Financial Product Wrappers: A regulatory home for the wayward BitCoin?

Financial Product Wrappers: A regulatory home for the wayward BitCoin?

Opinion by Seshree Govender, an associate in the Financial Regulatory Practice at Webber Wentzel.

As crucial as BitCoin may be to the growing global financial markets and as much as it may revolutionise concepts relating to payment and economic freedom, its volatile market value, reports of hacking and theft and alleged dalliance with the “dark web” has resulted in the perpetuation of the BitCoin narrative as untrustworthy.

The current BitCoin narrative is attributable to its cyclical nature – people don’t invest in BitCoin because its market value is unstable, and the market value of BitCoin is unstable because people do not invest in it. The lack of demand in BitCoin is partly attributable to an inability to understand its complex technical nature. But BitCoin will continue to remain misunderstood unless there is a demand and increased exposure of BitCoin in the market.

The key to breaking this cycle may be by bringing BitCoin within a regulatory framework to encourage its demand and integration. Whether or not that is likely to happen is going to be determined on 11 March – the day on which the United States Securities and Exchange Commission (SEC) will decide whether or not to approve the filing of the Winklevoss Bitcoin exchange traded fund (ETF) and in doing so, potentially welcoming BitCoin into the financial services regulatory world.

The South African BitCoin narrative was founded in the 2014 position paper published by the South African Reserve Bank. The paper solidified three core principles in the South African BitCoin narrative, namely:

· BitCoin is a decentralised virtual currency and its use, accordingly, is purely to effect a payment system;

· Banking and payment systems regulation does not recognise BitCoin as legal tender and the utilisation of BitCoin operates in a regulatory vacuum; and

· Consumers who choose to participate in the BitCoin market have no regulatory environment to protect them or allow for recourse.

As result, the BitCoin narrative has limited the participants in the BitCoin economy to those who are able to access informative material on BitCoin and have the resources to absorb any potential loss of BitCoin. This is, however, counter-intuitive to the financial inclusion objective that BitCoin advances.

The saviour of the BitCoin narrative lies in finding the right regulatory home. Implemented correctly, regulation could stimulate the demand for BitCoin by legitimising its use and disseminating information about its construct into the market. This increase in demand is essential to stabilising the volatile BitCoin economy and developing more stringent mechanisms of security.

The current South African legal construct of BitCoin is that of a quasi-currency. The concept, use and value of BitCoin in our market is that of legal tender in a peer-to peer payment system, albeit never attaining the status of legal tender. The adoption of the “payment system” label, while apt in 2014, did not account for the ability of BitCoin to grow beyond this – which it has. While BitCoin, paired with the underlying Blockchain technology, creates a payment system exchanging unregulated currency, BitCoin additionally embodies certain economic characteristics that associate it with a different label and maybe a different regulatory home:

· BitCoin has a finite supply and only 21 million BitCoins will ever be mined;

· The supply of BitCoin in the economy is dependent upon the result of mining efforts, and not the issuing of further BitCoin by any entity;

· The minimum denomination in which BitCoin can be held is not 1 – one may own a fraction of BitCoin;

· The percentage of the world’s BitCoin supply held by a particular person is not capable of dilution due to its finite nature;

· Supply and demand for BitCoin is not be dictated a monetary policy; and

· The value of BitCoin is dependent upon the demand for BitCoin in relation to its current supply.

These characteristics largely mimic the economic characteristics of gold and other similar commodities. Value is predicated by demand and supply – not by monetary policy or the ability of any entity to issue more. While BitCoin may operate as a currency on a decentralised payment system, it has economic features that make it an asset, or more accurately, a digital asset. Bitcoin’s inherent economic value is not derived from its worth in relation to another country’s currency denomination, but from its value as a finite asset – the supply and demand of which is extraneous to political, economic and governance polices.

The big question is whether the Winklevoss brothers have the right idea? Is the financial services regulatory environment the home that the BitCoin narrative has been searching for?

