A New Era for Financial Inclusion with Web 3.0

Transcript

okay maybe we kick it off um so hi everyone and and thanks for attending this uh this panel today organized jointly by the crypto Valley Association and and tournet uh my name is arkana kin and I'm I have both hats so I'm the co-chair of the western chapter of the crypto Valley Association um based here in Geneva Switzerland and I'm also a co-founder of torenet um so today uh we are here to deepen dive into this broad conversation of uh blockchain and financial inclusion and

um I won't uh I won't repeat what said in the invite so uh what I'll propose is that our panelists will introduce themselves and tell us about their background and what they're doing before we dive deeper into the subject and uh with that uh Lucia with you take the floor please for a thing thank you first of all so much for having me especially on a topic that I care so deeply about in terms of background this is actually an issue I've been working on since I'm eight um and I started reading textbooks about when I was 12. so this is very much up an alley of personal passion and

professional passion for me um I've worked in the public sector before I entered the text base and I specifically specialized in economic trade between Honduras which is my home country and one of the poorest countries in the Western Hemisphere and Canada as well as issues around undocumented immigration and people that sort of Flee for economic reasons so it is an area that I have a lot of experience in on the ground and from a like public sector perspective and then in 2014 started working in artificial intelligence um and that sort of led me toward the tech space and in 2016 I decided to marry my experience in Tech with my

prior experience on Lifetime passion on development and economic growth and started my current company which is called emerge we are a lab that designs experiments that mix sustainable development objectives with Innovation and Finance in order to support our clients in driving more ESG or sustainability oriented Innovation so we're kind of like upgrading social Innovation strategies for our clients and we've been doing this work since then uh it's you know well known for the work that we've done in digital identity and financial inclusion for clients like the United Nations development program or governments or private companies like hard rock International and then some of our own Innovation as well which we do

in-house currently some experimentation with energy with you know Community Development in accessing cryptocurrencies and or some of our work in the nft space for environmental action so a little mix of everything there and then in my spare time I advise different types of projects that work within these sustainable development space so it's something that I care very much about um it's a pleasure to be here especially with my fellow panelists who I will allow introduce introduce themselves now second I have someone going next yeah uh thank you so hi everybody thank you for coming

there's an apology I got stuck on the traffic and that's why I'm doing it for my phone and not from my computer uh that said I started my journey in cryptocurrencies around 2014. I started from a community currency trying to allow communities to launch your own currency later I worked on the product team of Banco with them we did a project in Kenya for Community currencies later I co-founded good dollar which is a protocol for Universal basic income active today in 180 countries mainly in Nigeria Vietnam Bangladesh and Indonesia if I remember correctly at the moment today I'm a GP in floor Adventures Flory

is a VC investing in the intersection of impact and blockchain we see two the most the majors like problems of humanity today being the climate crisis and financial inclusion the lack of financial inclusion so we invest in those two sectors that's me great thank you to America Dr Ken hi I'm Ken halabi I um my journey to this point took me through um technology basically I got a masters in computer engineering from Europe I've been to several different uh countries many countries where Financial equation

is a challenge that's you know that's of course where I started I also worked at Accenture back in Nigeria and working as a consultant a process and Technology consultant I was able to see a lot of the problems that existed both in the financial industry and the banking industry and problems with financial inclusion uh following that I got a doctorate in engineering finite with numerix and that Journey took me eventually to the defense industry uh dealing with a lot of international companies in problems related to finance Insurance technology and then of course

with Payment Systems right now I work a lot in payment systems I advise a lot of companies on financial inclusion and I'm of course very excited about toront which I also helped uh to to found um tolerance is is very exciting because we have been able to see some of the problems related to the current blockchain infrastructure and solutions that exist out there many of them are not making your roads and we were able to identify some of the problems and kind of fashion something that works from the point of view of the communities that actually

need it because a lot of those things were developed with not with those communities in mind and some of those things will be talked about and addressing all right thanks uh thank you uh all of you for for being here today and um we uh we came up to this sort of we came up with this topic because you know it's it's something that concerns us a lot uh Dr Ken and our colleagues but also because I think it's it's interesting because you know there's a lot of talk around blockchain because it's such a general use technology it affects so many verticals so many places um and sometimes we sort of you know get

lost in some of the rabbit holes in there um but I I really believe that the the topic of financial inclusion is a fundamental one for blockchain uh or call it web3 yeah call it uh different names and um so yeah it's a topic that's been covered for many many years in blockchain of course but um at the same time uh we don't really see uh necessarily a mass adoption among hundreds of millions of people who are concerned by this topic so maybe to launch the discussion I'd like to have your thoughts on uh the why like we do believe that it's a great tool but

