 OK. Can everyone hear me? Good morning. I'm very glad that you all managed to find seats. Thank you for making it here early. So welcome to this morning's panel on emerging technology and social progress. So we'll be discussing some key challenges in the humanitarian sector and the global financial system and how innovative finance initiatives can offer solutions to some of these problems. I'm Natalie Cargill. I'm the founder and executive director of a non-profit called Effective Giving. We work with major philanthropists who want to maximise their positive impact on the world. We work closely with researchers from the University of Oxford and we are currently advising BitMEX co-founder Ben Dilo on his philanthropy. Joining me on the panel today are Will Rudick, founder and executive director of the Grassroots Economics Foundation. Grassroots Economics is a non-profit foundation that seeks to empower people in the developing world by giving them more financial autonomy. The organisation develops new currencies for marginalised communities allowing small businesses and local people to trade within the community and build their own economy. Grassroots Economics are currently working on creating a system that lets communities make their own digital currencies and trade with neighbouring communities. In the middle here we have Lucas Geiger. Lucas is the co-founder of Yline and principal at Open Libra. Open Libra is an alternative network to Facebook's Libra platform. The platform aims to be technically and financially compatible with Libra but will be permissionless, censorship-resistant and governed by users. Finally we have Adam Bornstein here on the end. Adam is the global finance and transformation lead at the Danish Red Cross. Adam's role at the Red Cross is to identify and implement new opportunities to improve the efficiency of traditional humanitarian assistance. Adam's team identifies solutions that focus on technical innovation including blockchain-enabled community currencies, insurance-linked securities and microfinance. So thank you very much for being here with us this morning. So we'll start off by each of the panellists introducing themselves and a little bit about why they got involved in this type of work. I'll then divide the rest of the panel into three broad sections. So firstly we'll focus on what problem are each of you trying to solve and I'll push you during that section to be as specific as possible about exactly what it is you're hoping to tackle with your work. We'll then move on to how each of the projects that you work on aims to achieve that goal. Both in terms of why did you choose this approach over other potential approaches, what challenges do you expect your face and do you expect to overcome them and it will be interesting also to talk about what success looks like if and when we get there. And then for the final section of the panel we'll be looking ahead to take a broader look at where we see this sector going over the coming years and how individuals can be involved. So Will, would you like to start us off with your brief introduction? Thanks. So I was a physicist about 20 years ago working at Stanford and I started doing agent-based modelling and there was a thing called econophysics and there was this theoretical model where if you could start tweaking who gets to issue money and what are the rules on that money you could drastically change these models in theory and it turned out as I found out there was a movement about creating local currencies going back almost 50 years and there were examples of these all around the world so I got really passionate. I left physics, went into economics and started studying this stuff and that led me to eventually coming to Kenya and starting to work with community groups to get them to come up with their own rules and I started with pieces of paper. They started really taking off in Kenya, these little voucher systems and eventually the central bank put us all in jail and we ended up fighting that in court and since then we've been just steadily pushing on and just this last year now we've gone into blockchain and that has really started to give us some ability to scale. Thank you, Lucas. Yes, so I've been working in technology probably for 15 years as an entrepreneur recently I was part of Key Scores which is a data analytics startup that we did analytics with iOS, Google Play and Amazon App Store so we had familiarity with a lot of fintech technology and after I exited that company I started working with a lot of experiments on Ethereum because that really blew my mind into how we could actually have a neutral arbiter of agreements and that could be a real powerful tool for us to create a different financial system so I think I'm preaching to the choir here for this audience and then through some of those experiments we started thinking about what really a privacy preserving application and a censorship resistant set of applications would look like and so I started wireline with my co-founder Rich Burden. We've got a wonderful demo here in the last couple of days so go check that out but in the process at wireline I was working on the economic design at the wireline network and we were really intrigued by stable coins and what that actually means for censorship resistance and commissionless systems and who might benefit from these and as we started hearing about Libra just in the background, the rumors we heard that design started to make a lot of sense to me especially for developing nations so I grew up in Brazil where the US dollar is a type of investment people can see if you go in the newspaper it's in the investment section so it's a very important store of value for certain sectors of community that can afford it and so the idea of this currency fund which as Facebook Libra is being designed is a basket of currencies currency fund with instant redemptions that can be transferred to people as