What a great opportunity to be invited by Sorcha Mulligan and Bridget Greenwood The Bigger Pie to join Blockchain Ireland for a discussion on Sustainable Finance and the SDGs, with an enlightened panel of Victoria Thompson, Jannah Patchay and Sofie Blakstad, with Professor Joyce O’Connor BlockW . Sustainable Finance refers to any form of financial services that integrate in their inner workings, environmental, social and governance standards (ESG). What I loved the most about this panel is that everyone was real. No hype, no pretence, just genuine people trying to innovate and to use blockchain in a way that will liberate capital for the most disadvantaged.
Setting the scene for the discussions, Sofie Blakstad 🐝hiveonline ApS said, “We are starting to build the rails of a #distributed #economy for which there is currently no infrastructure.” Victoria Thompson Orora pointed out how many people are excluded: “1.3m people in the #UK have no access to a #bank account and 1.7b worldwide.” Jannah Patchay Markets Evolution asked “What are the functions that we need #money to perform?” and Dr Jane Thomason posed the challenge “We need to reimagine what people need from money.” Bringing it all together Sorcha Mulligan summarised the challenge for the Panel, “ We’re addressing the problem of helping SMEs to be digitized through blockchain infrastructure and become more visible in the national infrastructure contribution towards the Sustainable Development Goals”.
A worthy challenge and others agree. The OECD and others now see the potential of Blockchain as a digital enabler across the infrastructure value chain, unlocking new sources of financing and mobilising existing industry pledges to carbon reduction through establishing new financing platforms. The technology could bring visibility to alignment with sustainability goals by enabling countries and stakeholders to track data and information on infrastructure projects. It can enhance awareness and access by acting as a transaction-enabling infrastructure of new market models. There is loads of potential. Stablecoins, which could significantly improve real-time settlement of cross-border transactions are perhaps one of the most obvious examples. Take, for example, migrant workers who transfer money to their families back home. The goal is to make these types of remittance transactions frictionless, or at least reduce friction for the benefit of 1.7 billion adults who remain unbanked.
Sofie Blakstad 🐝hiveonline ApS community finance platform in Sub-Saharan Africa, “ We support the bottom of the pyramid communities of farmers, many of whom don’t have access to technology or literacy and we help all members of the community to get access to finance and identity via the community-based hub, which doesn’t require everyone to have a device. We have a three token model, which is based around a stablecoin, a shared token, and a debt token. So we can manage relatively complex financial fund structures and transaction structures.
This has been built for very high resilience with very low literacy, because we originally started in Niger, which is the least developed country in the world. Challenges have included having to work with customers who don’t have access to things that the developed world takes for granted. Technology can be quite immature and working with organizations in Africa tends to be very slow. The African financial sector is also very conservative.
However, some of the things that we thought would take three to five years are starting to happen now, partly because of COVID. It’s enabled people to begin to recognize the need for alternative financial structures like tokenized assets, which we were planning to do later on.“I think one of the real key things that this technology has enabled us to do is to start to build the rails of a distributed economy where there is no infrastructure.”
Victoria Thompson Orora spoke passionately, “Creating and reinventing the future of money is about making sure money flows where it needs to go the most and has the most impact. It’s about putting people and humanity at the center of every decision that that organization makes and tackling the hardest business problems that we’ve got. It’s not about technology. This is about values. This is about understanding that technology and actually applying it into a real world to solve real world problems”. But she made a powerful point that all the things that are supposed to stop financial crime, like AML KYC are actually barriers to financial inclusion.
Jannah Patchay Markets Evolution spoke about how to bring together everyone who’s working on really exciting technology, innovation and financial innovation and paint a really positive future for what financial markets could look like where we actually could build in the ideas of sustainability, fairness and equity from the ground up. DLT could be used with smart contracts and tokenization to create digital native financial instruments that have impact measurement built in. These could be linked to the internet of things, to real life sensors that measure what is going on in real time and continually update and reevaluate the instruments based on that. She concluded “That’s when you start to see the really transformative potential and the real ability to create financial markets that are fit for purpose, that do serve the needs of the many, rather than of the few”.
Dr Jane Thomason challenged the audience to use the Pandemic as an opportunity to redefine the future of the financial system. “I believe that the pandemic is charging us to have a major rethink of the global economy. If it’s anything, it’s a pandemic of inequality and it has brought into stark reality, the issues that we have neglected people, we have neglected the planet and we have this economic system that drives pursuit of profits, above all else”.
As Victoria and Jannah pointed out, it’s never a technology issue. It’s about the people, it’s about getting into the system. It’s about knowledge, trust and value. The biggest obstacle is dealing with financial and payment infrastructure that by its very nature creates the problems of financial exclusion.
If we can take a blank sheet of paper and re-imagine what are the requirements that we actually have of money? What are the functions that we need money to perform? This could be quite wide ranging. So we want money. We want a means of transmitting money between senders and receivers that are financially inclusive. For example, the government may want to ensure that their new payments infrastructure is able to enable policy to deliver better..
When asked by Bridget what is the one resource they need the most:
Sofie argued for speed, the money to get there quicker and enable the education of governments, international organizations and the general population.
Victoria concluded that it’s money at the heart of everything. Re-imagining systems, getting people to understand how you can do things differently. “I wish for special education and understanding. I think both policymakers and investors’ policymakers need to understand the opportunities that are available through the creation of digital native financial infrastructure.”
Sorcha concluded “If we don’t support our SMEs and we don’t build the technologies to help them digitize and to access infrastructure and to be visible, then it’s a humanitarian issue because it’s the people behind them that are all of us.”