say, decentralized wallets and self-custody wallets that have become extremely popular on the continent. I mean, blockchain.com has over 15 million users in Africa. Trust Wallet is doing really well on the continent now. I mean, we've seen it. I think, obviously, a lot of it comes down to user experience at the end of the day. If we're providing a better experience than a self-custody wallet, then people are just not going to use the self-custody wallet, for better or for worse.

I think certainly, it's about always improving that user experience, from the self-custody side. How do you make that easier? Then it is also about education. Yeah, I mean, again, though, I would say that generally, the people that are holding money with us for any significant amount of time, right, I would say, significant, let's call it one week plus. Anybody that's doing that, it's generally a more educated customer. They have a little bit of extra cash. They're trying to save money. They're holding against inflation, that kind of thing. For the rest of our users, it's more just, “I need to make a payment. I need this money now. I'm giving you my money, I need the money back.”

Justin Norman: Yeah. And Ruth, just sticking to the topic of use cases, you talked a bit earlier about stablecoin virtual cards and I know, just considering the nature of offline markets, you guys have built features and innovations like QR codes for offline onboarding. I'm curious to get your perspective on this user experience question and this idea of what else needs to happen, the challenges and opportunities related to wider crypto adoption and these markets in question.

Ruth Iselema: Yeah. For wider crypto customer adoption, I think something I'm leaning into recently is due to the fact that you don't maybe necessarily need to know about crypto. I'm leaning more into, like I said, use cases. Can you be able to use your stablecoins to do remittance from, say, Nigeria to South Africa? Or can you be able to, like vice versa? Because currently right now, I don't even think there's any platform, or traditional play of really attacking that situation. I'm just looking on leaning more into that.

Also, for us, what we had to do is we had to talk to our customers a lot. What's the average customer like? How do they behave? How do they think? That's where we build those experiences into our products, right? How are they moving to? That's another question we recently said, asking ourselves. We are now looking at building all those experiences, all those use cases into our products. Not necessarily just spinning out products year and day, but making the user experience and the features better for the user themselves to be able to adopt crypto seamlessly, without any hassle, or without having to go through so much education.

But like Chris said, I'm happy they have a crypto education platform, where you're running something about crypto education, because at the point we had to ask ourselves, are we going to do this? Or are we not? Are we going to build the education into our products? Or are we not going to do that? We instead resorted to partnering with people that are already doing this education drives, rather than taking it up ourselves. That's what I'm saying. Kudos to Chris, because I think that's also another hard part. Because if you also look at the African population, we are still struggling with, let me say, 5% of the African population. Well, 5 billion, or 5% of us knows what crypto is and know the use cases, know how to adopt it.

That leaves us with over another billion people that don't even know what a Bitcoin address looks like. Or them seeing a Bitcoin address is costing a lot of complexities and a lot of problems in their head already. The question is how can we get these people to adopt this, even without going through that process? Or, we take that process through a three-step, or a seven-step, before they can now be doing this every day and then it becomes seamless to them. Those are a few challenges that is happening. I'm pretty much confident that over time, adoption will definitely pick up on this other 95% that don't yet know what crypto is.

Gwera Kiwana: All right, so let's change gears a little bit now and look to the future. Having laid out the current challenges that we face in crypto, I think we all want to see mainstream adoption of cryptos. Like we say, crypto at scale. What is it going to take and what role should centralized exchanges play in this equation? Ruth, you touched on the education that Yellow Card has done on their website and we've said before, every single layer one, or crypto native company out there claims education, they have an education page. Chris, what do you think is the future of education in this space, other than blog posts and help tips in the app?

Chris Maurice: Yeah. Look, I mean, I think when we think about crypto at scale, at least in the context of Africa, I think that especially for the time being, people on the continent have a lot more to gain from crypto, from the underlying use of crypto, than they do from actually knowing what crypto is. I think that education is important for the long-term, right? I think that everybody should be aware of the technology. People need to be aware that there's alternatives to banks, things like that, right? There's alternatives to local currency, etc., etc.