if it was cash is quite a compelling idea but as we started hearing more about Facebook and how they're planning a launch then sort of the crypto dystopia started to become clear where this is going to be a cartel of the largest corporations in the world running effectively a bank that's too big to fail and there won't be a government that can bail it out in the extreme case so what does that actually mean for the people that Libras intended to serve for people in developing nations and so we got a group of people from crypto together some of my friends and thought leaders in the space and started to think about what would be a strategy that we could either steer Facebook in the right direction as unlikely as that sounds or create an alternative platform that's perfectly compatible a stable coin that would be compatible in the event of Facebook launching their coin or one that has the same properties and same guarantees and so we've announced this week a project it really is a meeting ground for people who have concerns about Libra to try and influence the governance and the direction of this ecosystem and so we call that open Libra Thank you very much Oh sure Good morning, my name is Adam Bornstein and I work for the Danish Red Cross I work on innovative financing but as well as looking at transformation How I got to the Red Cross was through venture capital about 20 years in Asia also I was an equity analyst for a little while and I worked for the World Bank, USID and a few other organizations and my colleagues and I within the Red Cross we look to support the Red Cross as it matures and migrates and moves and develops into a new paradigm, a new world where organizations need to be more proactive as opposed to reactive so it might surprise you that the Red Cross is not only a non-profit but it's also a for-profit and it's a quasi-government entity and what's really interesting about that is that the Red Cross in various countries around the world there's 191 national societies around the world we have one million, almost one million full-time staff and 14 million volunteers it's by far the world's largest organization under an umbrella for example the UN is around 44,000 and our annual budget is around $25 billion and so if you can imagine having an organization which is more dynamic and engaging and still follows our principles which is neutrality, impartiality, neutrality that's a really powerful platform so we can uplift more than we do even today and especially as things get more localized and we try to give agency to vulnerable communities on the ground and so my role or my team's role and my colleagues we look to do a few things one is risk transfer, transfer risk to private sector capital markets but also we look to become more effective and efficient and so I have a really unique pleasure of being able to work both with Lucas on the open Libra as well as with Will on community currencies and they'll be talking more about that Thank you very much Okay, so we'll now kick off with the discussion section of this panel If any of you have questions please feel free to come up to this microphone here and we'll be very happy to take them So kicking off just to get a clearer sense of the problem each of you are trying to solve Will, I suppose an outsider could say well poverty is a very complex problem but fundamentally perhaps what people in poor countries need is more money and we can do that as an individual through organisations such as Give Directly we can send more money to people in the poorest places on earth we can also do it through things like lobbying for policy reform etc etc Why is it that the world's poorest people need new currencies or new tokens rather than just access to more resources why this approach? Right, well, sorry If you had one dollar and you could move that dollar at the speed of light that's all you would need Right, I mean we have in rural areas in very poor areas there's lots of goods and services actually on offer and you get these stagnant markets constantly where the current system is just not reaching them it's not diffusing enough and there's certain mechanics around the money supply that just even if you do dump money on communities it ends up within a month outside that community forever it doesn't stay and circulate and so engineering economies and engineering tokens and money in a way that causes that money to sink into communities and also gives the communities to leverage their own assets and their own goods and services so I mean the general problem here can be phrased the UN phrases it well they say well look we need 2.5 or 2.6 trillion dollars to fill the gap for sustainable development funding and that's for all sorts of stuff like food security for instance and there's no source of that money anywhere and if they were to pull 2.5 trillion from typical banking interests then we would just be creating that much debt in the world and to pay off that debt we'd be in another situation of just compounded interest and so this idea that communities are the source they can be the source of their own credit they can have social backing and social collateral and fill that credit gap they can fill the SDG gap as well as this gap of the World Bank would also say it's about 2.6 trillion dollars of credit that's missing in the world right now Are there any projects that you think that are already operating that come somewhere close to this kind of system that you're talking about which success stories would you hope to emulate or improve? So right now we're working with about 6,000 small scale businesses and farmers across Kenya we've got 12 different tokens that those communities have created and they've backed it with their own social capacity and right now they're doing about 120,000 dollars of transactions just in the last five months about 70,000 transactions they're using the blockchain using feature phones with no internet so we use a