The biggest cybercurrency story from SIBOS 2017, mostly because of the deliberate guerrilla marketing by Ripple, was Ripple vs SWIFT (which we covered here).
The second big cybercurrency story from SIBOS 2017 was a partnership between IBM and Stellar to go after that same cross border payments market. This was interesting in crypto land because Ripple and Stellar have a common gene pool (both were started by Jed McCaleb) and there is nothing more bitter than fights within a family. Until this week, the positioning was clear – Ripple was an enterprise play and Stellar was consumer oriented. This was the week when that changed. Stellar is going after Ripple’s enterprise space with this partnership; you don’t get more enterprise than IBM. As we will see in the next story, Ripple is also trying to position in Stellar’s consumer space with Mojaloop. Both Ripple and Stellar are moving tanks onto their respective lawns.
This fighting on two fronts by Ripple has left some crypto fans confused as this comment on Reddit shows:
“If Ripple tries to position themselves in the retail and personal markets to compete with Stellar that will be very bad for Ripple investors since they will clearly change the company fundamentals and not inspire trust, after all Jed left Ripple because they were getting too much “closed” and not targeting the retail and personal markets.”
Mojaloop for the Unbanked
Mojaloop, an initiative for the unbanked, was announced at the world’s biggest tech conference for banker. SIBOS gets about 8,000 bankers from around the world. Historically the subjects were rather “dry” – announcements about back office and SWIFT messaging protocol level changes predominated. Then Innotribe rejuvenated the content and we had more Fintech and it became a bit more like Money 2020. which is happening this week, one week after SIBOS; yes they are rivals and the organisers know that few attendees will travel to both if they are back to back.
Blockchain will benefit the Unbanked, but how will it get to market?
An immutable ledger that will enable the unbanked to record title to property could dramatically improve the lives of billions. In the West we take legal title to property for granted. No dictator can unilaterally change the deeds that show that I own my home. I will be describing this and other financial inclusion use cases for blockchain at this seminar in Switzerland on 11 November.
Crypto enthusiasts have had this vision for a while. I share it. The problem is how do we get from here to there? How does this actually benefit the lives of millions today? Today, millions are using M-Pesa in their daily life, while Blockchain is a passion for a few thousand technologists. Crypto enthusiasts will tell you that M-Pesa is a closed system controlled by a telecom company (Vodafone) and that is a real issue. That is why I was so excited to find MoneyOnMobile which is a telecom operator agnostic alternative to M-Pesa (disclosure: MoneyOnMobile is a client of Daily Fintech Advisers).
Mojaloop posits a world with micropayment transaction through a blockchain. unbanked need micropayments; the transactions they do are far too low for traditional bank payment rails. So the need is clear. However, Blockchain as a technology platform for micropayment is still a future dream.
There are three competing visions for blockchain based micropayments:
- As above but via Ethereal and Raiden.
- Some new currency that serves as an interim store of value. Both Ripple and Stellar seem to be positioning for this. However, an interim store of value coin needs to be non-volatile. That rules out Bitcoin today but also rules out Altcoins that are primarily driven by trading speculation (which is true for both Ripple and Stellar).
Mojaloop is backed by the Bill & Melinda Gates Foundation, which has done so much to improve the lives of the poor. We hope that entrepreneurs use the open source code to drive financial inclusion and solve the problems of cybercurrency volatility outlined above so that it can be used for micropayments.
What will be the conversation at Money2020?
I assume that cybercurrency, the unbanked and cross border payments will feature strongly. It is possible that the same initiatives launched at SIBOS get more promotion at Money2020. We will probably also see new initiatives launched in these areas. Going from SIBOS to Money2020 on the digit express is easy; I am looking forward to surfing that tweet stream and joining in conversations remotely.
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