When we really think about how does it reach scale in the near term to medium term future, it's really happening not directly through crypto. It's happening through businesses. It's happening through, I mean, fintechs. It's happening through, basically, anything outside of banks. Obviously, Ruth can explain this a lot better than I can. But, I mean, if I have a Naira card in Nigeria, the banks, it used to be $20, or it used to be a $100, then it went to $20. Now most banks have just shut that off completely, right? You cannot use your card internationally for anything if you live in Nigeria. What are your options, right?

Well, you can go to the bank, fill out a bunch of forms and then pray to God that Mephi approves it. Even if you were personal friends with the president, that would still take a couple of months to get done. When you're in a country where there's just not a lot of access to foreign capital, take, again, Nigeria, Kenya now, right? Malawi. There's a number of examples. Then you don't really have a lot of options outside of crypto. This is the first technology that actually allows you to be able to access something that is valued and – I mean, with stablecoins paid to the value of foreign currency, and then be able to use it however you want.

How does that start? It starts with, like Ruth said. It starts with crypto cards. It starts with things like that, where people don't necessarily care about the crypto. They care about making the payments. If somebody can load Naira by Bitcoin and then use that on a card to make a payment, then fantastic. I mean, it starts with companies. I don't want to necessarily call anybody out, but every major fintech that you can name on a continent is benefiting from crypto in some way, shape, or form, whether it's for treasury management, or for powering the products that they're offering to retail consumers.

Yeah. I mean, I think that's the big thing, right? I think crypto at scale and crypto adoption in the short term, short to medium term starts with businesses, fintechs, etc., offering these products to the retail market and using crypto on the backend and abstracting that crypto layer, making it easy for the user. Then over time, and again, this is why we spend time and effort and money and everything on education is because over time, as we look long-term, people should be aware of this technology, right?

It's great that everybody can benefit from it, without the knowledge, but everybody should also be aware of it for themselves, for their future, for their children, etc. Yeah. I think it starts with businesses, but long-term, it needs to be individuals. It needs to be self-custody. It needs to be things like that.

Gwera Kiwana:  That's a really good answer. Ruth, on what Chris has mentioned about fintechs and companies, private businesses driving adoption now, Bitmama has done a phenomenal job, I think, in driving adoption using UX, first of all, and then providing a solution to users that they didn't have, for example, the card that you offer. Chris mentioned how Nigerian bank issued card does not let you, for example, pay for Starlink, or pay for AWS. Whereas, the Bitmama card allows people to actually open them up to unlock a lot of the world to them. Besides that, what do you think is going to be the avenue for greater adoption of crypto in your users and really, at large?

Ruth Iselema: Thanks so much. We'll continue to do more work for adoption. It's just like, also Chris mentioned, the next step for adoption is the average consumer, is the business, is even the governments. We basically just had our elections and now we have petitions everywhere. No one knows who is going to actually even be the president next. This could have been easily solved if we use blockchain for our elections, or we're able to incorporate some form of blockchain to be able to make sure that no one can hinder any of the results, and the true results are actually public and shown, and it's immutable.

I think that that's the next step for adoption. Now, we have those of us that the earlier adopters, we all know what crypto is right now. Now, how do we take it to the everyday user? Like Chris said, we also have a couple of fintechs currently embedding fintech crypto products, or using crypto on the backend, like web2 front, web3 back model to be able to facilitate certain transactions that power their platform. Those are a couple of things that we will be seeing very soon. But I guess, I'm more excited about businesses, because if businesses are able to adopt the whole crypto, stablecoin payments easily and seamlessly, then I think it will also push the user's side to be able to also drive more adoption.

Justin Norman: Is there anything else that you guys wish to see happen to further our collective objectives? I think we're talking around this question of regulation. Do you think better regulation would lead to greater uptake? Chris, I've heard you talk about banking partners, but Ruth, maybe I'll start with you on the Nigerian context, I suppose, because the current banking regulation is what's driven greater adoption of stablecoins and stablecoin cards. How do you think about these sorts of questions of regulation, banking partners, other things that could lead to wider adoption, or that people believe should lead to wider adoption?

