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Innovating for impact: A better solution for household water treatment

Two drinking water fallacies are common. Safe drinking water is a problem that has been solved. In an age when your smartphone has millions of times the computing power that was on board the Apollo spacecraft and AI provides answers to complex questions in seconds, it is hard to imagine that 2.2 billion people lack safe drinking water. But they do.

If safe drinking problems remain, they must be in villages. In fact, with population growth outpacing water infrastructure improvements in developing world cities, the resulting urban challenge  is eclipsing the rural challenge.

For illustration, consider Freetown, Sierra Leone. The city’s water supply system was originally designed to serve 500,000 people. The city’s population is now three times that amount, resulting in intermittent service to most customers. Combined with the fact that losses between the water supply intake and customers exceed 45 per cent, the system is woefully inadequate to meet current demands and is falling further behind each year.

Intermittent service is common and one of the primary reasons for the growing challenge of providing safe drinking water to people in cities. Studies have documented that intermittent service results in compromised microbiological quality. Even if the water leaving a city’s central treatment plant is free of pathogens, the microbial quality is questionable when it reaches the faucet. In Freetown, it has almost certainly contributed to waterborne disease: the city experienced nine documented cholera outbreaks from 1970 through 2012, causing thousands of illnesses and deaths.

The story is the same, whether in Freetown, Mexico City, or Laos. Cities face huge obstacles in ensuring the reliable delivery of safe drinking water to their residents and in too many cases, cannot succeed.

Household water treatment is essential to solving the problem

The answer today and the foreseeable future is household water treatment. People collect water from their faucets (if they’re fortunate) or from neighbourhood taps, and then provide their own treatment to deal with the potential of microbiological contamination.

And what treatment approach is most commonly used? Boiling. Some people have electricity in their homes and can use an electric boiling kettle. Many people don’t and they boil their water over an open cookstove, probably using charcoal as the fuel. Even for those with electricity, service has frequent interruptions and they resort to using a charcoal cookstove or simply drinking untreated water for a period.

It’s a health problem. It’s also a climate problem. By our best estimates, more than one billion people worldwide practicing household water treatment do so by boiling. Boiling works. It eliminates pathogens. But it works at the expense of high energy use and high carbon emissions.

Also Read: Funding the green transition: Southeast Asia’s climate tech leaders of 2024

The result is a significant source of carbon emissions: worldwide boiling contributes 107 million tonnes CO2 equivalent per year, which represents about 0.3 per cent of total greenhouse gas emissions. It’s not the largest source, but it’s obviously a meaningful source.

Why boiling? Why not filters? It comes down to money and convenience. Filters can be expensive. The use of household filters often requires two water containers; one mounted higher with the untreated water and a lower one to capture treated water. They produce clean water at a slow rate.

All these factors make them inconvenient, especially if your children are thirsty now and there’s no clean water left. This is a health downside to boiling as well. When the boiled water is exhausted and it’s in the middle of a hot day, the family drinks whatever is available. Inconvenience translates to negative public health outcomes.

There is a better solution than boiling

There is a hopeful solution being developed by a small group of engineers and scientists (and a doctor and even a philosopher), mostly located in Northwestern US. The group has developed a household water treatment product that offers convenience and affordability. They built and proof-tested an early version and conducted field trials in Kampala to garner customer feedback. They are currently seeking funding to finalise a production-ready version and begin marketing it.

The product looks like an electric boiling kettle but instead of heating water to kill pathogens, it uses ultraviolet (UV) LEDs to do the job. When a family has electricity, it only requires the push of a button and a three-minute wait, and there is a container of safe drinking water ready for use (with no delay waiting for it to cool).

If the electricity is out, it operates from a rechargeable battery and can do so for several cycles. Furthermore, because water quality varies from city to city or day to day,  a UV sensor in the product adjusts the treatment cycle to ensure adequate treatment.

