J2 SAY 06 Sandra Ro Blockchain for good

hi everyone thanks for giving me approximately 25 minutes of your time to talk about some things that I'm working on for those of you who don't know me in the space I am the former CME digitisation head so Bitcoin futures out of CME Group which is the Chicago Mercantile Exchange that was our first major product that took us about three years of internal discussion to get out the door I left CMA back in July of 2017 after pretty much my entire career in banking and you know established companies to go work blockchain for social good and why why would someone who's basically an ex-banker and corporate person actually do that I think for the first time I see a technology that has the potential to actually impact individuals in a way that the internet just didn't do not in the way that I think is about financial empowerment that is actually about helping those who are most vulnerable to have in my case I'm really focusing on financial access so I want to talk to you a little bit about is a company called un Corp and it stands for unleashing wealth in nations and the concept came from my business partner and co-founder julius at kenya me who's the MIT entrepreneur right now and he basically he's nigerian by descent but he's also French and he's American so the global citizen and he saw a world where people are actually transacting everyday they are at the village level at the market level they have assets they have things actually that they're treating every single day that has a value but here's the thing in the developed world or in our world where we live today in France or in u.s. or in UK we don't recognize that why because it's not formally documented and it's not in a formal market system but here's the thing it exists and it has value so what happens when you actually start documenting these things and you actually start recognizing people having assets and value this is not a new concept for those of you who are you know actively looking in this space Hernando DeSoto wrote a book called mystery of capital which you should look at it's written back in the 1990s and it's still relevant today about the fact that there's nine trillion dollars that they estimate of value whether it's in land or assets sitting in developing nations that's just not documented and as far as the developed world is concerned does it matter and doesn't count to me that doesn't sound right and so one of the things that we're gonna do and I'm gonna talk about today is some of the things that we're doing to help rectify that we are certainly not going to solve all the world's problems but we're picking a piece of it and we're going after that and I'm gonna give you some tangible examples of how we're doing that so here's the thing I want to talk about right before I get into you in we've got a perception problem and this is why I'm gonna mention this here today I spend most of my time talking to big enterprises and big banks and central banks and politicians about blockchain and what's going on in this space and we have a little bit of an issue with respect to sort of marketing and hype they still think a lot of this and this is a problem because this is not taken seriously and there's misunderstanding still in the space which is why for those of you who are going to get into blockchain for social good I really employ you that education at even the most basic level of everyone in anyone you can speak to who's actually interested educate them spend the time on education even now after nine years of Bitcoin in several years of ethereum we still need that and I have a little problem with and I've deep respect for mark carney the you know head of the Central Bank of England but I have a problem with that sort of highlighted bullet point there which is that being part of financial systems or some financial markets is actually a privilege I actually don't believe that and I think he meant that in the context of you got to be responsible when if you're participating but actually I see it as a right you need to have the right to be able to participate in financial markets in order for you to actually be able to help any kind of wealth and recognition that you own assets because if you don't have that recognition in the market in the markets or in financial system what are you left with very little actually in terms of options and this is a true problem in many developed nations so where are we today I'm hoping actually in 2018 and I'm spending a lot of time on the road these days talking about this topic because I think it's critical we need to start changing the dialogue as much as I love the ICO models and and and all the stuff that's going on in crypto we really need to change the model around what are we using blockchain for and how is it actually going to help people and how is it actually going to potentially solve real world problems and I'm a very practical person so I'm gonna give you some practical things that are happening today and hopefully that'll give you food for thought because there's a lot of greenfield and let's face it we need a lot of people getting involved to make the sea change that we need so this is really about how do we change dialogue this year I'd like to hear more conversation around what blockchain is gonna do for people and problems in society then I really want to hear about you know some of the other stuff don't get me wrong I still like you know the crypto stuff so here's the thing I also believe in you and you may disagree with me and again this is all just my opinions I'm a capitalist I actually believe you can actually make money and do social good but the two are not mutually exclusive and actually you do need to be for-profit and I will tell you why in most cases I think you need to be for-profit because I've spent the last decade in and out of Africa and different parts of developing nations