reality shows us that maybe it's not as used so what do you all think about that it's okay okay um so I think unlike many of the other technologies that we see today that I'll adopt the ways that's their say AI for the sake of the examples and other disruptive technology is coming into play uh the target audience of blockchain technology is a places where economy is not as stable or so gently as in Western countries but the adoption

curve usually counts for early adopters which are usually people who have let's say the spirit capacity to experiment with new technologies so um for the sake of the example I would assume for example would be mainly adopted by the high-tech industry the high tech industry has no action need in a new economy because it's mainly based in Europe the US uh like North Asia where the economy is mainly stable so in terms of a target audience of this

technology it's not going after uh the target audience that is always the first adapter and where it does you will see the actions like the more speculative actions of like nfts Etc unless the actual infrastructure used to rebuild the economy so that's like my first stop on the subject yes yeah I mean I'd like to maybe take a couple of steps back and start off with like some of the key lessons that I've learned through all my through my years of experience here uh the first one is that I think there was always an assumption at least in the early narratives around blockchain that there

was some kind of causation relationship between cryptocurrency and financial inclusion and that was done obviously because the potential exists but there is regardless of the technology there is no causational relationship between technology and impact just because you have technology doesn't mean that it's going to be inclusive or impactful it doesn't mean that adopting or enabling some kind of Technology will automatically lead to some kind of net positive impact in fact sometimes it could be the opposite through an unintended consequence and so it's I think it's super important to to realize that you know we haven't really been able to live up to this notion that you know blockchain and financial inclusion belong in the same sentence and a big

reason for that is because unless we are very intentional and thorough in the way that we design for financial inclusion it is not an automatic consequence and a big example of that is you know the fact that a lot of web 3 projects today look eerily reminiscent to traditional finance and traditional banking services and products and a lot of platforms to enable the purchasing of cryptocurrency have the same requirements that a Traditional Bank would require in relation to kycaml so how much Financial inclusion are you able to really deliver when the process and mechanisms by which you are designing even though you're using blockchain still look like the

traditional sector that has historically excluded you know over 3 billion people from from itself right so number one is this idea that that there is no causation relationship and we have to be really thoughtful and realistic about the ways in which we adopt blockchain and then embed Financial inclusion within that which I think is super important and I think the second uh bit of it is a lot of the assumptions around what Financial inclusion means and very often in our case we presume that being financially included means being able to access services in the way that we currently access services but when I say we I mean anyone who's financially included so you know we want to design these kinds of things that are like credit scoring for people that don't

have a credit history or we want to design some kind of of service or savings account or investment opportunity that looks like what it looks like for everyone that is in the financially included segment but the reality is that a lot of the reasons why so many people around the world are not currently included is because they don't even earn money in the same way actually the majority of the world especially post-pandemic is an inconsistent income earner and when you look at the way that credit is even structured it depends on income stability which most people around the world today don't have and so when you start to think about what inclusion means and you just start from the perspective that they need access to the things that the current Financial system offers that's your first assumption that might lead to some

unintended consequences around exclusion because you don't need the same kinds of products sometimes and actually in some cases there's even a disincentive to participate in a formal economy because it leads to higher taxes or more regulation or things that they simply either aren't interested or are unable to meet as a threshold so when we as assume that inclusion looks like what we experienced today and we don't consider the needs and the actual life experiences of the people that are currently financially excluded and then open up our minds to design products and services that don't look like anything that we have today I think that's when we have a chance at actually creating forms of inclusion that meet the needs of people that want that you know should

inherently want to adopt this but don't because we don't meet their needs and we design for ourselves rather than designing for what these lived experiences might be like and so I think that the combination of making assumptions around the tech inclusion uh being like one causational and then the assumption that inclusion looks like what we currently have in place for ourselves I think both of those together make it really difficult to have wide sweeping inclusion in a meaningful way and in a way that incentivizes mass adoption Lucia you make great points and before uh stepping uh Dr Ken before you step in I just want to say like please the social scientist in me so much when you

take a step back and analyze the concepts that we use to talk about this this is the I think perfect entry point and tomorrow as well you said you know you're talking about communities and target audience Community is a word that we use a lot in web3 but I feel like depending on where you are in the world um we might not understand the same thing when we say community as in online crypto communities or real life communities and and and and Lucia stepping back to questions of the way we structure uh and how we think about financial inclusion what it actually means and what are the implications of the way we think about that uh in our trying to forward that agenda uh it's a really good way to to jump into this