Ruth Iselema: Okay. Basically, with this, we've seen a couple of lobby groups, and I'm sure, I and Chris, we are a part of some of these lobby groups, where we are trying to get the government to put effective regulations, but that do not strike full innovation. Because sometimes when regulation comes, it comes with strike full innovation, and then we are not able to see the benefits of why we even needed regulation in the first place.

What I see is basically going to happen is maybe, hopefully, especially in the case of Nigeria, a new government coming might either change the stance of how blockchain, or how crypto is being used in the banking system. There is most likely going to be strict AML laws for crypto companies, or crypto exchanges. Also, maybe disclaimers. Or even taxing users that will be using these exchanges to facilitate crypto transactions. But, I guess, these are also the things we are trying to beat back against, because if you do so much of that all at once, then you are going to strike full innovation. Most startups, or more companies that are going to come up and build something more innovative.

You've already killed them from day one, with the regulations. It means, those companies cannot even come up in the first place. I think most times, what we've also seen is that Nigeria, saying this as I’m in Nigeria, yeah, they mostly take the whole wait and see approach. They've been looking at what's happening in the US, what's happening in Europe, what's happening in the UK with crypto regulations, the whole central bank digital currencies. I think, if South Africa also takes the first move, definitely Nigeria is going to pick up a team or two from then. I really, really feel like, they're most likely waiting for either the US, or Europe to do some regulations and they pick some learnings from there, and then be able to adopt it here.

Then again, this is back to the problem of struggling innovation, because what works for Europe or in the US most likely might not work for Nigeria, or South Africa. Because for us, we even have every reason to adopt the blockchain, because the real use cases are being enacted in Africa. For US and the rest of them, the real use cases are not being put there, but there's also a way the US government is going to regulate their own crypto environment that may not be favorable if the same thing was to be done in Africa. I would say, we are all like our government now. We are doing wait and see approach.

Justin Norman: Chris, what do you think? Is it regulation, better banking partners, other things you wish to happen? I know you guys are regulated in Botswana, I believe, so maybe that's your answer, but what do you think?

Chris Maurice: Yeah. Well, I pray to God that African regulators don't learn anything from the US about crypto. Yeah, I mean, look, I think regulation is somewhere that I spend still a decent amount of time and that our team spends a good amount of time on, is working with regulators across the continent. Obviously, we have the crypto license in Botswana, we have licensing for C-Mac.

What I would say is that from the midpoint of last year, we saw a sea change, or a tide change, where I think before that, there was a lot more skepticism, there was a lot more hesitation, there were a lot more circulars about how crypto was bad and things like that. Since then, since the midpoint of last year, we've seen just a lot more openness and a lot more actual progress. Having, for example, in Nigeria, the SEC has now put out guidelines for crypto licensing. Now, I mean, there's infighting between the SEC and CBN over how to exactly make that work, but there are guidelines that exist, at least in theory, in Nigeria on how to license it, how to regulate crypto. There are the licensing regime in South Africa, is supposed to come live on June 1st. Again, June 1st, we'll see.

South Africa has in theory now, announced a crypto license. Nigeria has now, in theory now, announced a crypto license. Yeah, you're going to continue to see more and more countries coming out with that. Right now, CEMAC, and Cameroon specifically have legislation going through that is pretty crypto-friendly. It puts formal regulations around the space.

To Ruth’s point, though, there's a give and take, right? The battle is between how do you regulate the space and make it safe for everybody, but then also continue to encourage innovation and make sure that new companies can actually start up, right? Obviously, to use an egregious example, in the US, if you wanted to start Coinbase today in the US, you'd be out of luck. Completely out of luck, because, number one, Coinbase exists and you'd have to compete with them. If it weren't enough to compete with somebody that has 8 billion dollars more than you, then you also have to put up with the licensing restrictions in every state, across the country and all of that. It would not be possible to start Coinbase today, again, in the US.

