BBW23 – Day 2 – Blockchain & Global Economic & Community Development

[Music] good afternoon everybody uh my name is Maxwell degregorio uh I'm an associate at the milen institute's fintech program uh we're a nonprofit uh nonpartisan uh policy outfit in Washington DC uh looking at uh emerging Financial Technologies and sort of how they're being regulated and rolled out uh with an eye towards Financial inclusion expanding access to Capital and uh transparency and compliance and uh this after we're going to have a a cool conversation about uh how blockchain is uh intersecting with a Community Development space and so as we get started I I wanted to just start by going down the line and asking each of you guys to uh introduce yourselves and and sort of say how uh your your organization sort of fits into that Community Development uh uh puzzle uh and we could start with um uh P me okay hi hello everybody and thank you very much for the invitation my name is Petro p I'm the head of the economic promotion division of the city of Lugano Lugano is the economic capital of Southern Switzerland it's a small place as a matter of fact uh with less than 70,000 uh inhabitants uh it is the third uh Financial up in Switzerland after Sur and Geneva and today I think I will mainly uh illustrate what the city which means at Municipal level Switzerland has a federal system like the United States where we have the Swiss Confederation the federal state kentons which are the states here as well as the municipality so I will tell you what we are doing at Municipal level therefore the lowest level a project that is very close to therefore to the citizens thank you thank p uh Adrian Adrian Hill so I'm foundaries director of Economic and Community Development and director of Foundry deploy Foundry deploy is our business unit that oversees uh Bitcoin mining installation deinstallation troubleshooting repair refurbishment section and I'll get into that why that's relevant in just a second in addition to my roles at Foundry though I'm also a member of the New York State Board of regions which is our state board of education so my responsibilities there influence a lot of the work I do at Foundry and I'm super excited to talk to you all about that today just a little bit about Foundry if you don't know about us we're a wholly owned subsidiary of the digital currency group or dcg we're like the infrastructure arm and we also are responsible our pool for about 33% of all new Bitcoin minted so for those of you who monitor the men pool Foundry is the largest pool right now we brought that back to United States since chy to ban Bitcoin mining and so that's the company I'm representing today Matt uh I'm Matt Melbourne uh I'm a senior director at Republic largely focused on uh tokenized offerings um Republic is a private markets investment platform we're basically building the operating system for the private markets we've done uh more than $2.5 billion dollar in transactions across 2,000 companies um with 3 million investors uh on the platform uh I joined as one of Republic's first full-time employees um and uh most of what we were're doing and focusing on in the next 18 months is tokenizing the platform that uh we've previously done this uh investment through and um working with uh clients and partners like municipalities um and other governmental organizations as well as you know uh private markets uh projects on tokenization and uh fundraising via tokenized assets oh yeah thank you so much Matt to open up the conversation I wanted to first uh go to you Adrien and like a lot of what we've been talking about with with blockchain with cryptocurrency to sort of today and and maybe in general is we look at it it's a broad global technology we're thinking about International payments we're thinking about global settlements inflation in Argentina um but why is it important to approach this technology from from the community level or or and what are are our communities gaining from s participating in this ecosystem so a little bit about my background which is how I got into this space so Mike caller our CEO had just joined the Chamber of Commerce at the time I was working at the Chamber of Commerce overseeing Workforce Development and talent strategy for the finger legs region of Upstate New York Foundry was exploding exponentially so they were going from like a a employer of a handful of folks to over a 100 employees now with that kind of success in proximity to a city that has a lot of social problems so a little bit about Rochester we're second overall in the country as it relates to Childhood poverty third and poverty overall so you have this company that's a future focused industry in proximity to a city with some of the nation's greatest challenges so it's how do we connect ourselves to some of those issues in Rochester so Mike comes to the chamber he asks for names for somebody who can come and oversee economic and Community Development I meet with them I'm going to supposedly give them names by the end of our meeting he's like yo I want you to come work with us and I wasn't necessarily sold on our space just yet but the more I got to know him I got to understand there is is an inherent ethos in blockchain that says this technology is here to solve problems because a lot of Legacy systems have failed and so coming on the first way we wanted to leverage this new technology was in the most basic form possible we got high numbers of poverty and unemployment we have new jobs how do we create onramps into those jobs and so one of the first things I created when I came on to Foundry was the mining engineer Fellowship which was how do we take graduates who recently graduated from our city school district employ them at a gainfully employing wage so $60,000 a year in Upstate New York which is 200 times that of an African-American within our city and 300 times that within an African-American within our state so out of poverty instantly geography of work was an issue so we put them through driver's education bought them cars and then because literacy and numeracy proficiency was an issue we also have them going to Vin learning Kuman learning which is literacy Inn numeracy remediation multiple times a week to at least get them up to 12th grade proficiency so that was how it started right but then we realized if they're graduates of high school but not functioning