The blockchain and decentralised finance

Ross McEwan, Chief Technology Officer, Wala / Dala Foundation

I will look at the attributes of blockchains that make them suitable for solving socio-economic and financial inclusion problems that globally affect so many people today. I will explore the use cases of and opportunities for blockchains that will allow us to create a decentralized financial ecosystem, and why I believe this is the future. Lastly, I will discuss the challenges and necessary evolution of regulation within this space.

Today, two billion adults around the world don’t have access to a basic account. This is due to a number of factors, primarily a lack of formal and verifiable identity, inadequate access, poor financial literacy, and unfriendly regulatory environments. In many markets, mobile money provided by the mobile network operators has come some way to addressing this. I will aim to demonstrate how blockchain solutions can further build on the efforts made so far, and tackle financial inclusion more effectively.

Blockchains can remove barriers to financial inclusion, namely borders, censorship, and opacity. Public blockchains, with the caveat that they are sufficiently decentralized and sybil-resistant, do not recognize geographic borders. This means that complex use cases, such as remittance, become technically very simple. They are also extremely resistant to censorship; provided consumers have access to the internet, it is nearly impossible to stop transactions from happening. Transactions on the blockchain are also immutable, and cannot be changed. They provide a single version of the truth: the transactions that occurred, and the order in which they occurred. Lastly, a public blockchain is transparent; this means that it is both auditable and traceable. This increases the accountability of individuals, corporations, and governments.

There are real use cases for decentralized finance, and teams around the world are currently developing the future. In particular, I will talk about self-sovereign identity and reputation management, lending, micro tasks, and the sharing economy.

I will close with a discussion of regulation around the world, focusing on emerging markets in Africa. I will highlight where regulation seems to be today, what is going well and what isn’t, and what should change in the future.

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