March 14, 2021

We are introducing some thematic series into Barefoot Innovation this year. One series will stretch our collective thinking out into the future and try to envision how technology will change financial services, not for the next few years, but over the next decade or two. My working title for this theme is, the Thinkers. And so we’re starting with Pindar Wong.

I met Pindar virtually last spring at the Vaduz roundtable on the future of finance, hosted each year by Prince Michael of Liechtenstein (I’ll link to the show notes of my episode with the Prince from 2019). Pindar has a remarkable background and very impressive reach, but what really stayed with me was his vision about the future of technology and the future of money. I think many of you will react as I did to the ideas he shares in today’s show. We recorded our talk in the morning for me in Washington DC and at nearly midnight for him in Hong Kong (which probably accounts for a few sound glitches you may notice as we talk). He predicts many, many things that I can’t picture - and in some cases, that he can’t yet either -- but he is urging us to stretch to think about them anyway.

Be sure to come to the show notes, or just Google Pindar Wong, to look at his remarkable resume. It includes having dropped out of his PhD program to launch the first ISP in Hong Kong and becoming involved in financial cryptography in the late 90s. He was instrumental in the early internet governance efforts that led to the creation of ICANN (he was its first vice-chairman), and he thinks that same kind of deep disruption is underway now in finance. Comparing it to the internet, he asks us to imagine the thinking mistakes we are likely to make on how to guide all this change.

Pindar thinks that technology advances like cryptocurrency are “unbundling” the functions that money performs, separating money’s role as a store of value from its roles as a medium of exchange and as an account of record. If that shift takes hold, we would see a fundamental change in how money moves and is used and what forms it takes. He suggests that our traditional notion of store of value is based on human time scales, and that machine to machine money, with algorithms exchanging with algorithms, creates completely new challenges involving fundamentally different needs, and with big implications for public policy. It won’t work, he argues, to figure out the policy by reacting as the technology evolves. Instead, he thinks we have to push ourselves to project forward to possible future scenarios.

For example, Pindar predicts that individual AI’s will have to become persons under the law, much as corporations did, and take on the traits of agency and accountability. He reveals which country is working on novel legal concepts like a bill of rights and responsibilities for AI’s. He talks about crypto switching us from legal frameworks to algorithmic self-enforcing mechanisms -- what he describes as a “funny blend of the rule of numbers and the rule of law.” He foresees the need for KYM -- Know Your Machine.

Naturally, I asked Pindar what could go wrong. It’s a lot. He goes through the need to move from an internet of threats to an internet of trust, to use the power of crypto to make hard assessments of threats and losses, and then to get them aligned with incentives for the behaviors we want. Citing the old saying that people rob banks because that’s where the money is, he asks what will happen if most of the money is in decentralized wallets? How will those be guarded?

And in case these ideas aren’t sufficiently thought provoking, he suggests that we explore a new yin and yang concept of money. Traditional yang, or “male,” money is zero sum because its role includes being a store of value. But Pindar argues that up to 30% of economic activity is informal -- that there is “missing” money, which he thinks of as yin, or female. He thinks if we formally used both together, we could enable much more flow of commerce, and more stability and what he calls, digital abundance.

When I asked Pindar for advice on building a better future, he talked about failures of imagination and the need to expose ourselves to much more adversarial thinking.

He said, “embrace the heretic.”

More on Pindar

1. Bitcoin Enthusiast. Advisory Board (Coindesk)

2. Co-Founded 1st Licence Internet Service Provider in Hong Kong (1993)

3. First Vice-Chairman of the Board of ICANN

4. Commissioner – Global Commission on Internet Governance

5. Serves on Hong Kong Innovation and Technology Bureau

More for our Listeners

March is Women’s History Month, and we at AIR are marking it with a special project. From March 22-25, AIR is hosting the Women’s Economic Empowerment TechSprint & Conference in collaboration with the UK Financial Conduct Authority. The conference will help raise awareness of the critical financial issues facing vulnerable women, especially amidst the COVID pandemic,  and to generate potential solutions. We’ll also be exploring careers of women in regulation and in technology. Demo Day, on March 25th, will feature a dynamic roster of keynote speakers, innovative solution presentations, and exciting awards. With a spirit of women helping women, most of the sprint teams as well as all of the speakers and all of the judges are female. It will be an amazing event.  You can register for the four-day conference as well as Demo Day here. Make sure to join us!

Next up on the Barefoot Innovation Podcast is Sharmista Appaya and Ivo Jenik of the World Bank and CGAP. I will also talk with Paula Hunter and Lesly-Ann Vaughan of Mojaloop, Rob Nichols of the American Bankers Association, and Douglas Arner of Hong Kong University.

Virtual South by Southwest is coming up this month, including my March 16th session with Cleve Mesidor about diversifying the tech world. For those of you in Asia — or who do well with time zone challenges — I’ll also be speaking at the Australian Regtech Association’s #ACCERATERegTech2021. And I’ll be at the ACAMS International Conference on financial crime, and then back at LendIt in April. Fintech South is another great conference you won’t want to miss in June!

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