question Dr Ken what are your thoughts yeah and like you said this could not be a better panel to discuss this because I mean my the two other panelists are working in areas where they actually can understand this issue right I liked how uh Lucia uh let me frame this around the informal economy right wow this is important everywhere over even here in the United States the informal economy is a growing one but it's not a predominant one in many of the areas and communities where we're talking about the informal economy can be a really dominant one right and I like how to print this around uh Financial inclusion for the underbanked and the important

important thing is the blockchain community actually does kind of they feel they see this tune right like Thomas said this the the breakout into Mass adoption into rural utility for manual blockchain projects it's not going to come through many of the countries where financial services are prevalent the need isn't as much here right we might be the the department I mean the in the Forefront of trying out many of the Technologies charge GPT yeah I mean it's going to be a lot of people from the United States from Europe that's going to try to charge your BT out blockchains is a lot of people from many of these countries that's buying

crypto not from those people who need it but yet the financial the blockchain industry has always identified and said look this thing should be used to address the unbanked and the underbanked but then what have they done about it what has anybody done about it right because it's not it's not really expanding or growing right and those are some of the things we're going to talk about what are the actual specifics what is what is what are the things that are basically hindering adoption uh in in you know in communities where there's a lot of One bank and on the bank people don't have access to financial inclusion I'm going to prompt some of that by saying that some of the reason why there's no Financial inclusion is that

many of these tools were not built for these communities I mean take an example like Lucia said about crisis current uh when there's a community where credit scoring doesn't exist how are you going to bring the same traditional Financial inclusion models for financing into those communities it fails and so you have a huge opportunity Gap right when you actually go to some of these communities you've and you identify real cases and instances of individuals and organizations that need financing that and are able to deliver on those financing right you see a huge gap you see about 80 to 90 percent of viable financing opportunities that are

not met why are they not meant some of it could be because of lack of credit scoring some of it could be because of the lack of you know the consumer protections that would allow uh institutions and places where there is the financing to be able to take that risk so some of those things are things that blockchain can address right with specificity in such a way that financial industry cannot yeah company yeah we just sorry we just uh there was a message on the Q a that just note like said that okay good if you saw it that's great yeah thank you no problem I think yeah there's this

something that like to follow up on that conversation so I let's say you said something about the fact that you shouldn't be designing the same tools that we designed for the actual system but from my experience when 2014 15 16 17 all I tried was redesigning systems like let's reinvent stuff that we haven't found ourselves like that haven't touched the financial system in order to touch Financial inclusion but I remember in Bangkok if people don't know Bangkok was the first automated Market maker

and funny thing about Banco it was never invented as automated Market maker it was invented out of a problem the inventors of it were like yeah Herzog and gallivanzi and I was walking for them and we were doing community currencies and we needed a solution for liquidity and I can talk about it for hours about the liquidity problems in small currencies uh between the currencies and and that's how it came to play it was a pure mathematical solution and I remember when the other startups started doing the same thing they came up with the world automated market makers and we as a coming from the team who like invented it

had to research well what do you mean by automated marketing it's like oh like we've been invented Market making in this in this process and many times by trying not to do something you find yourself being inventing and existing Financial tool so I wouldn't say you that you need to totally detach from the existing Financial tools just need to reinvent the same Tools in a way that are accessible and fit to the um new or not to the new to the Social and financial structure that fits to the

global South so we don't disagree I think it's a very case-by-case situation like there are instances where absolutely an adopted version would be helpful there are instances in which you can start from scratch and there are instances in which you need to give them access to exactly what everybody needs in the case of for example something that holds back you know 1.2 billion 1.3 billion people from being financially included is that they lack digital Identity or any kind of identity right identification documents 1.2 to 3 billion lack identification documents now this is something that they absolutely need in the same structure that we currently have we who are included currently have because there are certain guarantors that a legal identification document brings with it

that every single person on this planet needs there are certain things that don't need the same kind of structure and so an example of this some of the work that we've done in Uganda actually relates to land titling and when we first got approached by the government to issue Land Titles you know we were told we need to give them Land Titles but the reality was really no right because what do they actually need they don't need the land title they don't need to hold on to this land title what they need is the ability to have a verifiable proof of ownership and of productivity on their farmland and so does that need to be a land title no not necessarily it can actually be something that they might have only encryptors for and then they provide those encrypters to the person that actually does need to

verify the land title which would be the service provider and so when you think from the box perspective of people need a land title you're preventing yourself from creating a mechanism by which really what you need is verifiability and those are two very different forms of inclusion and Innovation one of which is much easier to mass adopt in areas of low-tech adoption or low-tech literacy so I think you're you're right and saying there are many instances in which you need to take the existing structure framework compliance Etc and adapt it to what works in the in the social economic and cultural context of where we're trying to innovate but I think in many places and in many use cases we are actually like detrimentally holding ourselves back from thinking a little

