Crypto Regulation ‘Should Be Combined With Education’ Says Top Wadzpay Executive – Interview Bitcoin News

The collapse of Do Kwon’s Terra empire in May, and Sam Bankman-Fried’s FTX in early November 2022, will be remembered as two events that put the crypto industry on the back foot. It is now widely expected that regulators worldwide will use the two events to justify the establishment of regulatory regimes likely to stifle further innovation. Despite this, a Singapore-based blockchain payments company, Wadzpay, has partnered with Saudi Arabian fintech Geidea to offer financial solutions for pilgrims on their way to Mecca.

Provides a ground-breaking payment experience to visitors

Faced with the inevitable, some players in the crypto industry argue that tougher regulations are not going to stop cryptos and their underlying technology – the blockchain. They point to how digital currencies have been instrumental in lowering the costs of transferring funds within and across national borders. According to this view, the ease and speed of moving funds across borders is another key feature that makes digital currencies and the blockchain an indispensable part of modern payment systems.

It is these and other attributes of digital currencies that maintain their appeal even as regulators look to crack down and some crypto companies are looking to find or expand into new markets and niches.

For example, Wadzpay, a Singapore-based company that operates an interoperable blockchain-based payment ecosystem, has partnered with Saudi Arabian fintech Geidea to provide a “groundbreaking payment experience” for pilgrims traveling to Mecca. Khaled Moharem, president of Wadzpay for the Middle East and North Africa (MENA), explained to Bitcoin.com News how the company’s partnership with Geidea enables Hajj pilgrims with e-money wallets to better manage their spending.

In addition to highlighting the impact of the two firms’ payment solutions, Moharem, a longtime financial professional, also shared his views on topics ranging from the FTX collapse to regulation of the crypto industry.

Bitcoin.com News (BCN): Recently, it was announced that your organization had teamed up with a Saudi Arabia-based fintech, Geidea, to provide future Hajj pilgrims with what was described as a ground-breaking payment experience for the visitors. Could you start by explaining why and how your payment solution makes things easier for Hajj pilgrims?

Khaled Moharem (KM): Thank you, yes, the partnership will support digital payments for the pilgrims. In line with Saudi Vision 2030, the partnership is created against the backdrop of the Saudi government’s goal of hosting 30 million Hajj and Umrah pilgrims by 2030.

The annual Islamic pilgrimage to Mecca is considered the world’s largest gathering, attracting around 2.5 million pilgrims in 2019 (according to Statista) before the Covid-19 pandemic triggered global shutdowns. According to Mastercard’s latest Global Destination Cities Index, Mecca, the holiest city for Muslims, generated approximately US$20 billion in tourism dollars in 2018.

Currently, pilgrims face high fees when making traditional payments or withdrawals abroad or need to carry cash, which is not practical for long pilgrimages. The combination of Wadzpay and Geidea’s solutions seeks to provide these pilgrims with e-money wallets to enable better spending management with payments supported through the security of the blockchain.

Our solution ensures that pilgrims can load their wallets in their home country and can fully enjoy their pilgrimage without having to worry about handling fiat. They will save on fees while enjoying a seamless payment experience.

BCN: What prompted you to create a solution that uses blockchain?

KM: Our partner, Geidea, has more than one million POS [point-of-sale] terminals across Saudi Arabia; we see this as an opportunity for pilgrims to make payments without currency or network restrictions. Blockchain is a secure, distributed ledger that keeps a decentralized record of every transaction; the technology can significantly improve collaboration and simplify processes. Combining the reach of Geidea and the nature of blockchain technology leads to an incredible opportunity.

The pilgrimage market is an important part of the Saudi economy. This move will unlock great SME business success for merchants across the Kingdom and make the payment experience for pilgrims faster, safer and traceable. Through the power of blockchain, we can also improve the seller’s bottom line through fast settlement and lower fees.

BCN: What does Wadzpay’s proposal to use blockchain to facilitate payments reveal about the capabilities of the technology in the Kingdom of Saudi Arabia?

KM: Saudi Arabia is trying to accelerate its digital transformation. The central bank has looked into blockchain-based transfers, as has the Saudi Arabian Monetary Authority. The applications of blockchain technology in various important [areas] are limitless: whether it is logistics, oil, education or public services.

We believe that there are blockchain use cases that have a direct impact on P&L [profit and loss] and can solve many existing business opportunities in the kingdom.

BCN: The crypto industry has largely had a bad year – Terra/Luna and recently the FTX crash – and some believe this is affecting adoption momentum. Others believe that the worst is yet to come, and that unless the industry is strictly regulated, more users will fall victim to crypto scammers. Do you agree that the industry has yet to see the worst?

KM: We are very much in favor of regulation. Regulations set clear guidelines for how to operate and help limit fraud.

BCN: Do you agree that stricter rules will make crypto much safer for users?

KM: All industries need “bad sheep” at the top of regulation, it is important to have education to avoid falling victim to various schemes. Regulation should be combined with education (just like in the world of fiat currencies, it is important to be aware and not put your money at risk).

BCN: In your view, how can the industry recover from the damaging impact of both Terra’s and now FTX’s collapse?

KM: The year certainly had some negative events (as well as many positive developments). As a company, we ensure that we avoid some of the risks that may exist in this sector. For example, we use asset-backed stablecoins, unlike algorithmic coins like Terra/Luna were.

Similarly, to reduce risk, we ensure that client funds are held with insured custodians rather than on exchanges. This ensures safety and accountability.

At the end of the day, blockchain is a technology while crypto is just an application of it. While pricing may be affected by volatile digital currencies, we believe this transformative technology and its broad adoption will prevail. We always focus on the technology, not the speculation.

What are your thoughts on this interview? Let us know what you think in the comments section below.

Terence Zimwara

Terence Zimwara is a Zimbabwean award-winning journalist, writer and author. He has written extensively about the economic problems in some African countries, as well as how digital currencies can provide Africans with an escape route.