Financial products within South Africa are governed by a myriad of legislation, all of which is susceptible to change with the introduction of the “Twin Peaks” regulatory model. The regulatory environment in which financial products operate comprises of two components:

· Regulation that governs the particular financial products in themselves pertaining to the issuing of the product, prudential requirements and requirements to which the structure of such products must adhere; and

· Regulation that governs the manner in which financial products are sold to consumers and traded within the market.

When viewed against the background of the financial product types offered within South Africa, BitCoin, in its digital asset legal structure, would need to only be utilised in financial products that either derive value from or are backed by an asset. The value of the financial product would be linked or limited to the value of the underlying BitCoin asset. Once packaged, the unregulated nature of BitCoin will become framed by the highly regulated nature of the relevant financial product which will change: the way in which BitCoin is accessed; the way in which BitCoin is held; the way in which Bitcoin is traded; and the way in which the inherent value in the BitCoin digital asset is realised.

Integration of BitCoin into financial product wrappers will change the current narrative by legitimising BitCoin through increased use and exposure, and in time, stabilising the BitCoin market by increasing its demand.

The BitCoin economy waits for the SEC’s decision on 11 March, standing on the door step of its financial regulatory home.

by Seshree Govender, an associate in the Financial Regulatory Practice at Webber Wentzel

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Huawei outlines opportunities for growth in emerging markets

Huawei outlines opportunities for growth in emerging markets

Huawei Hall at the MWC 2017 in Barcalona.(image: Huawei)

At the ongoing Mobile world congress, Huawei Technologies outlined its role as an major strategic partner to countries looking to advance economic and social development. The company is committed to creating value for communities by collaborating with operators to help them maximize network assets, deploy home broadband and indoor digitalization, and drive connectivity to enhance the user experience, while promoting economic and social growth of emerging markets mainly Africa.

With the world entering entering a fully connected era, digital infrastructure is facilitating economic growth and emerging markets are on the cusp of a major transition towards digital economies. The Global Connectivity Index (GCI) published by Huawei in 2016 reported that for each GCI score point increase a country improved its innovation capacity by 2.2%, competitiveness by 2.1%, and productivity by 2.3%. Operators around the world are in a unique position to invest in these emerging markets to capitalize on huge ICT industry potential, untapped demographics, and national ICT strategies.

Huawei is committed to helping operators increase efficiency and drive profitable growth by promoting the sustainable development of emerging markets. William Xu, Executive Director of Board and Chief Strategy Marketing Officer, Huawei, explained: “We work hand-in-hand with operators to help them identify valued customers, develop valued businesses, and build valued networks. We enable operators to combine industry policy with the utilization of existing network resources, and integrate technological and business innovation. Our goal is to help operators drive new revenue streams and a positive business cycle of service development and network construction.”

The current landscape has been analyzed in emerging markets to formulate its strategic approach from four angles: user+, family+, asset+, and efficiency+. Rapid deployment of home broadband and indoor digitalization will improve coverage and the user experience. Existing network assets are leveraged to maximize network value and spectrum efficiency, improve O&M, and serve every economic level. Interconnecting all users promotes the development of economy, society, and humanity.

By 2025, it is projected that there will be 2 billion more people with mobile connections, and another 500 million broadband homes and also there will be guaranteed coverage in times of major world events or natural disasters.”

Staff Writer

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Big Data transforming insurance

Big Data transforming insurance

Kelly Preston, data analytics manager at SilverBridge.

The growth of data has changed the way insurers use information. Today, they need to more effectively tap into new data sources to better price their risks and improve customer relationships. Kelly Preston, data analytics manager at SilverBridge, takes a closer look.

“Even though the uptake of Big Data in the insurance industry has been slower than expected, it has certainly captured the attention of many companies that are looking to create competitive advantage in a market that is becoming increasingly fickle. Consumers are no longer brand loyal to an insurer with the wealth of information at their disposal making it easy for them to move between service providers as their needs change.”