bit more openly about what is possible in relation to what is feasible to adopt within the context of of you know the places that are excluded in in more ways than one and I think that's a prime example of it I mean I think again this is something that tethers very much to assumptions I think that people design based on a lot of assumptions which is very normal because obviously you have to make these like sweeping assumptions of a population segment or so on but I remember in 2017-18 [Music] 17. I was living in New York um and we were trying to work on financial inclusion and identification documentation for undocumented immigrants and we were making a bunch of assumptions in relation to you know the

amount of Reliance on Western Union and MoneyGram and platforms like this and eventually we were hitting a couple of walls and we weren't sure what was going on so I actually spent three months myself as an undocumented person living in New York under the table trying to figure out what are these invisible barriers that we're just not factoring in because you could make assumptions that people that lack access to bank accounts use platforms like MoneyGram or Western Union but there were a couple of things that were quite interesting for example there is a and I don't know how many people know this but there's an arbitrary number that Western Union and MoneyGram set and this number can change depending on their own company policy it's not a number set by any regulator but it's a number and if you receive more than that number or if the amount

that that was sent in the home current currency converts to even a penny more than that number actually the person claiming that money will receive a check not cash and receiving a check is a huge problem because they won't be able to cash it anywhere and so I did run out of money I asked my parents to send me money they sent me money it converted to four dollars more than that amount and I was handed a check that I could not use and so I ended up keeping the money in a track until I was like I got off this kind of experiment which obviously is a huge place of privilege to even have it as an experiment But ultimately these kinds of assumptions that you know the system has to be a replica of what includes everybody else is something that's not can detrimentally will just

back so I don't disagree with you but I think that there's some Nuance there in that we need to have a very thorough look on a case-by-case basis on a market segment by market segment basis and innovate in response to that and and I think that that's really where a lot of us as an industry kind of falls short in in that just one thing the Czech Story the financial system never stops surprising me with how horrible it is thank you for that story it was awful I was a girl in my 20s in New York undocumented and I had to find money and I couldn't use this check and I had this check in like my possession the entire time and I just couldn't use it it was the worst and then the day I

finally checked it I was like you know at this point I almost like it there was so much emotion attached to being able to catch that check but I couldn't for you know almost two months and so I had to figure out I ended up working at a bar that weekend and got paid under the table to make up for it but it was just nuts nuts and it's something you don't know because it's in their terms and conditions in tiny font and you don't know until you're in that position and then what do you do you can't get you can't send the money back and then you can't cash the money you can't cash a check I tried Clearing Houses I tried Banks I tried like informal uh places and everyone needed some kind of ID and I didn't at the time obviously was

locked away so I didn't have anything so so really it's you know we really don't know enough about people's lives until we've lived a mile in them and that's also a question on like inclusion from the build side right is like who is building all of these Solutions and are they all like Stanford grads that you know never had to struggle with this kind of issue and if that's the case then like well that's mistake number one too Dr Ken you're on mute so I like um what you guys both touched on right now in terms of Reinventing right and this is a key point to to what's in our topic right if we try to just apply the traditional Financial models to many of these communities uh on the uh on the bank and on Bank

communities we can see that many of it will fail and that's precisely the reason why they are not recording breakthrough 10 say I mean take the example that you gave Lucia or the example with credit scoring if we say all right fine the reason why there is financial inclusion is not happening and people are not receiving the financing even though they're clearly viable is because there's no credit scoring and we try to just import wholesale the credit current system it isn't going to work and that's why it hasn't been done so for those communities one has to actually reinvent and design things that work for them and that's some of the things that blockchain has an advantage in being able to create right and also in conjunction with some of the Technologies coming out like AI which

can in the absence of a traditional credit score model is able to actually tell a model uh instances or and determine viability you know and put those things to to models in such a way that works right and you can have on chain history that shows like you know this individual indeed has you know this uh this verifiable uh I mean tools and resources that can make them be able to to be efficient in utilizing financing let me give an example of a project that actually we have on that platform like which is an agricultural project right and this project takes actual farmers who verifiably have land have a history

of you know of planting and and and you know creating food and you know food and and then being able to distribute that right and traditional models go through you know agencies like United Nations agencies African Development Bank right and there's sometimes High default rates and many of those Traders National models they're trying to look at ways to make this more efficiently efficient so that it actually reaches the farmers that are going to produce real crops and you know increase food production one of the things that they try now is ensuring that everyone has taken the game and that takes us back to something that Thomas prostate you you actually have many of this farmers who are also

