 Live from Toronto, Canada, it's theCUBE. Covering Global Cloud in Blockchain Summit 2018. Brought to you by theCUBE. Hello, Varroa, and welcome back to theCUBE's live coverage in Toronto for the Blockchain Cloud Summit part of the Blockchain Futurist event happening tomorrow and Thursday here in Toronto. I'm John Furrier with Dave Vellante. We're here with Gabriel Abed, who's the founder of Bit and also the Digital Asset Fund. Great stories. He's been there from the beginning, present at creation in the movement that's now changing the world. Blockchain and cryptocurrency, certainly. Infrastructure and token economics, changing how things are doing and rolling out, reimagining everything from infrastructure to value exchanges. Gabriel, welcome to theCUBE. Thank you, it's great to be here. So we're just talking on camera. You like to go after the big changes. You're an entrepreneur. You have that fire in your belly. You've been very successful. Where are we? I mean, you've been part of the movement. We're now on the cusp of mainstream adoption. There's still work to do. Oh, plenty of work. Lots of infrastructure still to build. Many regulators and legislators still to educate. Lots of laws still to be amended and changed. And at the end of the day, it's happening and it's happening quickly and beautifully right now. The entire industry is changing. One of the things that you've done, you've taken on some big projects and you've made change happen. Regulation is the hum of the hottest topics we're hearing, certainly in the United States. It affects innovation and there's so much entrepreneurial activity happening right now. There's so many entrepreneurs, alpha entrepreneurs really want to do great things. And regulation is just a blocker. It's an antibody for innovation and you busted through that. And it's probably going to continue. The old guard is either going to be replaced or adapting to the technology. You've done that and a lot of people want to do what you've done. What's the secret? What's the secret of your success? How have you taken on these big incumbent positions and taken them over? You're not running from regulators. No, no, I think regulators are important to a responsible and sophisticated market. When my partner and I started BIT in 2013, 2014, we immediately realized that if we wanted to build a product for the monetary authorities around the world, we needed to have the buy-in from the regulators. So from day one, we were regulator friendly. And it's not to say that we don't believe in a decentralized future. I'm as big of an advocate for decentralization and the freedom of information as anyone else. But I'm also a big believer in if you're building a product for a market in the traditional world, you have to involve the regulators in order to ensure that product does its job, keeps the consumers safe and ensures that the economy around it doesn't collapse. So regulators are critical in this field. Talk about what you guys have done. Take a minute to explain the project you did, how it worked out, the tenacity, but also what was the outcome? What were you trying to do in the project and where is it right now? It depends on the project you're referring to. Let me start at the beginning. Let's start at the beginning. Okay, so Gabriel Abed, born, raised, educated in Barbados, around the age of 19. I decided I was going to take my computer science education a bit further. I went to Canada. I did a batch of IT where I majored in network security in Ontario, the University of Ontario. And unlike the rest of my peers, who usually stay in Canada, I decided to go back to my little nation with the education that I had just received. And I took that education home and started one of the world's first blockchain companies. But at the time, I didn't understand blockchain per se. I understood it as a commodity, as a cool investment. I didn't understand the true nature behind the protocol itself. And it was only until 2013 that my partner and I ran the larger mining operations in the world that we realized the commodity was actually a protocol, a network tool, a system that you could build on top of. So in 2014, we actually created one of the world's first blockchain assets on Bitcoin's blockchain. And that was a representation of a digital dollar for a central bank. And the notion behind bit.com in 2014 was, let's compete with cash because it's inefficient, it's costly, and it slows down the movement of society. So what we wanted to do was create a digital version of that that would save economies millions, hundreds of millions of dollars. Cash is expensive to create, that linen plastic paper money. It's easily forged. It can be counterfeited. It's hard to transport. It has an expense to transport. It has an expense to cost to count. It has an expense to secure. And then it has overheads around the entire ecosystem of accountability. Whereas a blockchain-based digital dollar eliminates all of those efficiencies and increases the ability for a monetary authority to trace, track, and have a better form of anti-money laundering, counter-terrorism financing, and a better overview of their entire society. So with that all, we took that notion, went to the central bank of Barbados, who at the time was being led by Dr. Dilawaral. And our very first meeting, he had asked me to excuse his office. And 13 meetings later, and a whole two years, loss of development, building out infrastructure, around compliance, around