That's where it comes in now with Nigeria and with South Africa and everything. Some of this waits to be seen how it actually goes to market. I mean, in Nigeria, at least the initial proposals were around a $500,000 deposit to acquire the license, which look, I mean, we can do that and I think there are other companies on the continent that can do that. But for somebody that wants to start out tomorrow, that's not feasible. They don't have half a million dollars to deposit and you're not going to be able to raise half a million dollars –

Ruth Iselema: Just to deposit.

Chris Maurice: - to start out. If it's all going to go – yeah, if it's all going to go to the Nigerian regulators. That's not exactly what investors are looking to give you money for. Yeah. I mean, that's the thing that I think we still work with regulators to encourage them on is look, this industry is providing a lot of value for the country. It's not only is it bringing money in, but it's enabling the economy to continue to function, even during an FX shortage.

With that in mind, with the amount of jobs that it's creating for young people and things like that, the question is, how much do you want to stifle this industry, right? Of course, the flip side of that is that Nigeria and South Africa both just got graylisted again for money laundering. That's the flip side that both of these countries also need to show that they are doing a lot when it comes to anti-money laundering, when it comes to anti-terrorism financing and things like that.

Gwera Kiwana: I want to just, sorry, cut you off and quickly briefly explain what graylisting is. I think a lot of listeners may not understand. Graylisting is really something that's enforced by the Financial Crime Action Task Force, a global entity that basically decides who and who is naughty with regards to financial crime and anti-money laundering. South Africa and Nigeria being on the gray list is a huge deal, because that now – I mean, there's a block list and then there's a gray list and then everyone else. Being on the gray list means that there's more scrutiny and more, I guess, controls in place to monitor the flow of money in and out of that country within that country as well.

It trickles down to businesses and people in how they're able to do KYC. Know your customer, making sure that they can identify who's onboarding onto their products. It trickles down into the ability to do trade. I want to just highlight that. It has a huge blow on the region. I see one at that point to be lost. Thanks for mentioning that, Chris.

Chris Maurice: Yeah. I think the other interesting thing is that FATF and IMF are both pushing pretty hard on graylisted countries. One of the requirements that is pushed is you need to have formal crypto regulation, because crypto is a potential avenue for crime if it's unregulated. There needs to be formal crypto regulation. I think with that in mind, because that's – I think, that’s why we really were able to get the licensing regime pushed through in Botswana was because Botswana was on the gray list at the time.

I think now with Nigeria and South Africa both having been graylisted, I think that, yeah, it makes it more likely that we'll see crypto regulation. The question now, just becomes how friendly can we push for that to be?

Justin Norman: Chris, just a quick follow up to that point as well. Do you guys foresee a scenario where when assuming there is regulation in place and leaving aside how friendly it is for a second, could regulation be an unlock as well? I mean, are there institutions, for example, who would rather be moving money in and out of stablecoins, but are choosing not to, or doing it quietly because there's not regulation? I know, I think we're always concerned about it's definitely innovation, but is there – the other side of the coin, which is that it could actually be an unlock once some clear regulations are in place.

Chris Maurice: It's really hard to say. I think, look, I mean, we talk to companies all the time, where it's, “Oh, yeah. We do this. But crypto is a non-starter and we don't want to do anything with crypto. We don't want to touch it.” I mean, look, frankly, I don't know. The way that I see it is like, you either see the benefits of crypto, or you don't at this point. I don't know that regulation is really going to be that big of an unlock. Maybe for a couple of companies that are just really, really risk adverse, maybe it's possible.

I mean, to give you an example, the SARB, Reserve Bank of South Africa put out a circular relatively recently saying, “Hey, banks should work with crypto companies. Banks should actively be opening accounts for crypto companies and facilitating crypto transactions and things like that.” I can tell you, that has not helped one bit with our banking in South Africa. The banks that don't want to work with us still don't want to work with us and the banks that want to work with us are still working with us.