at a high school level we have to go back so we went all the way back to the fourth grade and launched a program called defi which is defi with a Y it stands for decentralizing education for Youth and what that was was a math enrichment program to say we know we have to develop a pipeline into this future focused industry long before they get to the 12th grade just a little bit of statistical data here most of our graduates in our community start by third grade theying year and a half grade level proficiency by 8th grade you're four and a half years behind grade level profic proficiency so we went back to fourth grade to start that process we also rolled out a blockchain fundamentals course which will come out this year so we can start teaching them about our Technologies because we also think at Foundry people closest to the issues have to understand the capabilities of these Technologies to design ways to use and utilize it to solve some of these socioeconomic issues and then last but not least we just launched a nonprofit to house some of these efforts so we can start expanding the work that we're doing to other companies not just in our community but also in our sector no and I think that I think that sets the stage really well Adrian like as as of the impact that you can have in your your community when you're rolling out these Technologies it's not just the applications it's the employment it's the cultural shift it's the people that you bring in it's what you build around you and sort of uh another community that we have on stage with us that has been sort of actively building dived head first into that that blockchain space uh is is lugana and so Petra I I was wondering if if you could tell us about sort of your your story building out the the luga token sort of how that came to be a and why you know lugan a municipality in Switzerland decided hey blockchain technology it makes sense for us to roll out like we see a clear use case and we're going to go for it of course um the uh luga uh project luga is the name of uh the city payment token luga for as as as in lugan of course and I I always say that it is a one of the very few good fruits if I may say so of the pandemic um this project started uh as a as a response to the pandemic as a um way to support uh small retails um shops restaurants at a very difficult juncture H in in Europe in in southern Switzerland certainly um many had to close during significantly uh long periods of time uh during the So-Cal lockdowns um during those periods of course uh customers clients um moved uh to a large extent to e-commerce platforms and as a result of course uh the business uh decreased significantly so we thought that it would be Al our not only our duty but in our best interest as a city Administration to try to support as much as possible um these these small businesses and of course in in a federal state the Swiss Confederation came in during the pandemic with very strong uh um supports uh a lot of support the same happen at Canal level but we thought what can we do as a municipality right what can we do as a as as a city Administration and and this is uh uh why we um we start looking at um ways to to to to incentivate local spending and we thought well uh there is already a city card uh there was a city car that been in existence for about 20 years that um all gave to the the card holders U certain number of discounts throughout the city in a very genous manner not very well organized we thought technology can help us and we developed an app and in that app among other things we built a loyalty program and this is uh What uh uh um the luga is about at the end of the day at least until today the luga uh enables a loyalty program uh with a cash back uh we started at the end of 2020 uh uh by issuing this this payment token after a quite lengthy process where as Administration we had learn about the technology of course uh we had to learn about the regulatory framework we had to present our project to the Swiss Financial regulator to get a sort of approval so once we had done all that we started issuing the uh the token the payment token to give you an idea and this happened at the end of 2020 to give you an idea today we have over 12,000 citizens that have an active wallet which is quite a lot if you consider that the total size of the population Which is less than 70,000 we have over 400 uh partners that are shops restaurants service providers throughout the city we have between six on an average month between 6 and 7,000 uh transactions and um U today we can say that uh the payment token is uh supporting um local spending local consumption also consider that Lugano is uh uh in a when it comes to retail of course uh in a bit of a difficult uh position because it is surrounded by Italy and the Temptation let's say to cross the border and do your uh purchases let's say uh on the other side let's say in Italy is quite strong uh things tend to cost a bit less the exchange currency exchange Swiss Franks Euro it's also quite disadvantageous if you are a retailer uh or a business let's say in Lugano so um today we start seeing the first results and we think that this is indeed a project that uses technology uses the blockchain technology and at the same time supports something that is quite simple right which is uh retail small businesses throughout the city and last but not least it's also an initiative that helps the population the average citizens to familiarize with the new technology uh to feel more comfortable using it without using too many difficult words it's something very simple that the really the average person can use in its in his or cell phone smart thank you you wanted to jump in there agent yeah so um building on your point and congratulations on what I were able to launch in Switzerland so and it's in its infancy but I was at another conference and there's another city within our country who launched a coin and when I did a little bit of digging I tried to find out what was the utility and the use of that coin and disappointedly I didn't see a lot of use to that coin in particular so I I took it back to Foundry to say you know how can we come up with some kind of a coin or a token that will allow us to add value and again CU we have folks with high levels of poverty and so we have some Pioneers from The Internet of Things movement who live in our