I will tell you that the problem of dependence is a real cultural problem right now it is not about empowering people to be self-sufficient a lot of what's going on is actually people dependent on handouts and let's face it if somebody gives you something for free it's nice but if they give it to you for free how much do you value it versus something where you actually had to work to get it think about it for a second it's no difference different any other culture in many ways the problems that we have today is because we don't have economic sustainability in most of these countries and the handouts that are being given are not actually helping so I'm gonna now delve into sort of what we're doing with unleashing wealth in nations we did a project and when I say we my business partner did project in Senegal and Laura Mali in 2015 and then we're doing a project in Cameroon 2018 as well as a project several projects in Mauritius and these are our test pilots to actually scale out I call it ooh BRR izing our model without the bad culture which means we want to go into pretty much every developing nation that has a rural based agricultural base for an economy but why agriculture why are we focusing on agriculture to begin with well here's the thing we all eat we all need food I know that sounds really obvious but I think sometimes develop nations forget that it's not just coming out of the supermarkets it's coming out of real farmers tilling the land still today I have been to many plantations in Africa I've sat with the farmers it is hard graft for anyone who wants a dose of reality like of what real life is like go and visit a farm for entire day and work from 4:00 in the morning until you know late afternoon it's hard graft and I have deep respect for farmers who are out there in the world because they feed each one of us in in their own way here's the thing the farmers also get an unfair deal if you look at a supply chain in any physical commodity if there's ten dollars or ten euros of value that the end user is paying how much do you think the farmer is getting probably in most cases a dollar or less or euro or less do you think that's fair I don't so here's the thing if you don't think that's fair and I'm not here to supply it change the supply chain I'm focusing on a very specific part which is the source of the problem which is at the farmer level okay that's where I'm gonna focus any one of you who wants to solve supply chain problem please come join us I'd love that I don't want to change that $10 to 10 euro value I want to change what's happening inside of that supply chain to put another dollar or another euro into that pocket of the farmer that's all I want to do but sounds easy but it's not so Bill Gates made the right point here part of the problem is trust at a very fundamental level I've been shocked myself and I place shouldn't be after all these years about how basic information does not happen at the source level meaning information about which farmers are doing what how much yield they have every year what are the prices at which they're actually getting paid this stuff is not documented in many many areas in any sort of form not even on paper and it's shocking how little information governments organizations often have and of course it's all siloed so how do we solve for that well problem statement is pretty obvious and I've named a bunch of things they're not getting fair prices for the commodity they sell they are not getting verification that they own things guess what if you want a cow it's got value if you've got land in a house it's got value but most of these things people wouldn't even begin to be estimate what their value is because they just don't know they have no points of reference and again this is about lack of transparency and lack of information and guess what who thrives in a world where there's very little information intermediaries thrive and brokers thrive in a world and don't get me wrong I think there's always room for middle men or middle people who actually add value but are upon investigation you will also find that a lot of them do not add value so that's an area of improvement market data hedging this comes a lot later in life for the farmers but long story short there's a whole laundry list of things that they don't have access to let's start with basic information okay so how are we gonna do this well I'll give you some practical examples of how we're gonna do this mobile phones 5.4 billion people are gonna have mobile phones before they have running water or electricity to me that's very sad but if you believe Cisco statistics it's probably true if I go to most villages in Tanzania or in Cameroon in many places I find that the farmers have mobile phones and smart phones even but they may not have running water and electricity especially not one that services that are reliable certainly not so let me just give you a recap of something we've already done and we learned from so in Senegal and Mali there's actually a picture of my business partner there Julius he's the guy with the khaki hat in the little bag wearing khakis and a white shirt and those are the village leaders with him we're taking a village model approach so in a village everybody knows each other in a village everyone knows kind of everyone's business whether they like it or not what do you take that village model and you digitize it so let's record it on a blockchain okay verification how do you prevent somebody from cheating because in my world I come from trading I always assume there's a cheer out there I always assume that there's someone out there who wants to cheat the system just a little bit or a lot well you got to get the cheaters out so there needs to be a reputation index and there needs to be an ability to actually ferret out the people who are cheating very quickly because it becomes a toxic situation if you