Fortunately, Big Data has the potential to create more pro-activity in the industry. Being able to leverage a vast amount of data means the insurer can adopt a predictive approach versus the re-active and responsive nature of the past.

“Just like customers are arming themselves with better information on the various offerings available in the market, so too are insurers able to create more bespoke solutions tailored to specific user needs. The real-time analysis of Big Data brings with it several business benefits such as more nuanced policies, better estimates in terms of customer analysis, and the like.”

Additionally, Big Data makes meeting the ever-changing regulatory and compliance demands of the insurance industry faster and more cost effective.

“Algorithms based off Big Data can dynamically monitor and adhere to compliance allowing insurers to reduce their costs and improve their decision-making. It also enables pricing models to be updated in real-time rather than only a few times a year. This brings with it increased accuracy to individual risk pricing ultimately making premiums fairer and more reflective of that risk.”

Using data means insurers can therefore more accurately price their risk and assess those risks they are willing to insure. However, this could lead to areas where insurers are unwilling to provide coverage and ultimately leads to the question of who will take responsibility for the uninsurable.

“Another issue that bears mentioning is the matter of consent to the sharing of Big Data in the insurance industry. To overcome this, several insurers are offering their customers better base level cover to entice the sharing of their personal data. In this way, consumers can draw direct benefit from providing information to insurers that ultimately leads to the development of better solutions and products across the industry.”

However, says Preston, the opportunities created by Big Data for insurers cannot be ignored.

“In today’s environment, individual considerations are becoming less important and a new dynamic is being created in the way that insurers interact with customers. It is no longer good enough to simply dictate to customers the solutions they need to get. Instead, it is understanding customer requirements better through more effective data analysis to offer them something more suited to their requirements,” she concludes.

By Kelly Preston, data analytics manager at SilverBridge

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New app aims to break language barriers

New app aims to break language barriers

Mundo Chat co-founders Usman Shakeel and Hassaan Shakeel.

Mundo Chat launched this year by two brothers, Hassaan Shakeel and Usman Shakeel is a global messaging app that imagines a world beyond language barriers. The app is powered by 50+ world languages with integrated translation functionality coupled with innovative features to ensure translation accuracy.

Mundo Chat, hopes to breakdown the language barrier and facilitate new, more meaningful conversations among their users that allow them to nurture deeper, long-lasting relationships with family and relatives, friends and acquaintances, business partners and other intriguing minds spread across the world regardless of their native language.

Mundo Chat translation-based products like Waverly Labs and Odle sets it apart from other chat apps. The Back Translation & Reconciliation feature, used in the field of scientific research, is at the core of Mundo Chat’s user experience; tap sent message to see it back translated to ensure accuracy and tap received message to see original text from sender to identify potential issues. This proactive and collaborative approach aims to improve conversation flow and helps resolve any potential translation issues.

The Mundo app is available for downloads on iOS.

Staff Writer

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Netflix boss predicts mobile operators will soon offer unlimited video

Netflix boss predicts mobile operators will soon offer unlimited video


Netflix head Reed Hastings predicted Monday that mobile carriers will soon offer data plans that give users unlimited video streaming to meet the rising popularity of watching TV and movies on mobile devices.

“Ten to twenty years from now all the video you view is going to be on the Internet,” he said at the Mobile World Congress, the phone industry’s largest annual trade fair.

“I think screens today are really stunning, you can see all the depth right in front of you. The beautiful thing is you can watch it on the move.”

While watching video on mobile devices via Netflix and other streaming sites is growing, data caps imposed on plans by mobile operators act as a barrier to users wanting to watch a video on the go.

Carriers offer unlimited data caps but they are usually very expensive.

But Hastings said he believed mobile carriers will eventually create a two-tear system where video data is unlimited to meet the growing demand for watching TV series and movies on mobile devices.

“What we are going to see I think is a number of companies pioneering new ways of offering services to the consumers where it is unlimited video data but it is limited to say one megabit speed,” he said.

“So it is a slower speed but you get unlimited data on that and that turns out to be very efficient on network so an operator can offer unlimited viewing.”