Also Read: The water crisis in Asia: How technology can make a difference

As a replacement for boiling, it greatly reduces carbon emissions. It is safer because the risk of children being burned by a fire is eliminated. It contributes to public health because a family can treat batch after batch of safe water throughout the day and therefore is not left to use whatever water they can find. It saves money over buying electricity or charcoal to boil water and with the potential for carbon credits, the cost savings to families multiply.

A problem with a solution

It’s easy to take safe drinking water for granted. It’s hard to imagine that safe drinking water remains elusive for millions in cities around the world. And it’s doubly hard—frustrating—to imagine those truths when there’s an answer such as our UV water treatment kettle so close to becoming reality.

Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

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Navigating fintech innovation: The role of regulatory sandboxes in APAC

Fintech is seeing a lot of change, with new business models constantly emerging and old ones being improved. Regulators need to adapt to these innovations, and businesses need to understand how they work in the real world.

This is where regulatory sandboxes come into play. These are used by a wide range of industries—not just fintech—to test products, services, or business models without being subject to the usual regulatory requirements. The purpose is to drive innovation while keeping risks to consumers and the financial system relatively low.

In this article, we’ll examine some common characteristics of regulatory sandboxes, with a focus on the Asia-Pacific (APAC) region, and determine whether it’s worth participating in them.

APAC’s regulatory sandbox

In 2020, there were approximately 73 sandboxes in 57 jurisdictions; APAC had 19 of them. In 2023, there were 20 sandboxes in the SEA-6 region alone (that’s Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam). This indicates significant adoption of this regulatory approach in APAC.

Source: World Bank Group

Successful fintechs have previously participated in APAC’s regulatory sandboxes. This includes Singapore-based regulated decentralised security token trading platform, DigiFT, which was granted access to the MAS’ regulatory sandbox to become the first licensed decentralised security token exchange. Another example is BondBlox — the first blockchain-based bond exchange, which also participated in Singapore’s MAS sandbox.

Also Read: Sandboxes and diversification: Why the UAE believes in light-touch regulation for AI development

Here’s a more detailed breakdown of the APAC sandbox landscape:

  • On March 12, 2024, the Hong Kong Monetary Authority (HKMA) unveiled the Stablecoin Issuer Sandbox. Participants may include any entity interested in issuing fiat-referenced stablecoins in Hong Kong.
  • On March 4, 2024, the State Bank of Vietnam published a draft decree on a regulatory sandbox for the banking sector, including fintech solution providers. Participants may include credit institutions, foreign bank branches, fintech companies, and other organisations. The specific fintech solutions that are allowed to be tested include credit scoring, sharing data via an open application programming interface (Open API), and peer-to-peer lending.
  • On February 19, 2024, Indonesia’s passed Regulation Number 3 of 2024, concerning the Implementation of Financial Sector Technology Innovation. Among other things, it contains provisions regarding a sandbox issued by the Indonesian Financial Services Authority (OJK). As such, OJK regulations specify that participants may consist of Financial Services Institutions (FSIs) and/or other parties who intend to carry out activities in the financial sector. The covered areas include settlement of securities transactions, raising capital, investment management, risk management, collecting and/or distributing funds, activities related to digital financial assets, including crypto assets, and other digital financial services activities.
  • On April 26, 2024, the Philippines Security Exchange Commission (SEC) issued rules for a strategic sandbox (StratBox) designed to facilitate the testing of innovative financial products and services. The SEC specifies that the “Participant” may be an entity that is “duly registered with the Securities and Exchange Commission and has been assessed as eligible to take part in the SEC Regulatory Sandbox”. The SEC will post sandbox activity guidelines on its website, which will include eligible activities and innovations.

* This list is not exhaustive.

Regulatory sandboxes: Intended purpose

As Darryl Chan, a Deputy Chief Executive of HKMA said, “a sandbox is a box filled with sand that allows children to play and unleash their creativity within a confined space and under a safe environment.” In other words, sandboxes allow businesses to experiment with their new products, services, or business models. This gives them the ability to  test things out in the real world under the supervision of regulatory authorities for a limited period of time.