server sitting there at the telecom and so the blockchain is solving this problem of saying well can groups create their own endogenous their own local money sources can they connect them together create relative prices among them and also back it up with collateral and so there's some next steps here for us and that is allowing communities to actually now take those community currencies imagine we create 2.5 trillion dollars of community currency well if we have a social peg to those and they're all connected with each other that's one thing but to have actual collateral in the sense of connecting it to financial markets is sort of the next stage and that's what's really exciting to be here with Adam and Lucas because in order to make those solutions really viable there has to be some sort of common reserve some sort of common way for communities to establish relative pricing with each other and create that credit supply Thank you Lucas, sort of similar question from an outsider for you could be okay so there are lots of problems with Libra they're pretty easy to imagine but a person could say well if you don't like it don't use it you won't have to use it there are existing fiat currencies you can use there are also existing crypto currencies you can use why start this extremely ambitious project that in many senses you could say the bases have been covered elsewhere That's a really good question I think there's a misunderstanding that if Libra launches it'll be sufficient for you not to use Libra or the Calibra wallet and you'll be fine I think there actually is a pretty significant systemic risk that will emerge from Libra launching in the way it's designed because if this currency goes out you don't need the currency to go out to the 4 billion people that Facebook and the association members can reach you just need them to start considering it as a unit of account so people don't actually have to take possession of the Libra coin but if they see it on their feed and they start using that as a reference coin to something then we start getting basically everybody who sees that feed to consider it an asset and store value and so how do we get that asset and store value to be part of a greater ecosystem not just the permission to Facebook Libra chain so the important message there is that many people don't know this about Facebook's design but Facebook can't guarantee right now and the Libra association can't guarantee that non-custodial wallets are going to work on the Libra chain meaning the only way to hold a Libra coin is to have basically an entity custody it for you and that might be subject to seizure and forfeiture for reasons for the terms of service of the association that does not give security to the people this is designed for so if you look at the Libra's claims and I tend to agree that this coin design is quite useful for people in developing nations you're not giving them more security that way and so this is a problem so the open Libra organization, we're an umbrella project where we're looking at different ways that we can create either a balance of power with Facebook by expanding the ecosystem in use cases of it but also making sure that there are credible alternatives to people who want to use a stable coin that's similar either pegs to Libra or with the similar characteristics or use chains that are similar in operation technically to the Libra chain and this is a way that we can possibly steer this in the right direction give security to people that are end up going to be using this coin I'll say one last point because I think this is a conversation that happens here in the Ethereum my personal view is that I don't think it's enough to hope for governments to do something about Libra I think that that's not a strategy the way I see it happening I think Facebook is going to eventually become regulated as a bank and their blockchain is basically just going to be an automation platform on top of a bank and I think that would be quite a bad outcome if that was the only ecosystem that this stable coin was a part of Sorry, please go ahead with your question Yeah, it's not so much as a question as a way of posing the problem otherwise it was about 2.3 trillion a quantity of money but I'd like to draw your attention to what I think is the fundamental aberration when we think about money is that money is that that's a historical aberration but that's the truth of it and I think this is what we need to address because we're talking about preserving people's wealth and value and I agree with you that what people we could call the underserved in financial inclusion every day they wake up they do food on the streets or whatever they generate wealth but right now they are captive and they are forced to convert that wealth into debt and we cannot think about money in this community which is a topic that we have without grasping the implication of this aberration that for the first time in the history of mankind on such a scale and with such force it has been imposed without consensus that money is no longer an asset but a liability and that has profound economic political and social implications and I think that's the point when we're thinking about what blockchain, FinTech, about money is freedom for people is the right to own your wealth and your wealth is not debt because a debt is the absence of money is a promise to have money so money is a promise to have money it's irrational, it's an aberration and it leads to immorality because once money becomes debt the governing force how do you interest people in holding debt? by interest but we know that interest works in the interest of the user and it's a tiny elite and the interesting thing when you focus the question like this going back to Libra on your point is that there will be another financial crisis the anger of people will be addressed to the banks but the driving force is usury and we are seeing already a shift