4 Takeaways From The OECD Blockchain Policy Forum
“Blockchain will help bring about a future owned by no one, controlled by no one but benefiting everyone.” — David Burt, Premier of Bermuda
Last week, UN agencies, NGOs, central bankers and technologists gathered in Paris at the OECD (The Organization for Economic Co-operation and Development)— a group of 34 member countries that discuss and develop economic and social policy — as the organization was hosting it’s first ever Blockchain Policy Forum. We at Celo were interested in attending to better understand how different regulators around the world approach blockchain, participate in the policy conversations, and to also bring some of our understanding and experience to the conversation.
The added benefit of course with an OECD forum is that the conversation is framed around blockchain impact and use cases for development, which is particularly relevant for us at Celo given the company’s mission to advance financial inclusion and help shape a financial system that benefits everyone.
#1 Development agencies and emerging countries are leading the way on blockchain adoption.
One of most encouraging trends that became apparent during the forum was that development institutions are cautiously but consistently embracing blockchain. It was fantastic hearing the World Bank VP and Treasurer Arunma Oteh talk about the first-of-its-kind blockchain bond issuance by the World Bank in partnership with the Commonwealth Bank of Australia last month, it’s success, the lessons learned and the institution’s appetite to keep experimenting.
And they are not alone in doing so. David Burt, Bermuda Prime Minister talked about country’s comprehensive ICO and digital asset business legislation which he hopes will act as regulatory framework for other countries. Ana Brnabić, Prime minister of Serbia praised the blockchain for remittances pilots the country was running and talked about the blockchain regulatory sandbox the country is looking to launch soon. The enthusiasm coming from government officials in emerging markets was palpable. And the key message nicely summarized the many conversations I’ve had with my colleagues at Celo in the past few months: DLT has the potential to drastically improve the lives of those living in emerging markets, the use cases — especially for financial inclusion — are numerous and the time to design for impact is now.
#2 Self sovereign identity drives much of the conversation around blockchain uses
Panelists and participants were in agreement that one of the most important use cases for DLT in the context of development is identity. According to World Bank data, 1.1 billion people do not have an officially recognized form of ID which is often a requirement for accessing healthcare, education or government aid. Lord Meghnad Desai — Emeritus Professor of Economics at the London School of Economics pointed to India’s pursuit of universal digital ID as part of the country’s poverty eradication strategy.
The problem is exacerbated in the case of international refugees or internally displaced populations, which have reached 100 million people, a historic high. In this context Bernhard Kowatsch, Head of the WFP Innovation Accelerator described the institution’s experience with blockchain for ID for refugees in Jordan and the firm decision to keep exploring benefits the technology can bring. The entire conversation around self sovereign identity resonated: providing a secure, fraud-resistant identity system, centered around phone numbers for our users is one of Celo’s technological innovations and a fundamental part toward our mission of financial inclusion.
#3 Crypto-assets as instruments of value storage and preservation are here to stay
It quickly became evident that crypto-assets were to be one of the main topics of conversation at OECD Blockchain Policy Forum. Representatives of various regulatory bodies agreed there is value in crypto assets. The focus for the stewards of the financial system (Treasury, Central Banks etc) was on the use cases of blockchain for increased market liquidity. Aerdt Houben, the incoming chair of the OECD Committee on Financial Markets referred to crypto assets as the new asset class that will trigger the tokenization of every asset class as we know it.
However for development agencies like MercyCorps or startups operating in emerging markets, the main advantage of crypto-assets was storage and preservation of value, particularly in cases of economic or political volatility. Stable coins were mentioned as a way for individuals in such countries to ensure the property rights and frictionlessly engage with the wider financial system. And people know that: cryptocurrency adoption is higher and rises the fastest in countries where inflation causes individuals to lose their assets. This scenario has repeated itself just this year in places such as Argentina, Brazil, Turkey or South Africa. And it’s one of the many reasons Celo’s thinking on stable coins resonates so much when we talk with our partners in emerging markets.
#4 International and cross-industry community needed to bolster the blockchain ecosystem
Speaking of partners and partnerships, almost by osmosis, it seemed that the community — a concept so fundamental to the crypto world, was fast taking roots among those at the forum. Greg Medcraft of OECD invoked the need for collaboration and cooperation in setting a common set of rules to guide innovation and adoption, especially when dealing with a global technology such as blockchain. Geoffroy Cailloux, Head of Savings and Financial Market Unit, French Treasury called for multilateral discussions on regulating crypto-assets as companies are agile and can shop around for friendly jurisdictions.
But not a community of regulators alone. OECD Secretary General Angel Gurria made it very clear that development institutions, private actors as well as subjects matter experts were invited to the table. And that their participation was key to building knowledge and best practices in the ecosystem. This community-driven approach is best exemplified by OECD’s planned launch of a Blockchain Policy Center who will help design and develop materials that will educate and build capacity in the public sector in relation to DLT as well as provide a forum for discussion and exchange on market development, blockchain impact and policy.
Ultimately it was a policy forum. And the sea of suits strolling on the halls of the OECD Chateau — coming from UN agencies, NGOs and humanitarian foundations, Central Banks and Treasury directors, looked as if it belonged more at the IMF-WB Annual meetings than the usual blockchain meet-up. Here we were 10 years after the fated September that shook the financial markets to their core and the crisis that burned through the international financial system. And a few months short of the 10 year anniversary of the coin born out of those ashes and the blockchain that started it all.
Policy makers may have taken their time to pay attention to blockchain but, judging by the participation at the forum — 1000 delegates from 70 countries, it’s safe to say blockchain has their attention now. David Burt, the prime minister of Bermuda encouraged the Forum participants to use blockchain to help bring about “a future owned by no one, controlled by no one but benefiting everyone.” Celo shares that vision and we are excited to be part of creating that future.
Beyond the policy insights, attending the forum was truly inspiring. To see the extent to which our purpose — to solve real-world problems such as lack of identity or access to sound currency, empowering individuals by facilitating their access to a new class of assets — resonated with the participants and shaped the policy priorities was invigorating. We left excited and motivated to continue our work and deliver on Celo’s potential for impact.