Mmegi: What is the significance of receiving an operating licence to Yellow Card?
Thophego: It has a lot of significance looking at the context of the African market. Botswana is more harmonised for innovations to come and thrive and while many people are in crypto, there are also a lot of scams and Ponzi schemes.
This licence helps us distinguish ourselves from those scams that are coming to take people’s money. It also shows that we are local because you cannot get that licence from the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) unless you are locally registered. In addition, one of the requirements NBFIRA had was that there should be a hierarchy of reporting for clients to be able to file their queries and if we cannot solve them, they should have recourse with the regulator.
Mmegi: There was some sentiment in the market that the NBFIRA had made the licensing requirements too tough for crypto operators. What was your experience?
Thophego: It’s necessary to have the legislation set that high. It was necessary for them to have those standards because while crypto has been there in other countries for a long time, it’s still not a mature industry like banking, where you can say they are stamping out issues like money laundering.
This is a decentralised industry and not controlled by anyone. NBFIRA has to have those high standards because if anything goes wrong, the public will accuse the regulator of allowing people to come into the market and take their money. NBFIRA therefore had to set a strong precedent for operators to come in.
For us, it was challenging but I would not say terribly so because we try to adhere to the highest standards, such as those in the United States where we are from. We follow those standards and when this opportunity for a licence in Botswana came, we were already seasoned and well prepared for that.
Mmegi: What does the award of the licence mean for Yellow Card in the rest of Africa?
Thophego: For the rest of Africa, this is going to show that this is how we do things in our jurisdictions. We don’t just go into a country and not engage regulators. We are not an online company, but we actually engage locally and talk to local people. This will show that even where there are no regulations, we are operating within regulations elsewhere. Botswana is also a place that other countries look and see what happening and they can see that we are conducting business the way it should be.
Mmegi: There is a tendency that as laws or regulations age, those looking to get licensed are able to cut corners or find loopholes to get that licensing with less rigour. Yellow Card is the first to fell the full might of a new law. What is your take on that?
Thophego: For us, we are building a relationship with NBFIRA. The law is new but as an entity that has been in the market, we want to provide insights to NBFIRA so that it can further shape regulations going forward. The regulator needs to know how to better protect Batswana based on the data coming into the market from us as a licensed entity.
Mmegi: From your insights, what is the level of uptake of crypto amongst Batswana and what is the level of interest?
Thophego: It’s a bit difficult to give an exact number but I can say there are more than 40,000 Batswana using crypto or who have tried to use it at some point, as a rule of thumb. However, that’s an under estimate because people use online exchanges which are not Yellow Card, but these are generally the numbers we see in the market.
Batswana are adventurous and when something comes along, they want to see for themselves if it can work or not. We are a risk loving population as small as we are and we really participate in these new innovations.
Mmegi: There is a growing menace of scammers using the promise of riches from cryptocurrency to con people, especially online. All over social media, there are promises of high returns and low risk being offered and Yellow Card’s name frequently comes up as one of the schemes being offered. As a licensed operator with standards you have to adhere to, what are you doing about this?
Thophego: We are working on a large, and in fact that is an understatement. We are working on a massive anti-scamming campaign to boost awareness of what Yellow Card is and is not. Ideally, we would want to totally get rid of scammers but hopefully we can minimise them. We are looking at bringing on more stakeholders for a joint effort by engaging the regulator, influencers and social media presence to achieve this.
When you are licensed, you have an obligation to clean house and the NBFIRA is also looking at what we are doing about these people because at the end of the day, those scammers are using the Yellow Card name.
Mmegi: What are the red flags Batswana can watch out for to get a sense that they could possibly be scammed?
Thophego: One is that Yellow Card is not an investment platform and we do not trade for anyone or give profits to anyone.
Secondly, we do not offer people investment packages like saying invest P1,000 and get P5,000. Once you see someone saying I’m with Yellow Card and you can invest this much and after a certain number of days, you’ll get this much, then that’s a scam.
Thirdly, we do not have any withdrawal fees that say something like ten percent of what you put in should be paid to us. We also do not have transactional charges.
Fourthly, we do not have any agents or traders in Botswana that we can call our agents or people who get money on our behalf.
Lastly, you do not need to pay anyone to open an account with Yellow Card.
Batswana should know that with Yellow Card, you just download the app or sign up on the website. It’s a self-service app and you do not need anyone’s help to do that. If for any reason, you need help, you can always visit our office at Mogobe Plaza, Third Floor in the Gaborone CBD or email us.
In addition, I should stress that the legitimate emails for Yellow Card always end in “dot I dot O”. If the email you are communicating with ends in dot com or dot org or anything else, then it’s not from Yellow Card.
Mmegi: The fact that Yellow Card is licensed could potentially lead some who have legitimately registered on the app, to expect huge returns. What is your response to the need to manage people’s expectations of what crypto can do for them?
Thophego: What we know is that some people buy crypto, especially Bitcoin, for use as speculative assets which they hold and hope the value appreciates. Others use crypto to pay for stuff from international sellers. In fact one of the largest second hand vehicle dealers in Botswana called BeForward accepts crypto for its transactions. Other people use crypto to send money quicker and cheaper to their friends or family.
When you invest in anything, not just crypto, you should be able to do your due diligence. Research the platform that you will use or the asset you want to invest in and find out what the fundamental work of that asset is and why you want it.
As with any other asset, there is a chance of losing money and therefore, you should only invest what are willing to lose.
I have to stress the importance of educating yourself before getting into crypto. At Yellow Card we have a dedicated Yellow Card Academy on the website that gives out a lot of information on how we and the industry works.
I would advise Batswana that before getting into crypto, they spend some time, maybe every evening on the Academy or elsewhere just researching. They can also pop by the office and if they have questions we cannot answer, we can also refer them to the website for further information.
