Posted on

Blockchain for Inclusion? Gates Foundation Strikes Tepid Tone at Money2020

Bitcoin and other blockchain applications may help expand access to financial services for the world’s poor, but the technology is not the cure-all that some of the early rhetoric in the space made it out to be.

That’s the takeaway from a panel discussion Sunday at Money2020 in Las Vegas featuring representatives of the Bill & Melinda Gates Foundation and Omidyar Network, two of the most prominent philanthropic organizations focused on promoting financial inclusion.

While both executives said they see potential from distributed ledger technology to support their mission, their enthusiasm for the prospect was notably subdued.

Kosta Peric, the deputy director for financial services for the poor at the Gates Foundation, went so far as to downplay the blockchain-like aspects of his organization’s recently announced Mojaloop software. The open-source software is designed to make disparate financial networks interoperable, all in the service of helping the world’s underbanked.

While Mojaloop makes use of Ripple’s Interledger Protocol, “it’s not exactly a blockchain,” Peric said. “Some pieces of that are inspired by blockchain.”

Slow and redundant

Peric was particularly lukewarm on the usefulness of bitcoin and other public blockchains for financial inclusion.

Specifically, they are not adequate for domestic payment systems, he said. One reason is performance: no public blockchain can match the 1,000 or more transactions per second of real-time domestic payment systems, Peric said.

Also, public blockchains do not make sense for this use case because “payment data from one country ends up being spread across the planet.”

He tempered these comments by adding that public chains “can totally make sense” for international remittances. But moving money is not the only way blockchains can be useful for financial inclusion, said Arjuna Costa, a partner at Omidyar Network.

“Beyond payments, there’s a lot of potential we haven’t tapped yet,” he said, describing two use cases that would help poor people get access to capital, albeit indirectly.

One such use case Costa mentioned lies in land registries, which would help people secure title to properties that they could then borrow against. Another is using blockchains to analyze payment flows (including receipts and invoices) for small businesses, which would then help financial institutions to assess their creditworthiness and therefore lend to them.

The potential of distributed ledger technology is very high,” Costa said.

Bitcoin supporter

The most enthusiastic voice about blockchain during the session was the moderator, Christine Duhaime, founder of the Digital Finance Institute, a fintech think tank based in Vancouver, Canada.

“One of my favorite technologies of all time is bitcoin,” said Duhaime, who is also a lawyer with a specialized anti-money-laundering and counter-terrorist-financing law practice.

To illustrate why she likes the cryptocurrency, she pointed to the work of Code to Inspire, an organization that teaches Afghan women and girls how to code, how to find work online – and how to use bitcoin. It gives these women a measure of financial autonomy and privacy in a country where financial services are unavailable to them or unsafe to use.

Duhaime even went so far as to laud initial coin offerings, the process by which startups or open-source project raise funds by issuing a custom cryptocurrency.

While acknowledging that the controversial fundraising method has risks, she said it could go a long way toward expanding access to capital for underbanked entrepreneurs.

Duhaime concluded:

It allows access to capital for Joe Average on the street. It could be a farmer, it could be a billionaire – it doesn’t matter. You skip the markets, you skip the infrastructure, you get access to capital.”

Photo by Marc Hochstein for CoinDesk

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at news@coindesk.com.

Posted on

Ripple Could Turn out the Best Payment System – Gates Foundation Support

Ripple’s Interledger Protocol [ILP] has found use by the Mojaloop software which has been released by The Bill & Melinda Gates Foundation.

The development by the foundation has been done with the target to help level the economic playing field for the 2 billion people who are trapped in poverty, many of whom solely because they do not have access to a bank account or other basic financial services.

Mojaloop – is an open-source software which banks can adapt and find their own use of it very easily with low cost and effort. During its development, the project was funded by the Gates Foundation and created by fintech companies while including Ripple.

An Interoperability layer has been created with the use of Ripple’s ILP technology which connects mobile wallets, merchants and bank accounts in a single loop. Based on the information reported by Ripple, the particular system will enable market participants and users to initiate virtual transactions as “freely and fluidly” as cash.

Kosta Peric, Gates Foundation deputy director of financial services for the poor, explained in a statement that interoperability has been one of the primary obstacles preventing the poor from using digital wallets to access basic financial services:

“Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome. With Mojaloop, our technology partners have finally achieved a solution that can apply to any service, and we invite banks and the payments industry to explore and test this tool.”

On the other hand, Stefan Thomas – Ripple’s Chief Technology Officer, commented that Mojaloop has opened doors for millions of people into the virtual economy:

“Enabling the poor to make payments to anyone, anywhere, using a mobile wallet has implications beyond increased access to their domestic economies. It has the potential to bring millions into the fold of the global digital economy. We are honored to have been a part of this project.”

However, just to keep in mind unlike the startup Stellar – this project might not have any effect on the Ripple price itself as the market is declining as a whole right now.

Read Also:


– Follow us on our Facebook and Twitter pages.


Posted on

Gates Foundation to Use Ripple Interledger Tech in Mobile Payments Push

The Bill and Melinda Gates Foundation has released new open-source software for the unbanked that utilizes technology developed by distributed ledger startup Ripple.

Announced today, Mojaloop is aimed at providing an interoperability layer between financial institutions, payment providers and other firms that offer such services to the poor and unbanked. Ripple’s Interledger protocol, which is used to transact between different financial networks, is being used to help accomplish that goal.

In addition to Ripple, three other financial technology firms participated in the development of the software. The app came out of the group’s Level One Project, an umbrella initiative for its work with the unbanked poor that has seen it explore technologies like blockchain.

The Gates Foundation has been weighing applications of the tech since as early as 2015, including its use as a way to bridge disconnected financial systems.

“Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome. With Mojaloop, our technology partners have finally achieved a solution that can apply to any service, and we invite banks and the payments industry to explore and test this tool,” Kosta Peric, the foundation’s deputy director of financial Services for the poor, said in a statement.

In addition to the direct work on Mojaloop, the project also saw four other mobile phone technology providers – Ericsson, Huawei, Mahindra Comviva and Telepin – develop a open API to speed up the pace of integrations.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.

Image Credit: JStone / Shutterstock.com

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.