let them in for too long right so in this network it's a village model people know who they are and they also know someone cheats it will be publicly disclosed and that means your entire villages reputation index goes down because you've screwed it for everyone else that sucks and everyone's gonna know that so there's some mechanisms in place that we're gonna be looking at that basically prevent or at least mitigate we can never stop cheaters from cheating if they want to cheat but what you can do is actually find them out quickly and kick them out that's the key because it hurts everyone so livestock were recorded so in this very into the 2015 pilot just to give you an analogy of something that can happen without even they weren't expecting this so they recorded all this livestock they recorded actually half a million farmers nearly half a million farmers worth of identity and land and livestock and guess what happened and all they did was put her on database because in 2015 blockchain really you know and come to the fore at least not in terms of a practical solution so they got a call and they did this through a cooperative and they got a call and they said Oh Julius and Julius is my business partner we got an order order for what we had an order for a thousand slaughtered lambs every month from Saudi Arabia well how did that happen they found out we had a registry what oh yeah they found out we had a registry then they called the co-operative and said hey is this for real or all these you know animals registered with these farmers actually in place and suggest they exist well they got a standing order for a thousand slaughtered lambs every month they'd never received that kind of bulk order before in their lives and the Saudis the Saudi Arabian group that found them found them through chance in many ways just because it was documented somewhere it's a small example but here's direct impact for you that's direct impact right and to me if you can do that across regions it matters to everyone all those individuals who are making that money the next level though that we I would have done if I were part of this program is I would have added trading platform or a trading mechanism whereby prices would be transparent because I have a feeling they probably just said here's your price and then they said sure I'll take it they wanted the money we need to kind of up that sort of price transparency so that was the example in Senegal I'm gonna give you an example in Mauritius that actually helps governments and the reason why we also need to help governments is because often governments don't realize that they need to manage their natural resources and it's something that's actually coming in to for more and more Puerto Rico is actually a classic example they have had plants out of their island which are indigenous to their island that have resulted in two blockbuster drugs in actually global blockbuster drugs one in I believe birth control and the other one for headache I could be wrong about that so don't quote me but long story short they have received zero in terms of royalties imagine if islands in particular who have indigenous plants can actually manage their own natural resource intellectual property imagine if they got a stream of royalty what they could do with that imagine if the researchers who are working on cancer research or medicinal research of some kind could actually get credit for the fact that they worked on this research and if there is a blockbuster drug or a skincare product that somebody decides to buy for like 300 euros a jar in France and you know can actually benefit those who actually helped with that research to get to that place why should it only go to the pharmaceutical industry or to the cosmetics industry this is about fairness again this is about helping governments manage their natural resource intellectual property and so when you think about the power of that guess what I think smart contracts I think blockchain this is pretty obvious and Mauritius we've actually been mandated to document a group of their indigenous plans which have already been identified and it's being backed by the government to work with us to do this even better we've got a legal framework because here's the reality so what you've got these documented on a blockchain the practical reality is if someone decides to take it where are you going to dispute it what are you gonna do about it if someone actually takes your plan well you need recourse you need to be able to in at a country level you probably need to pass a law that says I'm gonna penalize you for X if you take our plants and we we can verify this with DNA and if you genetically modify it which also they do we're gonna also be able to identify that and so you will have to pass laws at the country level to be able to make sure that that doesn't happen or if it does happen you can enforce it but here's something even better the United Nations World Intellectual Property Organization is based in Geneva with any luck there will be a legal framework that will help I have a global umbrella legal framework to actually enforce this so imagine if a group of islands actually had an issue they have some recourse that could be recognized in international courts again this is new stuff but you've got to think about things just beyond documenting there's actually a bigger set of issues that need to occur or sorry things that need to happen in order for when issues occur for you to actually be able to resolve them so that's one practical example hopefully you'll find interesting we will be implementing this very soon in the next few months we have a pipeline of countries and islands who are looking to document their plants I've been actually really pleasantly surprised by the amount of inbound we've been getting and it's not even a project we're advertising so let me talk about I'm gonna give you some final thoughts how many minutes do I have left okay I'm gonna give you some final thoughts but I do want to actually just touch about talk about Cameron for one second because I mentioned agriculture earlier in Cameroon populations about 23 million people they think over 50% are agriculture based so let's just say 12 million farmers or related to farming most of them are small shareholder farmers they have documented 1.6 to 1.