members of the communities they're part of the of the of the project you know some of them might have tokens in the project but in addition instead of having somebody say look we're going to go do verification and it's very expensive because someone has to go to rural areas what about instead of having tokens give useless yield and you know and people are shuffling tokens around that don't do anything have the incentives from the talking be from the community very fine you know and saying this idea the farmers and these are the lines they have it's cheaper the community has a vested interest in you know in getting it right because then their token values goes up food is produced so there's a lot of things that blockchains and smart

contracts afford that the transition Financial system can never do so talking about Reinventing that's where technology begins to become powerful because it's being used for real useful purposes to create things that actually is able to serve in some of those communities in a way that the financial traditional Financial models could never ever touch with uh there is a sentence from like old Lucia that really relates to what you said right old one said like if you ask people what they want you will end up with the Fester horses always because that's what people want and and I think innovators many times do the same mistake right they're like oh people want a faster

Hall so I need to build them a festival but no like you need to invent the cow in that sense and and I and I totally agree with like with that the fact that it's about looking down at the problem and not down at uh at how they do the same solution just on blockchain the first the first uh show on TV was uh two guys on the radio um and it was the same video show just on TV so they started the show by saying now we're on TV and that's a bit about like how the blockchain world feels today there's many people doing exactly same as we did before just on chain um so leave the unexual to decide a

little bit like you mentioned the farmers doing I think the verification is literally one of the strongest points that I'm excited about the social verification so in my mind the like and if everybody anyone in the crowd is building that come to me investor happy to hear about that um verification right so if in Bitcoin we see permission as verification of transactions on chain and people are capable of earning their Bitcoins for that if we will manage to create a system that allows to verify the actions that we want to see right so it could be

if we talked about credit score it could be about paying back loans if we talk about Farmers it would be about ownership of land if it's about identity it's about social verification of identity the the idea of social verification of things is I believe will be one of the biggest implementations of blockchain just no way of like saying how much I agree with what you would mentioned I think I'm also excited about the traceability element of it and part of that is Tethered to the like ability to analyze just how much impact is actually being accomplished in terms of money uh flows right one of my uh favorite things

to draw attention to are the is like unintended consequences that uh happen as a consequence of not mapping out the entire money supply chain when designing a project so an example of this is right now um and actually for the past few years there's been a lot of different projects that are super keen on giving communities some kind of token reward or you know income whatever um that is like usable within that Community adopted within that community and this is particularly interesting because a lot of these communities are very self-sufficient or they Source everything they need quite locally and so unless you've traced the money supply chain there could be a lot of unintended consequences here so let's say for example that we are a village here uh my

fellow panelists and I are available Village and Dr Ken you are the paper supplier of this Village and I'm a big fan of like paper-based to-do list it's like a one bad habit that is not environmentally friendly that I can't shake off but um you know I need paper on the regular so I go to Dr Ken and I decide I need to buy some paper now if we're using you know we we've had this like project in place where we're receiving tokens and and income and and you know this is fully adopted within our little Community here and I go to Dr Ken and I buy my paper using this token amazing I walk out with my paper and I feel great my need is satisfied now Dr Ken here has a situation does he Source it from within the

community does he make it himself or does he bring it in from another community and if he brings it in from another Community if that Community also uses that token he's fine if there's a way for them to swap that token then he's fine but if this community is in isolation in this project and no other community accepts this kind of token then Dr Kenneth stuck with a bunch of money he can use within our community but he can't Source more paper unless there's a route for him to get real Fiat or something of the other community in his Source you know actually accepts and so maybe it wasn't financially inclusive project for me but it certainly isn't financially inclusive for Dr Ken now presuming Dr Ken you know gets his paper from Tomer then again we

have no problem Dr Ken goes to Tomer Tomer grabs you know the currency gifts Dr Ken the paper which I buy and then that same problem is transferred to Tomer and so when you are designing for financial inclusion and you don't know the entire money supply chain of who on Earth on the supply chain is the one person that gets screwed if there is no way to swap or there is no mechanism by which they can actually interact with the real the world then the limitation of your financial inclusion is very visible within that person and it might have a negative unintended consequence to them and so I think when it comes to really what a value proposition might look like in addition to this

verification that Tomer brings up is this idea of traceability and in understanding how far down the line does money really flow and where are the bottlenecks and what kinds of solutions do we have in place from our perspective as Builders to mitigate that experience for either Dr Kenneth or Tomer who are going to face the consequences of being in an insular you know token economy within this community and I know that community and tokenization are often brought together as examples of financial inclusion potential for blockchain but the reality is that unless we've thought about these unintended consequences and designed to mitigate against them then ultimately the financial inclusion that we're promising to deliver again falls short so I think it's a really interesting