finance, around security, and around regulation, we finally got the nod of approval from Dr. Dilawaral to operate a fiat example of a digital dollar in Barbados. And since then, we have been working with several central banks around the world. Bit.com today is the leading central bank provider for digital dollars. A lot has changed. I've developed other tools since in other businesses. But Bit.com continues to be the best friend for central banks, looking to move and transition into the digital arena. Why, I mean, other than a closed mindset, why wouldn't every government around the world want to move in this direction, initiate some kind of fed coin? Education. Education. It's the fear that the system may not be scalable. It's the fear that the system could be hacked. It's the fear that they could be cut out. Their control after, at the end of the day, monetary authorities like the Federal Reserve, they have a control on the money supply. Whereas something like decentralized cryptographic currencies, there is nobody in control of the money supply. It's hence inflation versus deflation systems. Then there's the issue of hacking and the threat of digital and cybersecurity. Typically, the head of these monetary authorities are older gentlemen who are traditionally conservative and who are not au fait with cybersecurity. So the fear of hacking is very real for someone like them. Whereas someone like me, who is trained as a network security expert, those fears can be mitigated with good policy and procedure, cold wallets and the right process to ensuring that your environment can run without the risk or the fear of malicious attacks. So it really boils down to education. The educated governors of central banks, like there's one, for example, Timothy Antoine. Timothy is Dr. Antoine is the governor of the Eastern Caribbean Central Bank and they govern and mandate the currency union of eight islands below them, St. Lucia, Grenada, Antigua, et cetera. Now he is a governor that gets this and has wrapped his head around it and understands that this is the future. He gets it so much that he signed an agreement with bit.com to begin exploring a pilot for his currency union to have a digital dollar implemented in it. You also have governors and presidents like that of Curaçao, the central bank of Curaçao where we've just signed an agreement to move forward with a phase of looking at the implications of rolling out a digital dollar in a society like Curaçao and St. Martin. What is the ramifications? What is the feasibility study behind that? So to answer your question, it's not every single regulator, governor and central bank manager is going to head towards this technology tomorrow. But with more education and more lobbying, you will see more and more central bank governors moving in this direction because it's better, cheaper, faster, makes their job easier, gives them more control, gives them more oversight and provides all the things that they would want as a central bank to continue to do their job for their society, which is to protect their dollar from alien threats and to ensure that the dollar remains stable and to just generally ensure that the society is functioning the way it should. Gabriel, what's your vision on what this will enable for the citizens? What's the impact do you see happening? If this continues down the trajectory, what does the adoption look like impact to people's lives on an everyday basis? Well, for a very starting point is your democratized payment. Right now, if I want to make a payment, I have to go through a utility company called a bank. And this bank typically has frictional costs and frictional overheads in time. And that's one of the biggest problems is that these monopolistic infrastructures hinder the ability for the average participation of a free flowing payment system. So what you end up having is rather than me being able to make a digital payment in seconds with no cost, I have to wait days. I have to use manual based systems, whether it's check cash or the bank's visa master card system. And then it has frictional costs. So right off the bat, you democratize payment. What does that do for a society and a developing nation? It empowers people. And you're empowered because that was a developer. I can build on this payment system as an entrepreneur. I can tap into this payment system as a merchant. I can utilize this low cost payment system. As a society, I now have GDP growth because of financial inclusion. The underbanked, who do not have access to banking facilities for one reason or another, maybe they don't like the bank. Maybe the banks don't like them. Maybe they don't have two proofs of ID. Maybe they don't have a fixed place of abode. Maybe they don't have the minimum deposit amount. All of these features keep the poor and the underbank out of the system. Whereas in developed nations, we have mobile penetration rates that are through the roof. In some cases, like Barbados, over 100%. So if you have 100% penetration rate of this mobile platform, this thing in my pocket, but I cannot access the banking system, well, flip that around, democratize the payment system, allow payments to exist on this mobile phone and watch how quickly society becomes backed. So what you end up having is full adoption. Why would we not have full adoption when it's cheaper? It's faster. It's more inclusive. And the data from that collective intelligence only creates a more responsible environment. Wealth