In the second of our four-part introduction to cryptocurrencies, Luno’s Carin Bowman and partner at law firm Bowmans, Bright Tibane, offer some practical steps to acquire your first digital money. It’s easy (click a button) and with fractionalisation ensuring a low barrier to entry (R100), this new investment class is available for all. The duo also shares more of the basics, including advice on which cryptocurrencies are safest for investment, how to safely store them in a digital wallet; and practical pointers to ensure you avoid any crypto scam. Carin and Bright were interviewed by Alec Hogg of BizNews.
Excerpts from the interview with Carin Bowman and Bright Tibane
Carin Bowman on getting into crypto
We call it the ‘penny drop’ moment… For me, I’d been keeping my eyes on crypto for a while and it was quite obvious that this is something that may not be that big in our generation, but it will definitely be the way the next generation uses money. And if I wanted to make sure that my nieces and nephews didn’t accidentally sell off the family jewels, someone in the family would have to learn how to use crypto to help them out. So, I kind of thought, well, it might as well be me and so I decided to get involved. Now it has been almost four years.
Bright Tibane on going into crypto
Generally I am a regulatory lawyer. When it was introduced, crypto was seen as falling under the financial sector and I thought I should cover it as well, because I couldn’t be seen to be a lawyer covering only traditional investment assets. I saw an opportunity for me to come in and expand my practice around this. Luckily the regulators were aligned with my thinking. They are focusing on regulating crypto under the financial sector.
Bright on why Bowmans has shown such interest in crypto
It is changing the legal landscape and we think the world is changing. For us to stay relevant, we have to move. We needed to move with the times to avoid being irrelevant in the near future.
Bright on positive moves towards regulating crypto
It’s important to bring certainties. There’s always been a question of protection, especially of the consumers. There are consumers who will not trade crypto simply because we’ve got no sort of statutory or regulatory protection. And with these new regulations, one knows that it comes with some protection. If there were legal issues before, I would have to go the expensive route: to court. I can now go to the regulator and get help without spending a lot of money. So, for the consumer, things are changing and I’m sure most consumers will now be keen to buy crypto. In terms of players in the market, I think they see it as a positive because there’s uncertainty in that respect as well. Playing in an unregulated space, it’s like you’re not doing it right. However, with the regulations and this light touch licensing framework that has been brought in, it is definitely a positive move.
Carin on what regulating crypto means for the consumer
It’s a good start. When you start having regulation, it becomes a lot easier for customers to know who they can trust because they can immediately look at who is adhering to the regulation and who is not. There is an immediate red flag if you see that someone is not, and you can avoid that company. It also means that customers start knowing where they can go and who they can seek help from. But also, that companies, in order to adhere to regulations, have to abide by certain rules, such as reporting to the financial intelligence agencies and to undergo regular audits and that sort of thing. So, it takes time for all the necessary parts of the regulation to come into play and all the different processes that need to be put in there. But this is definitely the right direction that we’re starting down in order to protect customers’ rights and also to allow other people in the market to start working as well. Now that we have crypto as a kind of registered financial asset and now that it’s regulated – or getting there -, it means that financial advisers can now advise their clients on it, whereas before they weren’t allowed to. So, it opens up an entire new market in that area as well.
At Luno we regard adherence to regulation and our compliance as really a competitive advantage. We’ve seen that very strongly in Malaysia, where we were one of the first to abide by the regulation that was set there. It really ties into our ethos about how we think our customers should be protected and should be treated. So we’re very, very happy that this is finally coming to fruition because it lines up exactly with the sort of work that we want to go for.
Carin on how to buy crypto
As long as you can indicate that you are a resident of the country that you’re registering for, because of foreign country controls, you have to actually register in the country that you are in. So you need to provide basic identification. Then once we know for sure that you are who you say you are, that’s pretty much it. You just need to get some money onto the platform and you can start as small as R10 in some instances, and that’s all deposited onto the platform.
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