experiment that all of us and in the audience who are kind of you know trying to build for good projects to Trace that money supply chain and figure out where the bottlenecks are because that's really like steps forward and how we can design more financially inclusive and it's something that blockchain can help so much because of its traceable record and because it's a way for us to ensure that we're designing properly and being mindful of all of the people that directly or indirectly sort of touch the solution and the ways that they would experience inclusion because of it it's funny one thing that I don't know if you understood that but a new example you reached the understanding of how automated Market materials was literally invented that was exactly how it was invented I will add another thing to it

this module it is inclusive to inclusive to do a non-liquid community currency all Community currencies that are not liquid usually end up with an inflation because printing money inside the closed economical system is basically doing a mini Venezuela um so yes like very like it relates a lot to a story experience that on my own flash so doing community policies in 2014-15 yeah and it also highlights the the point that you almost cannot talk about financial inclusion without talking about you know Financial Freedom Financial freedom freedom of assets interoperability and that's one of the things that the blockchain industry

sometimes used to get stuck on especially because of the big uh layer ones that started and people give out into this war of you know of being maximalists and all that and the entire size of the entire cryptocurrency and blockchain industries too really really tiny probably less than one percent right and people are focused on this is going to be the one coin but if you really look at the real world there's like so many solutions there I mean for financial uh Solutions and services their Banks their financial their payment systems uh companies their many different solutions and many different banks there's never going to be only one coin or one project talking and the ability for those tokens to be interoperable and being free to to to

switch and change is very important important for the for the final recipients I mean think about like a project in a community somewhere in Africa and like you said one of them has a token for a project and they are unable to take that token and do anything else with it that immediately totally destroys the financial inclusion aspect and causes a lack of adoption so that's one of the things that we built early is to consider interoperability very early Market making like Thomas said those are all things that are solutions to ensure that Financial inclusion is possible addressing that freedom and velocity of the assets and the talkies that you're holding but I think there's one more thing because uh like you both said there's

the aspect of being able to swap a token then there's the aspect of uh you know a token being illiquid but the the thing is that before even talking about a token is where does the value come from because as we all know here generating a token is not a big deal you can do it in five minutes and doesn't mean anything it's just you know a label um but so the question is how does the token appear and is it related to something is it generated because there is an economic activity is it generated because it represents something else like a stable coin and I think this is one of the key things that we tend to forget sometimes like oh yeah there's a token oh yeah you know it's this community token or that project token

but what does it do and let me let me let me jump in here that's one of the reasons why we you know we always said that a lot of the tokens that have been built is a lot of talking shuffling going on and people are focused on you know it's emissions it's to economics because everybody is just trying to eventually get it on an exchange and you know and and sell it it's almost like you know the old thing that visitors used to do you know seed wants it too everybody is just looking for an exit they focus in many of the projects that we've been interested in is are they really building something are they providing something of value is it doing something for someone and some of the like I mentioned the agricultural project they did hiring people creating

a new token they're just basically even using a stable coin because they're focused on financing Farmers right and there's another project which is a health Healthcare project that actually provides access to healthcare really and that I'm so excited about that's actually solving real problems now that doesn't mean that some tokens have no use right like I said you know you can use took it to insert device Community Development and Community happiness take in what the project is doing but ultimately you shouldn't have something that's doing something useful rather than just a talking for the purpose of shuffling it and getting non-exchanges and and moving it around but even Beyond like just useful but you need like you need value in a token right like if it's giving you ownership of something that produces value then

you're a stakeholder that's fine but if it's just you know a token for a token's sake and it has no value at some point uh you know you're gonna pass the buck along like Lucia was saying you know you trade something for something it's a piece of paper for a token but somebody at some point is going to be holding that token and and there's gonna be no one to pass it to one of the main reasons why there's such a big talk about real world assets currently because of course like of course it's the exits for you know bringing value into defy uh is to have a link with the real economy right but that's where inherently like the underlying philosophy of peer-to-peer training was intended to be what underpinned a lot of this right

like obviously we now see thousands if not like tens or hundreds of thousands of token projects that are you know utterly I don't know what they are I listen to not call them something mean but uh what I think is really important is this idea that in in its like fundamental philosophy a big piece of this was this notion of peer-to-peer trade and that that being the dictator of what that tokens utility was for I think a lot of people make a very common uh let's say have a thought that uh cryptocurrency and tokens are intended to replace existing forms of money but what's really interesting to me is actually and I've had a really really