whereby the banks are no longer the vehicle of that active principle and it is shifting towards the hands of the tech companies Amazon, Google, Facebook, all those guys and to me it's not about pointing out the finger to people but it's that principle, it's on an ethical level debt is money, usury governs money and as such the people who hold money concentrated and finance rather than become a service to industrious people is becoming an industry of itself and it's literally concentrating everything to the point that every sector of activity is actually a cartel and the cartel that rules them all is the cartel that can loan the money for the cartels in Mexico and be called HSBC and do so factoring in that they will pay 1.2 billion settlement and they will be pushed in their risk assessment on to the cartel and nobody goes to jail and the world keeps on going and so if we will Before Will and Lucas answers that let's put this in context that was a great question and I think it's a good lead into context which is when you talk about social progress there's social progress in the first developed world and then there's everybody else and people that are living in vulnerable communities which 80% of a lot of the workers in the world are living in communities where they're earning pretty much nothing at all and actually have no money to start with so in order to actually have that debt and it could be a social debt or it could be a monetary debt they need to have some kind of commodity or some sort of social currency or some monetary currency of exchange and they don't even have that so I think that you're talking about a first world problem in some ways yeah well okay that's cool I mean but maybe I'll let Will talk in Lucas but I think you have to put in that context a war worth thinking about I mean it's a good topic because so imagine like we're a group of women and we're coming together and we have goods and services we trade with farmers, we're teachers and we come together and we come in agreement and say let's create a credit amongst ourselves there's no, we don't have to start it with any debt involved exactly and we all air drop to each other we all start with let's say a thousand of these units and we start trading them with each other it's sort of like a barter trade if you will well that essentially does work but there's a lot of limitations to it and so there's a lot of these ideas that even the movement that I'm from is around community currencies has this beautiful idea that well money's about trust if we trust each other we can create systems to trade and share with each other and we shouldn't really have limitations like money is like a measurement tool so if your builder says I ran out of centimeters that doesn't make sense you can run out of wood you can run out of inches but you can't run out of centimeters and so if money is about trust it's about measuring reciprocity in a community well that makes sense we can create these money supplies based on trust but now we need systems to trust those trusted parties so this whole idea of mutually suspicious actors coming together and saying well we've created a currency over here we've created one over here how do they reach consensus and so that's what's really exciting about blockchain is that well we can pin those down we can write those into a contract we can actually say okay we're going to create a basic layer that every community across Red Cross across the world like post cash transfer programs for instance and Adam can talk about that but how are all these communities going to freaking agree with each other on how to create their currencies and a big piece of that is the idea of reserve is still there there's this still idea of like what collateral arises that what is that trust based on and so there's you know there in some cases you might call that kind of a bootstrapping problem but essentially if the trust is based on this group here and you know this gentleman here's business breaks down and it was the key element holding that trust together things can fall apart quite quickly and so the concept of collateral like Garrett like if I'm holding this piece of paper and we used to print these paper like a 20 shilling note we would print them ourselves right they would change hands twice a day that one 20 shillings was providing 700 meals a year which is insane to think about people are not eating because they're missing a piece of paper right now like billions of people are not sending their kids to school because they're missing pieces of paper it's really a weird thing but if he backs out of that system well what's the risk now we need to sort of collateralize that risk somehow and come up with agreement so there's a set of protocols that we're working with they're based on what are called bonding curves so the credit that we create is elastic around something you know it's elastic around tomatoes in terms of a social credit but it's also elastic around some sort of reserve and as a default right now we're basically using Kenyon shillings we're converting that to die right now as a piece of that collateral Red Cross is involved in coming and seeding some of that in some of these communities but they can also contribute their own so this is sort of a bootstrapping mechanism now reaching the scale of things like 2.5 trillion certainly we don't want that in terms of debt but there's got to be some sort of trust and collateral mechanisms to that and so as we start scaling these things up we have to think ahead in the next five years how do we create those scales within communities and how do we create the trust and the calls that connect them to each other Thank you. I'd like to ask each of you the same question I guess just before that a note on trust this seems to be something that all of you are concerned with and again an outsider could say well there's nothing inherently a blockchain does not necessarily create