8 million farmers they estimate they have a database which is good but hold on wait a minute 1.6 million out of what they think is 12 million were the rest of those peoples identity that was my first question we were talking to the government well guess what they're not and that's a real stark example so what are we gonna do about it the government's working with us to hand over that set of data we will clean it up we'll work with the cooperatives we'll start documenting the assets and we will look to take that 1.6 million to 3 million to 5 million to hopefully as many as we can it's difficult it's a huge region for any of you who understand or know about Cameroon there's some political issues at the moment there's a lot going on they have a lot of constraints but we got to start somewhere at least we're not starting from 0 we are working with the cooperative's as I mentioned before we're applying a village model and that is the Cameroon 2018 project that I mentioned we will be starting to do that we've also been mandated to launch a mobile physical commodities they're calling an exchange but I call their platform it's basically a place for farmers to come and start trading that will allow for price transparency that's gonna be critical for people to start negotiating better pricing and to me that is the only way we're going to put dollars or Euros into their pockets so step by step Vanessa mentioned a number of steps that are critical here we're covering identity recovering asset registration we're covering access to Financial Inclusion I'm not planning on being a bank but I'm we're partnering with a lot of other institutions to be able to offer financial services all this stuff is intertwined and for anyone to think that they can just do one piece and they can just build in exchange for example it's not gonna happen and I come from the exchange space I've looked at most of the African exchanges and there's reasons why they don't do well most of them don't so let me leave you with this final thought on a couple other industries that I have spent some time on the ones in blue are the ones that I'm actually involved in various stages on different projects the ones in black are just things that I think are really interesting from a social good standpoint there are a number of problems vanessa mentioned a bunch in the environment space i think real estate is going to be a huge one housing is one of the single most biggest issues in the world with respect to the cost of living people have jobs and they can't afford an apartment or a place of their own this is a problem and yet social housing government institutions seem to not be able to tackle this problem I've moved back to New York City from London I am shocked by the level of homelessness in New York City and they spend billions supposedly on this or are hundreds of millions at least and yet they're still not able to tackle this problem I think we need new ways of looking at this home affordability is an issue and the real estate market needs a little bit of a shake-up entertainment media I think that's going to come into the fray I mentioned that we're helping independent artists raise capital that's the spot that we've chosen in film and TV I know there's ton of stuff going on in music I think it's really exciting for any of you who are interested los angeles it's actually a real hot spot right now for a lot of this media entertainment gamification is coming into play as well as VR AR so I think there's gonna be some really interesting things coming out of LA in particular as well as there's cool stuff happening in Berlin Germany in general energy energy is one that also Vanessa mentioned earlier I think actually this is the single most pervasive problem that we are going to look to tackle but it's gonna be an issue because there are incumbents there's laws of regulation it's very much to me very similar to financial services in the way that you're dealing with some behemoths and it's gonna be really really hard to move the dial but I love what I'm saying with certain companies you know looking at different models of the way we consume energy and the types of energy we consume so I'll take I don't think we have any more time but I'll happy to have conversations after and I really appreciate your 25 minutes should we take okay I'll take a question [Applause] so I spent a long time living in Burma and there is a place where you have something like 80% smartphone penetration it's crazy it's just happened in the last three years pretty awesome right yeah but there's a big problem on digital literacy then so there's a really famous example with persons that conference this is how many people use the internet on a daily basis and maybe 20% of people hold their hands up and he says how many people use Facebook on a daily basis and everybody raises their hands so there's a huge education problem when it comes to to digital literacy and so my question is how how big of a challenge is in your work for for getting people up to the level where you can even mention the word blockchain and people know what they're talking about I'll be very frank with you um most of my farmers they might hear the word blockchain but I don't expect them to know that there's a blockchain powering behind all they need to know is they've got a UI an app that is as simple as we can make it and we're also looking at French we're looking at because the countries that I've mentioned are predominantly