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Crypto/Blockchain Interviews

Geoffrey See (University Fellow 10), Head of Identity at Trusting Social and Founder of Choson Exchange

Geoffrey See is Head of Identity at Trusting Social, where he manages AI/facial recognition-based identity products which enable financial access for unbanked people in India, Vietnam, Indonesia, and the Philippines. At the same time, Mr. See is a Young Global Leader at the World Economic Forum (WEF) in Geneva, Switzerland. He was nominated for the five-year role by George Yeo, ex-Foreign Minister of Singapore, and Dominic Barton, Global Managing Partner Emeritus of McKinsey. In his role, he advocates a path forward on the North Korea issue and shares his insight on AI/data. As of last month, he also serves as a WEF Council Member of the Global Future Council on the Korean Peninsula.

Mr. See is also Founder, Chairman, and former CEO of the Choson Exchange, where he has worked on developing North Korea’s entrepreneurial ecosystem for nearly eleven years. The Choson Exchange, which reaches over ten thousand Koreans, has been profiled over 400 times in publications including The Economist, Financial Times, The Washington Post, Forbes, The Straits Times, and BBC. In July 2018, Seoul Mayor Park Won-soon visited Singapore and held a meeting with Geoffrey See and Choson Exchange to express appreciation for their work introducing economic policy, business and entrepreneurship knowledge to DPR Koreans.

Previously, Mr. See served as Primary Advisor to the President of the Gaesong Industrial District Foundation, Council Member of the Singapore Sichuan Trade committee, Founding Member of Southeast Asian’s first member-driven exchange for the issuance and trading of private company shares, Head of Strategy and Business Development at Anquan Lab, and Co-founder of Saigan’s largest co-working space. He received his MA in East Asia Studies from Yale University.

The Politic: Tell me about your background and how you got involved in blockchain!

Geoffrey See: My personal interest is more from the area of financial inclusion and emerging markets. I’ve always been very interested in contributing to the development process and accessibility of financial services. So, I got interested in the blockchain space by looking at it from two different angles. The first angle was looking at blockchain and payments in emerging markets. Most of the people in emerging markets are unbanked; they lack access to the banking system, the cost of remittance is high, and it’s very expensive to access the banking system. I got interested in blockchain by looking at it from that angle and trying to see whether a form of decentralized, digital currency could add value to the space. The second angle related to including small-to-medium enterprises in the market, and how we could use blockchain to record equity ownership without having to go through a costly IPO.

I’ve been following Bitcoin since 2012. I was very lucky in my introduction to the technology. I was working on a non-profit organization, Choson Exchange, which was educating entrepreneurs in North Korea. We came in at a time when the government had cracked down on North Korean markets, and there was a huge currency revaluation. They forced people to convert their old currency to the new currency. Entrepreneurs had their wealth expropriated. There was a backlash, and the government ultimately became a bit more supportive of the business community. That’s the point at which we could start educating entrepreneurs in North Korea.

When I was in the U.S. back in 2012, I met someone at Google, and I asked how to support such entrepreneurs in North Korea. I gave him the example of the currency crisis in the country, and he suggested seeing whether Bitcoin was relevant. We didn’t do anything with Bitcoin in North Korea, but I became interested in the tech, and I moved back to Singapore to help a protocol that was just launching. I also helped establish a regulated securities exchange with the blockchain protocol. I still follow the payment space and what can be done there in Vietnam, India, and other emerging markets.

Did blockchain more generally factor into your entrepreneurial work at Choson?

We didn’t do anything with blockchain in North Korea. It was more non-profit work– running educational programs. We bring people in there to teach entrepreneurship and economic policy. The North Koreans are taught entrepreneurship and receive exposure to other kinds of environments, societies, and ideas.

What’s the scoop on that blockchain protocol you helped?

I joined this protocol called Zilliqa. I was helping them on the business side, putting together the strategy and partnerships they needed in order to deploy their protocols. One of the things I helped them do was launching an exchange on the blockchain protocol– one of the first three regulated exchanges in Singapore. The idea was to make ownership and access to private companies a lot easier for people. Then, all the companies trying to raise funds would gain access to a new form of financing. 

Once the exchange made it through the regulatory process, I decided to leave Zilliqa and join this firm which focuses on financial inclusion. The firm uses artificial intelligence for credit scoring. We go through the data, and we apply our algorithms to give a credit score to individuals without credit history. That’s important because most people in emerging markets lack a credit history.

Interesting! What’s your work like at Trusting Social?

I run the identity division, which helps people find out who’s transacting, who’s borrowing money, and so on. I was drawn to this position because we’re trying to make accessing the financial system cheaper. We’re removing barriers by ensuring that people can do banking transactions without going to traditional banks.

In my last blockchain-related role, I realized something very important: one of the biggest pain points for blockchain is that most governments crack down on cryptocurrencies and other digital currencies because they lack sufficient controls on the people transacting. They’re not able to fulfill KYC or AML requirements. Since 9/11, governments have engineered a system which makes the financing of nefarious acts–terrorism, money laundering, and so on–nearly impossible. They do that through controlling the banking system.

When you have technology that enables decentralized transactions, where people can exchange goods of value without the government being able to track who the transactors are or what they’re buying and selling… There’s no way that governments will let that happen. The central bank in Singapore was very supportive of cryptocurrency on paper, but the banks were getting very different instructions. Look– if you’re going to expose yourself to potentially huge fines from money laundering by accepting funds from people in the blockchain space, that raises a red flag.