long conversation with one of my favorite Bank owners in the world about this and it's this idea that you know we have for a very very long time expected money to fulfill all of these different uses money today has you know six different functions and some of these functions are actually at odds with each other for example if you are a person that wants to invest then it's in your uh interest for the value of the asset you're investing in to inflate in value right like you want it to grow in value but if you are a person that is using money to trade commercially then it's in your interest for that money to stay stable because ultimately you want to make sure that when I charge you you

know two dollars for that piece of paper that I didn't accidentally end up paying you twenty dollars the day the day after right so the volatility doesn't help you because you want that stability of knowing that you're paying the right price for the right object and then if you're trying to save or if you're trying to invest you want that volatility to go up and so ultimately historically speaking when using Fiat we've expected money to do all of these functions even when they're at odds with each other so whether you know it's six different functions so we expected them all to be the same currency and that's where you know these complications around interest rates came in because you're trying to balance the stability of the peer-to-peer training with the interest of you know using assets for future uh needs and so ultimately what

the blockchain industry offers that I think is the most special value proposition of us as an industry in relation to money is the idea that you can defragment the the functions of money so that you can have a mechanism for peer-to-peer trading that is more stable and you can have a different mechanism for investment in Saving which goes up in value or is responsive to volatility and that is a real value proposition and so I think that when it comes to financial inclusion we have to make sure that we're distinguishing and differentiating the uses and functions of money uh that ultimately are appropriate for The Right Use case and then make sure that the token projects that we have in place are specifically catering to those transactions because that is really the the ultimate value

proposition of blockchain for money taking it and in that sense the way I see the most interesting use case where it comes to financial inclusion and blockchain in my mind interesting which is only my mind and art and episode 13 anyway but um many times when we think about the region of money you'll like to go after the classical story of oh there was a carpenter and the carpenter wanted to

talk to the to the cow to the farmer and how can the trade what they have between them so that's why money was invented which is just not true at all most value was used in a public good manners um before money was invented he used to live in the community where this land you lived on with the public goods the cows were Republicans the everything was probably good in the other funnel financialization everything kind of like killed puppy Goods and if you think about it Bitcoin is the

biggest public good Financial public good invented it's a financial system that accessing it is only dependent on your Holdings of Bitcoin if you hold Bitcoin you can use the Ledger now tokens personally I think will be more interestingly used by creating and managing new Financial public goods in order to create more financial inclusion rather than their peer-to-peer transactions like story saying that as I mentioned in the beginning I got stuck on the way um and I'm here with my daughter and

she's getting a little bit itchy so I'm gonna have to say thank you guys that was super interesting and I'm gonna have to drop so thanks everybody for listening then everybody thanks everybody for participating and people who host that crypto Valley and tornet was a pleasure thank you say hi to your daughter I wanna just take on some some key points before we start wrapping up um because I think this this thing is emerging of um the concept of of you know the economies within communities and what we can expect to be a public good for example

um like you're like I think Tomar was saying or Lucia was saying um there's this idea of you need to look at how the community functions and to be able to do that there's also of course the question of perspective right because you can say oh as a builder I'm doing something for someone well at some point you know you can't create entire economies for people without their participation because as you said before you say you need to see how the money flows how the social interactions uh govern those groups so it's also a process of you know co-creating uh and and managing links between stakeholders um that's I think it's another way of

thinking about public goods right it's it's open to the participation of people who are concerned with it um I completely agree with that I also think though it's really interesting to think about that last mile because when we say public good participation rates it matter right so if we're saying okay this is going to be managed as a as a you know public good but we still have well you know a huge percentage of the global population that can't actively participate in a lot of these ecosystems that are managing the custody of certain public goods then how public a good is it really and so it's super important I think to counterweigh the the pace of digitalization with the pace of

inclusion and how make sure that we're like you know trying to harmonize those because ultimately you know what good is a public I think there was a project I'm not going to name it but there's a project going around that's like thinking of buying a bunch of land in a country in Europe and they want to spend all this money you know buying this land and you know the question I asked was like okay if you're a Community Driven project let's look at your community stats like who's in who's in your community and are there you know people from that country in that like embedded in that community in the millions not just you know a couple of them that are you know technologically forward and in a place of privilege that suddenly they're voting on how land in their in their country should be acquired which

land should be acquired and managed as some kind of public good where the rest of the country isn't participating in the discussion yeah so I think like the the way that we say okay we're going to manage this as a public good but if that's not true to spirit because public is a Loosely applied word in terms of who's participating in the management of these goods and these assets then I think that that's already a logical flaw in the way that we're operating um and then you know the last bit of this is it relates very closely to to The Last Mile it's this question of uh how how are we giving people the option to interact and I think if I read if I see one more project that's like we're creating the next digital wallet for financial inclusion and I'm like okay a