community so we met with them and we asked them like how will we be able to launch it but it has to have an actual utility for it so what they said is let's see if we can figure out how to kind of put data from cell phones from different applications that they use how can we maybe quarantine that information so that when whoever it is that whether it's a IBM a apple a Microsoft whoever might want to access that information there's a release of some kind of coin or token and then that would have actual value to it and so we're in this infancy but we're trying to design something very similar here but below the economic case there's also a behavioral economic case because in our community there's high levels of crime as well and so if we can make the case that there's actually ual value to positive productive behavior that it can also potentially be you know prosperous for you to behave in one way over another it can also help us try to deal with issues such as crime we've had a recent upticks and car jacking since Kia and Hyandai so that's also something that we're trying to do as well I'll probably get with you after this and ask more detailed questions and like I I think that question of of local currencies and Community Development is is is very interesting like how can you keep money circulating within your own Community within small businesses local Merchants uh and and to keep that money to so it builds up those those towns those communities and and I think it's it's a very interesting application of the technology to to be able to create those own ecosystems um and so but now it's sort of turning to uh to to mat um sort of we so we're talking about some of these public initiatives uh sort of like how we're getting Municipal governments involved how we're we're engaging with with with stakeholders the education system in some cases um and like where I I had a sort of a great conversation with with Republic a while back at at milin where where said they laid out a vision where they uh one of your colleagues said like public sector buyin is going to be that that first step to sort of broader integration of blockchain Technology into into the economy and and it was it was a great it was a great story and I I was wondering if you can sort of explain sort of Republic's vision and sort of why that you see this as sort of a a first step or or maybe a preliminary step to sort of building out something bigger absolutely and the um I think at Republic we see uh governmental or Municipal participation in the ecosystem very much as a uh a driver of potential Regulatory and legislative change uh for the industry so uh it it's Regulators depending on in the US also depending on who is currently in the federal Administration they love to hear stories about municipal or governmental um participation and uh Community Development aims to a particular technology and and their openness I think uh correlates with that so I think there's there's that aspect which is which is important for us you know Republic largely operates in the private markets and um in in in the private sector but we do have some uh public sector clients but in the private markets we do love to to hear that uh that public private partnership and uh and and and public adoption of the of that technology uh because it's good for the industry as a whole thank you very much Matt yeah and and so then like a a question sort of I had sort of building up of of some of the work that's happening in Rochester some of the work happening in in Lugano is is how can you how can you transplant the these projects how how can you uh like what what are the the hurdles that you're seeing to getting public sector Buy in when you you come at them with projects like what you're proposing and and then how sort of how how are you working through that process and then maybe like how can other communities sort of take what what you've been successful with building your own Municipal blockchain out building your own local currency how can you see a community like maybe Quincy developing like such a like a local currency or or how can another Community take these these education initiatives that Foundry has pioneered and build them out there um I Petro or Adrian you can sort of take a step Petro go ahead yeah so I so so I'm from New York and who else is from New York in here anybody this guy a couple so you got to be from New York to understand the moratorium that passed the legislature last year okay so there's a a 2-year moratorium on uh crypto mining in our state right now and there's also proposals from our State Attorney General's office to create more restrictive uh regimes that really will discourage actors from our industry to want to partake in New York state I don't want to talk too long but the the reason that this panel and this work is super important and make no mistake because whether a States like New York or even the federal government if people don't have tangible access to these Technologies and if folks don't understand why we're trying to do what we're trying to do this whole perspective of the Bitcoin bro or it's a handful of people becoming incredibly rich off this industry it's going to be the dominant narrative and we're going to continue to see folks who come after us just for sport because it's a easy kill and an easy win I lived in the New York State Legislature when we were fighting the moratorium Bill and myself and shout out to my colleague uh Kyle schneps who's on his way to Beijing right now to do a a talk for um ant Miner but we lived at the capital to talk about you know why this industry was so important in the work that we're doing because the Biden Administration is somewhat hostile to our industry as well so this work is super important because it exposes and introduces other areas of our industry to Everyday common lay people and if the average person is not bought into what we're doing you all there are dark days to come for our industry in the future so we have to continue to figure out what are some of these you know initiatives and efforts going on and how can we scale it to the point where everyday folks understand what a restrictive policy or law means for their livelihood and Petro the Lugo token is it a public or a private blockchain it is uh currently it is on a a private blockchain it is uh on the city blockchain which is our second experiment