Netflix started streaming TV in the United States nearly a decade ago and has now launched in almost every country.

It ended 2016 with nearly 94 million subscribers, adding five million outside the United States in the last three months of the year.

Nearly half — 47 percent — of Netflix users are now outside the United States, a proportion expected to increase as it adds more customers.

Mobile video traffic is forecast to grow by around 50 percent annually through 2022, to account for nearly three quarters of all mobile data traffic, according to a forecast by Sweden-based telecommunications operator Ericsson.

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Africa Reacts to Oscars Meltdown

Africa Reacts to Oscars Meltdown

Twitter reacts to the biggest fail in Oscars history.

The 89th Academy Awards was held on Sunday the 26th of February in Los Angeles. On Monday as Africa woke up to the news of the ongoing awards in the United States, something had happened that sent the internet into meltdown.

The biggest award of the evening, Best Picture, was widely expected to go to “La La Land”. So, when presenters Faye Dunaway and Warren Beatty announced “La La Land” as for Best Picture the crowd applauded as if their expectations had been met. However, no one could have predicted what unfolded as the team behind the movie took to the stage to receive their Oscar.

A mistake had been made, the presenters had read out the wrong name. The actual winner was “Moonlight”, and in the biggest fail in Oscars history, the team from “La La Land” had to graciously hand back their award and call the “Moonlight” producers to the stage to accept their award.

This sent social media into a meltdown as no one could quite believe what had happened. Here are some of the best reactions from Africa:

The more you hear about the #Oscars stuff up, the more it seems contrived. More than likely La La Land won by votes, Moonlight is better PR.

— The Ronny Sinatra (@RonnySinatra) February 27, 2017

Should I feel bad for La La Land’s humiliation? Maybe. Do I? #Moonlight #Oscars

— Iman Allie (@ImanAllie) February 27, 2017

La La Land / Moonlight / Manchester By The Sea #oscars

— Kenny Everything™ (@KennyEverything) February 27, 2017


The Oscars just pulled a Steve Harvey!!! Moonlight and NOT La La Land won best picture award!! #oscars

— Leanne Manas (@LeanneManas) February 27, 2017

La La Land tried stealing Moonlight’s shine #Oscars

— Sphe (@SpheB_Ngcobo) February 27, 2017


They announced ‘La La Land’ the winner by mistake instead of ‘Moonlight’ #Oscars

— IG: ConceptSixty5 (@Sentletse) February 27, 2017


Wait, what?
La La Land won the Oscar for #BestPicture

Wait a min…#oscars #Moonlight

— Roberto Blizzard (@VeganYogaDude) February 27, 2017

















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Facebook Chief to visit Nigeria, Ghana and Senegal

Facebook Chief to visit Nigeria, Ghana and Senegal

Facebook’s Chief Product Officer in Nigeria to speak at Social Media Week and meet local entrepreneurs and creatives (image: Facebook)

Social Media week in Nigeria kicks off with Chief Product Officer at Facebook, Chris Cox, speaking at the event in Nigeria. The Social Media Week in Lagos will see Nigerian entrepreneurs and content creators discuss the future of media with Cox.
Nigeria, where 8.6 million people use Facebook mobile everyday, is the first stop on a week-long trip to West Africa where Chris will visit Nigeria, Ghana and Senegal to learn about the challenges and opportunities people in the region face so that Facebook can better serve the region’s content creators, entrepreneurs and developers.

Inspiration for content creators at Social Media Week
During his talk at Social Media Week Cox will look to provide inspiration for content creators, the region’s premier new media and social media conference. Cox highlighted Nigeria’s status as a hub for innovation and creativity because of its fast-growing mobile technology sector and its vibrant film and music industries. He focused on how the world is moving to digital video, with formats such as virtual reality, live video broadcast and 360 video giving people new ways to tell their stories.