trust you can put lies on the blockchain you can deceive people using a blockchain all of the problems that the social institutions or groups of people can happen on that's the sort of one of the key problems I think and also there's this tension between separating from traditional financial systems but then having a reserve that's based very much in those systems similarly dependent on those systems that will be one observation that I imagine people unfamiliar with this technology would make I'd like to ask each of you imagine it's two years down the line and you're no longer working on your current projects your current projects failed what were the reasons that you would expect would have been most likely to cause that failure well I'm back in jail would be the I'm sorry that's not funny that would be the default answer for me that's the biggest thing of like how do we how do we bring along how do we integrate in other words part of this movement that I've been part of it has just been about a lot of it in the past has been about isolation creating little pocket economies but those aren't welcome so much and especially like we're talking about dealing with refugee crisis right now and you don't want to put those refugees into bubbles you want to integrate them and so the work that we've been starting is called community inclusion currencies so we've been really pushing this idea that well to fund refugee movements and things like this we can really create inclusive credit supply and money supply that could actually bring communities together so that's my biggest worry is how do we integrate with national governments how do we integrate specifically I mean that's kind of the biggest elephant in the room and there's some there's potential in that realm in terms of this concept of the space of reserve the space of trust and government does hold the space of trust if we can put that trust on chain in a way and make them responsible in holding part of those roles and ingrain them into CDPs or other sort of collateral mechanisms there's some movement there so you think this sort of most likely failure point would be that governments wouldn't be willing to adopt new sea systems I feel like what we're doing is inevitable to some degree but I think they can really slow things down and if we really want to move on things like climate change and produce sustainable funding mechanisms for these things like we need to sort of make things happen right now you know in the next few years and you know like that budget for the UN like it's not just going to materialize and if we wait another five years in the five years it's just it's kind of like a running joke like oh we need this money to solve climate change but where's the money going to come from I just don't think it's ever going to happen that way so we need to push in a way as fast as we possibly can and the technology we have in this room in this community is already enough to do this stuff like we're technically able to do all these things right now it's just spreading that information getting organizations like Red Cross to start saying well let's just stop dumping money on people instead let's let them create their own connect them together and we need systems of reserve that connect to those and bring governments on as well Thank you, Lucas why would you fail? Why it didn't work, well Facebook gave us grief and possibly the idea of non-governmental coins generally speaking gets shut down because of the emergence of central bank crypto like is going on in China and developments in Europe and speculation the US will do that I think that's generally probably folks in here in Ethereum don't like hearing that but I think the single greatest risk to Ethereum in public blockchains that are permissionless censorship resistant are these government cryptos and large corporate cryptos because all of the let's say I hate to use the word legitimate but all the kind of upstanding businesses that are afraid of government that want to use these systems that want to use financial automation and fast settlement medium of exchanges they're going to go to the large corporate blockchains and they're going to go to the central bank cryptos and that's a really big risk for everybody in the industry not just what we're doing so I think that's going to be probably the ultimate thing that makes a difference maybe I'll say a little bit more about that which is if all these businesses that have fear of government crack down and are more or less legitimate or registered businesses go to these platforms it means we're only going to have renegade use cases on public blockchains and then it makes it much easier to go after those and then Adam I worry about relevancy the Red Cross obviously is a huge organization but when we think about cash transfer and so the Red Cross and the UN together account for almost $5 billion in cash transfer annually and this is basically us handing cash out to individuals the effectiveness of this is like 3% so $3 for every $100 is kind of reaching where it needs to be and is impactful and it's a report that came out a couple days ago and that worries me that if the Red Cross can't use technology and we can't engage locally and allow the local communities to be able to own to own these processes and I think that's the emphasis and the reason why we're working with Lucas and Will is because we want to hand back the authority to the communities for example just real quick the idea is that if we transfer cash to a community in Zimbabwe and we've been doing this for 50 years how do we stop that cycle how do we stop doing what we do every single day and if we don't stop doing that it's going to become less relevant over time and I just want to show one quick slide to give you an example so this is basically funding flow that goes to middle and low income countries the dark blue line on the bottom is ODA which is basically development