For instance, the HKMA Stablecoin Issuer Sandbox Arrangement, serves as a channel for both the HKMA and the fintech industry to exchange views on the proposed regulatory regime for stablecoin issuance and facilitate the formulation of fit-for-purpose and risk-based regulatory requirements.

Regulatory sandboxes also help improve a product or service with feedback and speed up integration. Meanwhile, regulatory authorities can identify gaps in regulation.

Here’s how the HKMA and State Bank of Vietnam define the purposes of their regulatory sandboxes:

  • Support the development of virtual asset ecosystem in Hong Kong;
  • Communicate our supervisory expectations and guidance on compliance to parties and/or entities having genuine interest in and reasonable plan on issuing fiat-referenced stablecoins in Hong Kong, with a view to facilitating the subsequent implementation of the proposed regulatory regime for stablecoin issuers in Hong Kong;
  • Obtain feedback from the sandbox participants on the proposed regulatory requirements to ensure that the regime is fit-for-purpose when implemented;
  • To the extent appropriate, develop and promote good practices in key control areas (e.g. reserves management and stabilisation, governance, user protection, AML/CFT, data transparency, etc.).
  • To promote innovation and modernisation of the banking sector, thereby realising the goal of financial universalisation for people and enterprises in the direction of transparency, convenience, safety and efficiency at low cost.
  • Create a test environment to assess risks, costs and benefits of Fintech solutions; support the development and development of Fintech solutions in accordance with market needs, legal framework, and management regulations.
  • Limiting risks to customers when participating in using Fintech solutions participating in trials that have not been prescribed in the legal framework and official management regulations.
  • The results of trial implementation of Fintech solutions shall be used as a practical basis for competent state agencies to formulate and complete relevant legal frameworks and management regulations.

Participating in sandboxes does not mean that participants will be automatically granted a license—or that they are officially recognised or endorsed by regulators.

Also Read: Why Singapore is ASEAN’s sandbox for innovation in healthtech

Conditions of participation

To join a sandbox, organisations should pass an assessment—which, among other conditions, includes the following:

  • Novelty assessment: Evaluates whether the proposed product or service should include new or emerging technology or uses existing technology in a novel way (e.g., Philippines SEC sandbox, State Bank of Vietnam proposed sandbox, OJK sandbox);
  • Usefulness assessment: Evaluates whether the product or service provides benefits, improves services, and adds value to consumers, society, and/or the financial sector ecosystem (e.g., Philippines SEC sandbox, State Bank of Vietnam proposed sandbox, OJK sandbox);
  • Viability assessment: Evaluates whether the organisation has the intention and ability to deploy the proposed services or products after successfully exiting the sandbox (e.g., Philippines SEC sandbox, HKMA Stablecoin Issuer Sandbox, State Bank of Vietnam proposed sandbox);
  • Real interest and testing possibility assessment: Evaluates whether a testing plan with test scenarios and expected outcomes of sandbox experimentation are clearly defined (e.g., Philippines SEC sandbox, State Bank of Vietnam proposed sandbox, HKMA Stablecoin Issuer Sandbox).

For more detailed entry conditions, see the relevant act/regulations/decree.

Conclusion

The effectiveness of a regulatory sandbox depends on three key factors:

  • The extent to which it encourages participation;
  • Whether it actually stimulates innovation;
  • How transparent they are for those involved. This largely depends on open, ongoing  communication  dialogue between regulators and sandbox participants.

For companies focused on developing a new product or service, but need to test a few hypotheses first, a sandbox can be a good option—but only if the sandbox itself is set up properly. Therefore businesses seeking to participate in a sandbox should closely consider whether the three factors mentioned above are properly facilitated.

 

Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

Join us on InstagramFacebookX, and LinkedIn to stay connected.

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