“Stories matter, whether it’s the stories of our lives or the story of Africa’s growth and ascendance” says Cox. “We want Nigeria’s storytellers — the musicians, the filmmakers, the novelists — to take their stories to the rest of the world. The explosion in mobile video and live video, gives people a new way to share their story and perspective with the globe – and this is happening on Facebook.”

Cox talked about how creators like Femi Kuti are using Facebook to bring fans into their lives and extend their presence beyond the stage and recorded media. He also discussed how innovators like Afrinolly – the creative hub where technology meets art — are using virtual reality and 360-degree video to create exciting and compelling new storytelling formats.

Building on Mark Zuckerberg’s 2016 visit
Chris Cox is the most senior Facebook executive to visit Nigeria since Mark Zuckerberg visited Lagos in September 2016. He arrived in Nigeria last night (26 February) and attended New Afrika Shrine to see Femi Kuti, one of his musical heroes. Femi’s hour long set was streamed via Facebook live to the world and Chris was honoured to be invited to play keyboards for one song.

“I’m looking forward to hearing more about how Nigerian creatives, developers and entrepreneurs are using mobile technology, video and Facebook platforms to create inspiring applications and services for their customers and communities,” says Cox. “The level of innovation we see in this market is amazing. As Africa’s most populous country, Nigeria is an important market for us.”

Facebook accepts local currency payments in Nigeria
When Mark Zuckerberg visited Nigeria, one of the requests he heard was for businesses to be able to pay for advertising and other services in Naira. In response, Facebook has started accepting locally issued Nigerian Naira cards from new advertisers for payments on its ads platform.

“With 8.6 million people in Nigeria using Facebook on mobile every day, Facebook is a great place for businesses to reach their customers” says Cox. “We’re listening to our community of partners, developers, advertisers and content creators to understand what we can build to best serve their needs.”

Starting on 8 March, Facebook will kick off Boost Your Business, a series of free training sessions designed to help thousands of Nigerian small business owners understand how to leverage digital platforms for growth. The sessions will be facilitated by trainers led by She Leads Africa in key cities including Lagos, Kaduna, Abuja, Port Harcourt and Ibadan.

Staff Writer

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Huawei unveils new trendy p series

Huawei unveils new trendy p series

Coming soon to South Africa, Huawei’s new P series debuts new colors and Leica style portraiture.

Huawei Consumer Business Group announced the launch of the new HUAWEI P10 and P10 plus at the Mobile World Congress 2017. The additions to the P series feature a combination of  hardware and the latest advances in software technology. The new phones will feature a Leica front camera, to complement their Leica Dual rear camera.

Richard Yu, CEO of the Huawei Consumer Business Group, said: “With HUAWEI P10 and P10+ we have created a smartphone that revolutionises and redefines portrait photography. Thanks to the evolution of our partnership with Leica Camera users now have an incredible Leica front camera on their Huawei device in addition to the rear. To match this innovation inside, Huawei’s partnership with Pantone Color Institute ensures that the devices are equally as beautiful on the outside. The HUAWEI P10 and P10 plus are smartphones that are as fashionable as they are functional.”

HUAWEI P10’s new Leica Dual-Camera 2.0 and HUAWEI P10 Plus’ Leica Dual-Camera 2.0 Pro Edition, featuring the rear dual-camera set up and Leica front-facing camera, with a 12-megapixel RGB sensor, a 20-megapixel monochrome sensor and enhanced fusion algorithms. Also available in a selection of unique colors such as Greenery and Dazzling Blue Other colourways include Ceramic White, Dazzling Gold – with Hyper Diamond-Cut finish – and Prestige Gold, Graphite Black, Rose Gold and Mystic Silver – with sandblast finish.

The HUAWEI P10 and HUAWEI P10 Plus, to be launched soon in South Africa.

Staff Writer

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Africa's first IBM Tier One partner announced

Africa's first IBM Tier One partner announced

IT infrastructure company IBM has announced that local South African Enterprise Mobility Solutions company, Mobile 1, has been appointed as a Tier One Global Service Partner – the first Tier One Embedded Solutions Partner on the continent.