assistance the humanitarian aspect of that is like 3% when it's all blended in everything else there is private equity financing, remittance foreign direct investment and the Red Cross and humanitarian organizations don't touch any of that above that dark blue line and so how do we get into that nexus how do we start playing in that realm and if we don't we're losing out which means we can provide more money but even if we do have more money we have to be more effective and more efficient and so to me that really worries me and I think that's why we're doing these type of things thank you we have about 5 minutes left I'd like to invite anyone who has any outstanding questions to come and ask them now thank you hi, thank you so much for the panel so in the international development theory there is a process in the constant distributing and giving away free goods to the emerging economy then by actually distributing the tokens as a way of the bootstraps to introducing a new technologies as there are probably new things for the users and then what will be the next step if you think introducing by air dropping the tokens to the users what's the next step after that thank you did you guys catch that all acoustically let me I'll try if you could summarize the question first basically if you can airdrop tokens to users and that can be tied into new technologies and using those technologies like what's the next step for that is basically the question if we could perhaps tie that into also any closing remarks you have about how people can become involved in this type of work and your hopes for the future I was really disappointed with bitcoin when it came out and this is coming from a history of creating currencies and I thought well jeez here's a group that's just going to create a currency airdrop a bit of it into the community and expect it to gain in value and so I'm really excited about getting people to come together and say well we actually do do something and that can be the collateral that is the backing when I create a currency it is a guarantee against x that x is a new technology that you're issuing well that can be a wonderful source but that really needs to be articulated and guaranteed in a way I feel like backing it with tomatoes well those tomatoes can quite often be rotten and so can the technology and so really thinking about on-chain collateral in a real way that gives people guarantees against what that is if I'm holding this token it's a real question that there is a backer of last resort and I think as we talk about creating $2.6 trillion for all these things it's not like we're just going to airdrop that and expect those monies to have value the communities actually give it value and the communities have value these women trading their goods and services and doing their farm work that is real value and in fact the whole idea of grassroots economics building things from the grassroots up so I'm really hesitant about these schemes that go out and say drop our UBI token for everyone and that somehow value but it's like no these people they have their own value already let them just liquidate that value let them create tokens on it and create collateral systems behind it thank you echoing what Will said I think we need to be mindful of what is it that we're trying to accomplish in these vulnerable markets in developing nations these places lack these places have markets that are dormant and if we can find ways to activate those markets that's the fastest way to growth and community currencies are one way of doing it and there are just other financial products that need to be introduced and I think us in rich countries we actually have an overabundance of financial products we have an overabundance of debt we have insurance I think many people don't know this like your credit card has purchased protection so next time you drop your phone have the credit card pay for it so we have insurance that we don't even know about sometimes and in developing countries there's just an absolute lack of that so how can we start to introduce accessible and cheap financial instruments and reactivate markets I think that's the outcome that we're looking for and there's a liquidity issue too in terms of fractional reserve and how do we take say 10,000 euros and how do we multiply that into maybe 5x and why would you want to do that you want to introduce more liquidity and in some ways you're not increasing the monetary supply you're increasing the liquidity with the credit supply within that community and that's really important when you're trying to fill some of these funding gaps that I mentioned up there before but it's also really interesting too about emergency assistance and disaster so for example some of the stuff that Red Cross looks at is around parametric triggers and we do catastrophe bonds which is basically an insurance link security that funding is triggered once you hit some kind of you know like peril or something so an eruption of a volcano but this is a really interesting system because if you start to get indicators that there's drought you can then increase the credit supply without actually transferring any money it's like a false positive and then actually there is no drought then you can burn off the tokens or what you have and then bring it back down to some stability so it's kind of like a central bank-ish strategy I would just add like negative feedback is super important too and so like if a token is supposed to have some collateral behind it then that token should go away and there should be systems that allow that to happen in a safe way if there was collateral behind it it can move to other tokens Thank you very much to all of you we unfortunately have to draw this panel to a close but please do drop us all an email if you'd like to know more because I feel there are still many unresolved and open questions in this area so thank you very much to our panellists