creation environment. It creates a more traced, trapped and accountable society so that the monetary authorities and the government can now start making educated decisions on data. They now know who's buying milk, who's gambling, who's paying their taxes and who's not. The downstream benefits of this are... The downstream benefits are massive, enormous. They're disruptive. This is a brand new fiscal tool, a monetary tool being given to central banks to start eroding the field of private e-money systems and to start bringing about a uniform standard towards payments. Plain and simple. We're going to the central banks and introducing a new monetary instrument that they are in control of, that now the commercial banks, the financial institutions, the corporatocracies, the citizens and the merchants can all follow under one roof issued by their monetary authority. It is not a cell phone company or a bank building their own private system that I have to jump through some hoops and some red tape and sign away my first born and give away my left arm to enter. This is a free and open source standard system. And it's networked, as you said. Penetration's 100% on mobile or roughly that. It's a networked society that now has digital fabric built into it. This is the future. Well, I'll play this out in terms of, when you talked about this in your panel, now every device, everything, every physical asset will be instrumented. Yes. And as a result, Gary can be tokenized. You're building the deep infrastructure. I remember we met with World Bank back in 2014 and they gave me, they coined this term for me because they were saying we want to help entrepreneurs and it's important to help entrepreneurs in developing nations because they're the lifeblood of it. But what we are building is the deep infrastructure. And that's exactly what it is. It's the infrastructure that would allow the entrepreneur and the developer to now have a framework that they can build against to provide more uplift. So in essence, it's really going to be exponential growth once systems like this are implemented. The stock market can move digital and people can buy stocks using digital dollars. E-commerce can occur because I can now buy things online or sell things online with digital dollars. I can now be part of a global financial ecosystem with my smartphone and my wallet. That's a great use case. Congratulations on amazing success. You so much is on your plate. You've had great success in this new era. What's on your plate now? What are you working on? What's happening in your world now? So in 2017, we realized that it was entering a new growth phase. It was no longer a battle of trying to convince regulators and central banks. Our product had been proven. Our reputation had been proven. It was time now to scale the company into a professional level of dealing with these regulators around the world. At the end of the day, we would like to digitize cash wherever cash exists and to provide those tools for central banks around the world. That required professional management and that is not I. So our investors and shareholders were quite comfortable with our proposal of bringing on that professional management. So in 2017, I resigned as CEO, retained a board position and still single largest shareholder, but with the idea of what other types of infrastructure can I build now that a deep infrastructure have been put in place? So I've been attacking three major markets, the banking sector, an actual commercial banking enterprise, working with a group from the United States towards looking at deploying the future of where we think commercial banking is going. I think that the community, the crypto community in general, there's a lot of noise happening in the chats and therefore we built a machine learning chat bot to start looking at market sentiments and aggregating market information and of course building common tools for community members. So we've launched an agent called Gabby, the forum to Gab. My name's Gabriel and my mom calls me Gabby, so it works out quite well. The gift to Gab, that's for sure. And then I launched a mutual fund with a very sophisticated former managing director of J.P. Morgan, a guy named Richard Galvin and we launched the world's first protocol-only fund. We focus only on protocols and that's called Digital Asset Fund and we launched that in late 2017 and got full regulatory approval to become a professional fund that handles 100% solely crypto. And that's basically been my ride and then outside of that just your standard consulting because everybody from World Bank to IADB to some government agency to some private organization wants to know about blockchain, they want advice and they need a team of people to give them that advice. So it's just been all around looking at how I can be an entrepreneur in this space while finding great leaders and partnering with those leaders to build out great companies while still focusing on assuringbit.com becomes the solution for digital dollars worldwide. Got a great mission, entrepreneur, builder, congratulations. Thank you. Industry's lucky to have you. Congratulations. Thanks for coming on. Thank you guys. Cube Coverage here live in Toronto for the first global cloud and blockchain summit in concert with the Blockchain Futures Conference happening the next two days after today more coverage from the Cube. We're live here. But stay with us for more great coverage after this short break.