wallet that you have to download on your smartphone if you're downloading a wallet on your smartphone you are financially included it because you would have gotten that smartphone either up like paying for it with some kind of card most likely or okay fine maybe you paid cash for it or you got it on credit which means that you've already been financially included in some kind of way so is that the answer to creating this like Mass notion of financial inclusion no and even in countries that have increasing and accelerating rates of adoption for smartphones let's say let's take Latin America as an example you do have it's one of the fastest growing adoption rates for smartphones in the world in Latin America but then when you take the steps you know behind the curtain there and you have a look at the way that they're using these phones you

actually start to realize that they're using them in the same way they use feature phones they're still using them primarily for communication and messaging the difference is that now they've got platforms like WhatsApp and then now they have social media included in it and so those are the three primary ways in which people in Latin America today are using their phones so note that in there it's there's no mobile banking mobile apps and though those products are available not in America the adoption rates are quite slow for these kinds of projects because the behavioral change around how to use a smartphone even when you get one is actually a very slow adoption rate and so ultimately this last mile of saying hey we're creating the ways in which the public can truly participate in the management of goods that are inherently a public benefit that's a key like

tension area that needs to be resolved and so while it's all good and nice to say hey we you know we're managing these public goods on public blockchains the the term public really matters here and participation is a huge element to that and I think that that's really where you're going to see some projects stand up and differentiate themselves in a meaningful way because those that are actively thinking about this that are creating and innovating ways in which the public can participate at whatever level of digital literacy or adoption or familiarity with blockchain they have then those are truly the ones that are stepping up to the plate and saying actually the word public matters a lot in more ways than one and that's to me super impressive but also by the way like to love to see if there's any questions from the audience before I I

leave I would love to answer any that they might have foreign do you have some closing thoughts while we yes just just a few closing thoughts to the to what Lucia I did um Financial inclusion is like really really super important right and with the blockchain and some of the new Financial technology that uh that we see now provides an opportunity a unique opportunity like knowing that we've had in the past few decades right and I've been in payment systems for a while for a long time there was a point when you know you write a check talking about checks where it'll tell you it takes three days before it gets to whoever you're sending it to it's called ACH clearing but yeah blockchain came and showed us that these things can happen

in minutes and now the traditional financial industry is even catching up on those things so there are opportunities afforded to really LeapFrog and bring people in in some of the ways that we've talked about reinvented some of this the ways things are done and applying some of these unique Technologies to those things and it is important right and that's one of the things that Toro net which is a non-profit to clear is is looking into our dressing and I'm very excited by some of the projects I'm seeing a lot of young people are actually approaching me talking about inclusion young people wouldn't be able to dream of starting a business they're actually coming up with ideas and some of those ideas they're not coming and to me and saying I want to make this talking it's going to go

times 10 sometimes hundred they're actually saying look this is what is going on in our communities and this is what we can address like the project I mentioned on you know I mean providing health insurance Healthcare to people that where Healthcare really you know they have like a ratio of 22 000 to one sometimes in some cases doctor to to to Patient right I mean users like that that are not even focused so much on on just you know tokens or even Financial but the needs of people you know shelter food education stuff like that and those are the solutions that excite me we've talked about some of the ex I mean specifics on how you can make changes and revenge think so that it works but this is very important to everyone and

it's important even to people who are in many of these countries we're talking about because without Financial inclusion things will not be sustainable yes there's some of the distress that we see in communities that where there's no inclusion there's unemployment rates sometimes as high as 40 and those distress sometimes relates to Tamil and then you start to have migration that is not sustainable and we have an opportunity Now using technology to address some of those things and I'm excited by the discussions we've had and some of the things I'm seeing I love this uh I love this panel because it shows like how much more time we need just to cover the basics of you know stepping back talking about the concepts and Lucia thank you for starting with that

um you know what do you mean when you talk about financial inclusion let's start there like what do you mean when you talk about Community or when you talk about value uh or when you're thinking about launching a token um so I hope we'll have many more conversations to uh to broaden this topic it's going to need a lot more than than one hour but thank you so much both of you for being here uh please excuse Tomer that had to leave he had his small daughter with him so so he had to run but it was a pleasure of meeting him as well and yeah unless there is any questions that pop up I suggest that uh we close first a day thank you everybody

uh I dropped my LinkedIn in the chat in case you didn't spot it feel free to connect to send questions through messaging or you know hopefully we get another chance to to spend some time together and it was so lovely to meet and spend time with you both thank you same here take care everyone bye-bye bye