That realization made me decide that the issue of identity was huge in enabling this new form of transacting through digital currencies. Governments need a way to balance the removal of friction in payments with the need to monitor who’s transacting. They still want and need to do the KYC and  AML processes. So, I took on this new role working on digital identity in order to enable people to conduct these financial transactions.

When you talk to the banks, what’s their viewpoint? Are they wary of blockchain technology? Is it threatening, or will it complement their work?

Yeah, it’s quite interesting. When we were working at several banks in Singapore, there was a general awareness that if blockchain and digital currency were to really take off, the reason for storing money in banks would vanish. Instead, anyone could set up banking in a box. You could come in there and build a new bank from scratch, and that would be relatively easy in terms of the core technologies–the banking backend and banking core system–necessary for storing and transferring assets.

But, I think the role of banks will just change. There’s always a need to allocate capital. People are talking about how blockchain and digital currencies will give them currency to lend. That’s an intermediary role that the bank plays. The bank of the future will look very different from the bank of today. Banks are a lot more aware of the need to adapt and prevent disruption of their role in the economy. They are much more aware of technology trends, including blockchain. I’m not sure if they’ll adopt this technology, but maybe they’ll experiment with it and see where it takes them.

Aside from blockchain, I also think there’s a much broader trend of disruption of the banking industry in this region. There are a lot of different entities starting to assume different functions of banks. You have all these ride-sharing firms that achieve similar functions. Because the area of payments and banking is so underdeveloped in this part of the world, a lot of Uber clones actually take on banking functions. For example, in southeast Asia, Grab and Gojek, which are ride-sharing apps, store cash for people, becoming a sort of smaller-scale financial system. In that way, I think blockchain is one of multiple threats to the banks. In a sense, I think the banks experiment with and are generally aware that blockchain is one of these threats. I think the tech is likely to change the way that banks function.

How exactly will blockchain change the bank of the future? Which banking-related use cases are most promising for blockchain?

Today, the banks serve as a custodian of our assets, but I think blockchain could serve that function. In order to do digital transactions today, in most cases, you still have to go to the bank in order to send money from one person to another. There are a lot of FinTech disruptors that now enable payments. We don’t necessarily need the banks, but they’re still very core to the functioning of the economy. A lot of other financial systems are built on top of the banks. 

With blockchain, you could potentially have custody in the hands of the individual. Then, maybe banks would focus on their role as intermediaries between borrowers and lenders. But, the way they interact, who funnels currency in the digital format, would be different. That could remove friction involved in moving cash between different accounts.

Those are some of the possibilities there. I think providing banking services makes it easier for people to enter the space, because at present, setting up a core-banking system with all the technologies and controls is a very expensive undertaking. So, to enter the banking space, aside from the licenses, there’s also building up the core systems. On the other hand, if people store money in a digital and portable format, you could democratize the ability of people to provide banking services without having to build an expensive core-banking system.

In the earlier days when you built an internet company, for instance, you had to build all of the infrastructure. You had to go buy the service and you had to set up the server infrastructure– those were very expensive things. But, because of today’s cloud services, you don’t have to think about building costly service and server infrastructure. It’s also scalable (i.e., you can buy from Amazon), so you don’t need as much capital to do it. In the way I can build applications pretty easily, I think blockchain could do that for the system of money, significantly decreasing the cost and increasing the ease of building that layer of services on top of digital cash.

That’s a really interesting example of blockchain’s disruptive potential. Which historical innovations would you compare it to? I know some people say SSL, TSL, the internet, the rise of corporations, etc.

I think those are all good analogies which provide different ways of understanding the technology. I know a lot of people talk about the internet and the underlying protocol which enabled it. They talk about how this case is analogous because the blockchain protocol will enable the flow of money.

I think a lot of people in this space don’t pay enough attention to the policy and regulatory side of things. I work with a lot of policymakers and regulators in this space, and I think most people are too dismissive of that area. Most of my colleagues come from a technology background, and they’re unaware of how regulators think of these issues. I think the reality is that regulators are so invested in the system for controlling the flow of funds since 9/11, and I don’t think adoption will be as frictionless as people think it will be. There’s so much invested by the government to ensure that there’s tractability and oversight.

What are the main obstacles? Could you paint a more detailed picture of how regulators think of blockchain?

The regulators have built this system, and they don’t want to lose control. They don’t want to lose their power and influence. You see what’s happening with Libra. They’re being grilled by Congress and the President. Part of that is the simple question: why would the government want to lose control over the money supply? Why would they want to lose oversight over the transfer of funds? I think that’s where the reluctance might be.

I think what will most likely happen is the technology adapting to fit within aspects of regulation. For example, can you store biometric information in wallet addresses? The governments have a more transparent source of funds transferred because you know who is moving funds to whom, and you have an entire chain of history of who’s moving money around. I think there are technological fixes, and I think for the next iteration of blockchain to achieve adoption, developers will need to start building some of those regulatory controls into their technology.

Any final thoughts?

I’ve met quite a lot of central bankers, and I think there’s actually quite a lot of experimenting in developing countries and frontier markets with this technology. It’s not just the people within a given society that are excluded from the financial system; there are entire countries that don’t have the same access to the international finance system– and they’re very interested in blockchain. I met one of the governors of the National Bank of Cambodia, and they’re running experiments with blockchain and central banks. It’s interesting because they want to have a more equal platform in terms of funds transferring around the region, instead of having key banks in Singapore, let’s say, intermediate those transactions. For me, one of the key takeaways is that in order to take this technology to the next level, we need to understand regulation and how to work with regulators much better, instead of trying to understand the rules of the game differently or pretending that they don’t exist.