Becoming an IBM Tier 1 partner allows Mobile 1 to build and sell IBM-based solutions, develop greater consultative selling and solution skills, leading to a greater domination of market share. With this competitive advantage, doors are opened to new and more complex opportunities associated with what IBM refers to as a “Smarter Planet”.

For Mobile 1, this partnership allows it to work directly with IBM decision makers, while garnering the IT stalwart’s full support. “We are delighted to be named the preferred partner to work through, as the first and only Tier One Global Partner in Africa,” confirms Mobile 1 CEO, Brad Fraser.

With a view to ensuring ‘Mobile Service eXcellence’, Mobile 1 sought a mobile device management (MDM) tool to apply to its own MSX product. Having identified the IBM solution as one of the best SaaS solutions on the market, allowing a EMM bolt-on to control its own application, the company became an official reseller. “This enables us to embed our workforce application with enterprise mobility management,” confirms Rachel Keymer, Sales Executive at Mobile 1. “This gives the combined solution tremendous power.”

As a Tier One Partner Mobile 1 is afforded various benefits. The company is now uniquely positioned in terms of the support structure and a more direct relationship with IBM developers. With a full commitment to the IBM solution, the partner receives assistance in terms of technical needs, sales, and access to resources in South Africa, Dublin and the United States. “This translates into the ability to solve problems instantly, offering faster solutions while developing new solutions in line with customer requirements and current gaps”, concludes Fraser.

Staff Writer

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IOTFA announces Polymorph as exhibitor

IOTFA announces Polymorph as exhibitor

IOT Forum Africa 2017 will be held in Johannesburg, South Africa.

Polymorph Systems (Pty) Ltd, a South African mobile development company will exhibit their mobile IoT innovations at Internet of Things Forum (#IOTFA), taking place at Gallagher Convention Centre in Johannesburg between 29 and 30 March 2017.

With a speaker roaster of more than 30 thought leaders, solution providers and key players from diverse industries, IOTFA is set to showcase cutting edge technologies from leading exhibitors and provide insight from world-class speakers sharing their unparalleled industry knowledge and real-life experiences.

About Polymorph

Polymorph Systems (Pty) Ltd creates high-quality mobile applications for the global market. It has been involved in big enterprise system development since 2001 and has been actively involved in providing native and cross-platform mobile solutions to clients since 2009. Polymorph has built up an excellent track record in Fintech, as well as the wearables, IoT, and M2M space. It is involved in the whole product development process, from UX, UI design & development through to product testing and maintenance.

Polymorph Systems works smart to co-create and build mobile and IoT apps and solutions that deliver value for our clients and their customers.

Topics to be discussed at IOTFA 2017 include

  • Emerging IoT Business Opportunities.
  • The IoT revolution: From “Things” to Business Outcomes.
  • Deploying an IoT solution: A strategic overview for decision makers.
  • Creating a suitable framework for IoT integration.
  • Making IoT a reality: How is IoT reinventing the enterprise and consumer experience.
  • Reinventing IT security to support IoT technology.
  • Functional, wearable and usable: The IoT evolution.
  • Keeping pace with innovation: Gaining a competitive advantage with IoT technology.

Confirmed speakers for IOTFA include:

  • Prof Hlengiwe Mkhize, Deputy Minister, Dept. of Telecom and Postal Services
  • Justin Gregory, CIO at FNB Fiduciary
  • Prasanna Kumar Burri, Group Head of IT at Dangote Industries Nigeria
  • Jamie Whittaker, Chief Digital Officer at Discovery Limited
  • Prof Ndubuisi Ekekwe, TED Fellow, Founder, CEO at Zenvus Nigeria
  • Brett StClair, Head of Digital Products Barclays Africa Group
  • Chandima Miyanadeniya, CIO at Aon South Africa
  • Michael Mbuthia, CIO at Kenya Bankers Association
  • Raoul Blingnaut, Technology head at Citi Bank

For more information about IOTFA please visit:

Staff Writer

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