let's say our second project uh launched at the interal of last of 2021 so soon two years it's a a proof of authority blockchain with about 30 notes verified notes the city has a couple of notes the U universities the local University have a couple of nodes other vetted companies and and partners have have have the remaining nodes so it's on a private uh blockchain maybe uh just to to follow up on what Adrian was saying I think that as a as Municipality of course as public administration what you would do is uh whatever you do should be aimed at um making the life of your uh of your citizens of your constituencies uh uh better right improving it and we think that a project like this even if we take the technology uh aspect uh out of the equation right aims at doing that uh for the users the citizens it offers a consistent discount right so U it incentives a local spending by again I was saying offering a discount from the merchants uh perspective of course it's the merchants I might not have mentioned that it's the merch merch that Finance this 10% it's not it's not the city right it's not the the the administration but it offers them a way to become more attractive everything else is provided for free right the tools the marketing etc etc and ultimately uh to the users meaning citizens it's again offers an easy safe uh way to approach this industry to approach this world right because well who is behind the luga well the same guys who are sitting in the building is Administration you know exactly where they are becomes very tangible something that is often a little bit too abstract becomes all of a sudden very tangible and we try not to use again too many technical words to uh um allow people to familiarize to approach to approach this sector and I I think those are all very tangible points when it comes to like building Community Buy in like getting that trust that you need from local communities to commit to this technology to sort of move it forward and and in like these these last couple minutes like something I wanted to look at is like well what what are your perspectives on that that future for public private partnership in in the industry uh and maybe Matt you could you could start with this discussion but like I like there I'm sure from like the perspective of the federal government some state government some hesitancy like a lot of this action is happening with like local governments these these you know workshops of democracy that we have like in in the US a and like where where are you seeing certain movement where you seeing opportunity well for example um in the US uh Municipal security and Municipal debt is has to fit under uh a federal and state uh Securities regime so uh what that means is for example a privately owned uh broker dealer like Republic uh can work with a municipality to help them issue debt uh and Republic as a crypto focused company we can work with the municipality or government um to do that in a tokenized way um and we think it's super important for the adoption of crypto and def5 as a whole to get as many assets um and as many uh people participating in the asset class uh and in uh tokenized assets as possible because even if you have you take uh the the the defi maximalist or the folks that are pushing for full decentralization or um uh uh or or that that true you know uh crypto vision of where we started um to neglect working with uh centralized sometimes private blockchains or uh in in in centralized and regulated regimes like Securities Law or municipal bonds or um you know uh in in these regulated spaces uh it's important to not neglect trying to bring these traditional assets on chain because it helps the ecosystem as a whole so while we do face sort of uh opposition and and threat from governments I I also want to point out that there are folks in the crypto space that don't like what we're talking about here they don't see it as true crypto or true true blockchain and it's important that we we do this sort of thing to to educate folks about how to get traditional Securities and assets on chain and um and getting uh centralized and uh and and government organizations uh working towards a tokenized future no absolutely and sort of in those last couple minutes if there's anything like either pH or Adrian you wanted to throw on to that U like where how do you see sort of your your initiatives like moving moving into the future sort of like what's what's next for for lugana like what's next for for Rochester for we we keep adding features to well here we mainly mainly spoke about about the luga project we keep adding features and this is also the beauty of the technology right uh the sky is the limit as they say you need to be creative you need to have of course uh the necessary support to to get things done but this is what we're doing uh two weeks ago we introduced a new functionality hour app which allows users to move the payment token from one wallet to the other whereas previously it was only possible to send money from the user wallet to the merchant wallet right now if I want I can send a certain amount of token let's say we can split a bill at the restaurant or at the bar right I pay and I receive a share from from those who are having a meal with me for instance so we keep we we added an nft wallet also for other purposes so we keep adding features to keep we keep expanding uh the the app to to make it as and the wallet of course to make them as attractive as possible I think that this is a little bit the direction where we're going uh with the luga project absolutely Pedra so we harnessing that functionality that that the the ability to to leverage that change I I absolutely agree it's a great strategy Adrian did you have any sort of closing remarks on the future for the public private partnership that so right now um a lot of actors in our industry aren't even eligible for local state or federal grants or credits tax credits so I think the more we make the case of our value from an economic development standpoint the more I think government you know different levels of government will feel comfortable investing in our industry because ultimately we need that in order to scale up and grow so this work is super important well thank you all so much this was a great conversation I'm glad you could all join us and thank you so much Ian and Justin thank [Music] you