Yeah. I mean, even with clear directive from the Reserve Bank that yes, you should bank these companies, it hasn't really unlocked anything. Because again, I think the people that don't see the benefit of it and the people that are going to miss the boat are, look, the boat’s in the process of taking off, so either jump on, or stay on shore for a while.

Gwera Kiwana: Thank you. We, honestly, I think we could go on and on. This topic is so interesting and you two are just wells of depth of knowledge, really, not only of crypto, but of the markets in which you serve. Thank you so much.

Guys, we’ve come to the end of the show. We want to ask for our guests for one to two recommendations, sources that they recommend our Crypto@scale community to learn more, or what gets them excited about crypto. We'd love to hear your recommendations. Ruth, we'll start with you.

Ruth Iselema: Definitely, I would recommend – I don't really have one top of my head right now and that's crazy. Because, previously, most people just go to, well, I say, is it coin telegraph? They had a crypto one-on-one cost on coin telegraph. How most of us learn is basically, via community, so if you have the right crypto community. We don't really do education, but we have a Discord group where you can join, where you can talk to others on the group and ask a few questions. Definitely, someone is going to answer your questions and put you in the right path. Yeah, top of mind, that's for me. Yes, also download our platform. It's easier to use it.

Gwera Kiwana: Thank you. And Chris.

Chris Maurice: Yes. Do recommendations count as financial advice?

Ruth Iselema: No disclaimers.

Gwera Kiwana: No. This show is not – nothing said on this financial advice. So, please. Yeah, go ahead.

Chris Maurice: Great. Well, in that case, buy Bitcoin.

Justin Norman: Not financial advice.

Ruth Iselema: Yeah. You're missing the sign. You're missing the sign. Put the sign, buy Bitcoin.

Chris Maurice: My non-financial advice recommendation is to buy Bitcoin. I think, I mean, in terms of resources to learn more, obviously, I'm biased, but academy.yellowcard.io is our education portal. We have everything on there from basic financial literacy, non-crypto, how do I save money on an irregular income, all the way up to what is DeFi, right? How does one inch work and things like that. The whole gamut of crypto education on there.

I think if you're looking for books, if you're looking for topics outside of mainstream news platforms and everything for crypto, I'm a big fan of Andreas Antonopoulus and some of the work that he's done. I think that's a really great place to start. That's where I started when I first got into crypto and first was trying to learn about it. He's fantastic. He's put out some great works. Yeah.

Justin Norman: Cool. I think, let's wrap it up there before you give any more non-financial advice recommendations. Chris, Ruth, thanks so much for joining us. Where can also people besides your recommendations find out more about you and your companies? Ruth, where can people learn more about you and Bitmama?

Ruth Iselema: Oh, I would say we are everywhere. That's all the social media channels. We are on Twitter, we are on LinkedIn, Facebook, Instagram, too. You can learn more about us. Or you could just simply Google about us and I'm sure you're going to find a couple of articles. You could also go through our blogs. We do write a couple of topics, or industry topics about crypto and certain things people can do to be able to secure themselves, or be able to do better in the crypto ecosystem. Those are the places where you can find sense about us.

Justin Norman: Thanks, Ruth. And Chris, what about you?

Chris Maurice: Yeah. I think, Ruth's got a big benefit there, because if you Google Bitmama, everything comes up.

Gwera Kiwana: That's so true. Ruth is Bitmama.

Chris Maurice: That’s about it. When you Google Yellow Card, you just get a bunch of football results. Yeah, I mean, yeah, yellowcard.io. Yellowcard_app on pretty much every social media.

Justin Norman: Great. Well, Ruth and Chris, thanks so much for joining us. You can find more about us, crypto@scale on Twitter @cryptoatscale. If you enjoyed this episode, please do hit that follow button on your favorite podcast app and share with a friend or colleague who you think may enjoy it as well. Thanks for listening and we'll see you next time. Thanks, guys.