french-speaking we're looking at voice recognition for identity we're looking at solutions that are not what I call developed nation solutions so we believe that everyone in the countries that we're gonna be going to do not have government-issued ID we actually think they will have to use different ways of actually solving the problems around identity and luckily there are a number of institutions that were working with and partnering with we're already tackling that it's a complete mind shift change for those who are building companies in the US versus let's say Cameron we're actually looking at it from how do we take this tech and apply it in a way that makes sense for people on the ground and I didn't talk about this but by the way we also are looking at Wi-Fi solutions satellite solutions partnering with people because here's the thing we can't afford any one of these guys to actually pay for the data that they're going to be using and so this is you know we're looking at this in a holistic way which is why I said this is not an easy problem to solve but we also don't believe in solving this problem in a silo it just doesn't work it breaks down once you realize that a is connected to B is connected to C is connected to D you just you have to start addressing all of it and it may not be you yourself doing it but you need to partner with guys who are already working on various elements of that problem it's all interlinked believe it or not I didn't mention this one as well roads are a massive problem not highways but private roads on these plantations I spent I went on 18 kilometers should have taken about 20 or 30 minutes on a normal Road it took us an hour and a half to two hours why because literally we were on a roller coaster the worst potholes have ever seen Ironmen potholes they're craters but these are the roads in in some of these plantations so there's more than just the tech issue there is also like real physical world issues some of which we will tackle some of which we just can't are outside of our purview any other questions so thank you for your presentation and I find it fascinating and I have a lot of I have a lot of hope for the change that you're you in your work I do too which is wrong we spend a hundred percent of time looking a break though you made a comment early on that I find somewhat interesting and I my knee-jerk reaction is I guess negative you mentioned that you can't be not-for-profit but you have to have a profit motive because of the handout culture and I just I'm just curious as to what I don't want to project a lot of negativity on that cuz I I'm sure that I misunderstand yeah I don't want you to take this the wrong way actually nonprofits are critical and I'm a big philanthropist I absolutely believe that there's a role for nonprofits I mean about sustaining Kannamma sustainability is if we're going to actually have societies that are able to sustain themselves and another you know if I had another hour talk to you about Agrotech I want to build agriculture technology coming out of Africa to the rest of the world okay this is where people will be able to then have jobs be able to flourish this is a different area to me that is critical next to the nonprofits who are doing the work that are mission critical let's say for disasters or for you know immediate need I'm not feeding anyone like you know we need nonprofits that actually help with basic needs I'm talking about how do we actually promote structures of economic sustainability because that doesn't exist and the more governments I speak to and the more people I speak to that's one of their criticisms about some of the sort of development programs that are out there they're not they do not promote a culture of innovation of Independence of empowerment and that's what we need so I apologize if it came out wrong but from my perspective I'm focusing on for-profit businesses that hopefully spawn a whole bunch of other for-profit businesses because that's people power ultimately an independence yes so basically through blockchain you will create a capital market and not from non existing sources so we have a primary market and then a secondary market until the blockchain investors will be able to make money so basically you're creating new markets for investors so what I think about exactly sorry to cut you off thank you absolutely so when I think about our ability to create next generation market infrastructure guess what countries that don't that have very little or no infrastructure have the advantage because you start with three of a blank paper right so then now can realize how important is their governance on blockchains having government on blockchain blocks in governance governance oh yes because this block block chains you are talking about they are the foundations for this new capital markets so the government rules on this block chains is the new SEC yes secured an extension let's see how we evolve again we're in new chartered territory it could be I would love to see how we apply smart contracts in a way that mitigates some of the frictions that we have right now in the financial markets so in so far just to give you an example in Cameroon most likely we will have the trading platform peace be a regulated entity out of that country which means if that is the case then we will have to come up with mechanisms on what the regulatory piece means and how much of that we can code into smart contracts and how much of that actually requires a separate body of physical people overseeing things and by the way I'm also happy to be challenged on my assumptions and views too because at the end of the day these are my views and it's the approach that I'm taking but if we don't all collectively help each other and push each other sometimes in a constructive way we're not gonna solve these problems and for me it's the first time in over a decade that I've been in and out of Africa and other developing countries where I am really kind of bullish on what a bunch of different tech together can do and I think the mobile phone as much as I love blockchain the mobile phone is really kind of the thing that's done it for us in terms of our ability to access individuals so once you register they're farmers so there's some kind of Facebook profile and it says I'm able to produce some kind of milk but you need to connect the consumer with the producer with some kind of distribution so there must be some kind of uber for milk or whatever so how do I mean by the trading platform it'll be a very low level I don't I don't want you guys to think about stock exchange the way it works in the developed developed world I want you guys to think of more like an auction process or what we call an RFQ which is a request for a quote type of situation it's very low level but the idea is that you start putting this on a digital platform so that it can be recorded and you can start executing trades on a digital mean so that you can have historic pricing as well as you can also start getting analytics around price variability so here's the thing in today I don't know how many people know this but in the cocoa market or the coffee market you can get a futures price because one of the big exchanges in Europe actually has the cocoa price it's a futures price that is not the local price of things so here's the reality if you were sitting here as a commodities researcher and you wanted to actually get real live pricing of cocoa markets in Cameroon Brazil Vietnam I don't know how easy that would be you'd have to call around to a lot of people and I'm pretty sure it's not real time that doesn't exist today but imagine if we could start linking markets together imagine if farmer sitting in camera could actually look to see what his neighbor in Nigeria or Gabon is doing that doesn't exist today you can compare your real estate pricing in your neighborhood now that didn't exist five date five years ago either I mean five or ten years ago so you know price transparency means a lot so we gotta start somewhere thank you very much for a very well-done presentations enter your your presentation was called watching for good and I have a question regarding taxation system so system of taxation is pretty flawed I mean it's pretty messed up it's one of the reasons for a lot of different problems and putting things on blockchain will create a lot of transparency I would solve many of the issues that that we are facing right now and we'll untie a lot of resources to invest into a lot of different areas so have you done and you work there in this case and have you have you done yeah absolutely thank you for that question it was regarding taxation if we've ever had thought in any thoughts around this absolutely so look how am I gonna get government buy-in you get government buy-in by two things you they're either gonna get some level of taxes or they're going to get their majority of population is agriculture based so they realize they do something good for farmers it's more likely they're gonna stay in power so here's the thing about tax farmers don't like tax they actually don't want to register stuff because of tax but we are there are several solutions out there one is one that was done by the former Prime Minister of Haiti his name is Laurent Lamont and he's been working on a micro tech solution I'm using blockchains whereby literally within every transaction in a network you just literally take a tiny piece tiny fee and that just starts aggregating into a quote/unquote micro tax for the government and then the government lays off because they're getting revenues and it's very transparent it goes directly to you know let's say the central bank or to the most likely the Treasury Department of a given government and if someone does try to monkey around with the accounts they can but it's gonna be pretty hard to unless they actually siphon out the the wallet because it will be transparent in terms of what's gone into the wallet these kinds of things are being looked at we probably will add some form of micro tax solution for us to be able to keep government's happy by directly at let's say on the trading platform if there's a transaction done we literally move a very small fee incentive to two to the wallet of that's owned by the government and that way it's it's very clean the other thing I worry about which I didn't mention a lot its corruption anyone who thinks that they're gonna work in a developing nation and there's not gonna be a shakedown especially if you're successful I think again there's gonna be a shakedown especially if you're profitable at all so how do you avoid the shake well you're gonna get shaken down but what you can say are you know things like and this is where blockchain can help is transparency and documented transparency if taxes are being paid into an account and it's very clear that it's been paid the middle guy who's trying to like because middle government officials sitting in a town somewhere is probably the most likely who's gonna try to shake you down you say all right well I see you said you need more money okay but you know we're paying actually this and it's going to the central government will have a word with them about the fact that you said you need more money and hopefully you can create an aura of a bit of shame actually I would say for for people trying to shake you down but I actually think it's the problem that we are going to face and we have several things that we'll do to mitigate it but it's a challenge it's there's no easy answer for for the corruption and the challenges obstacles people will put and I haven't even mentioned sabotage because I don't want to go down that dark road but there will be that too so thank you I really appreciate your time I think it's lunch time [Applause]