In SEA’s Developing economies such as Thailand, Phillipines, Malaysia & Indonesia banking services have been limited for a long time. Historically it has been very difficult for financial institutions to efficiently and ‘profitably’ serve customers. The result is that millions of people live and operate on a cash only basis with no bank account. Until this day there are large segments of society that still fall out of reach of the legacy banking system but the ubiquity of mobile phones is rapidly changing this. Mobile phones are everywhere you look, everyone knows this. From the CEO to the street vendor we all have a mobile, even Grandma has one.

‘The Democratisation of Money’

There are 65million people in Thailand, of those 65million people less than 60% have a bank account and more than 80% have a mobile phone, this makes for an interesting statistical chasm and the second figure is growing at a much faster rate than the first. Imagine instead of a bank account an underbanked individual who exists in that chasm between those who have a bank account and those who don’t could simply install a digital wallet app on their mobile phone and was then poised to receive, send, spend and control their own money without the need to go to a major bank and set up an account where they will be charged fee’s. Not only are those fees growing year on year, but they already exceed the price of the product these individuals are selling and this is the root of the problem. For example, a street food vendor sells a fresh coconut juice for 30 Baht (roughly 90 US cents) their profit margin is lets say 20 Baht, but it costs 150baht to withdraw their money from the ATM once they’ve deposited it at the bank, and as there are more of those than Bank Branches in the more rural areas of Thailand where the large majority of the population lives, this is likely to be how they must access their funds.

So if we can move away from a cash based society in areas of developing countries that are underbanked using smart phones why haven’t the banks already achieved this? Well its due to profitability and cost. If its not profitable its not that they’re unwilling to do it its that actually they’re ‘unable’ to do it; why? This is because banks are centralised organisations and have high running costs and the overheads associated with operating even if they were just doing out of the goodness of their hearts still makes it impossible for them to remove the imbalance within the fee vs median income ratio meaning having a bank account can never make sense for someone who earns less per transaction than the fee’s the banks must charge for you to withdraw, send, store and receive your money.

So what if there was a technological advancement so powerful that it could transform the very basic pillars of our society and the way those pillars interact with money; farmers, market vendors, couriers, artisans, craftspeople, fisherman, construction workers, the people who people who fundamentally underpin the way our economy functions and who without would cause things to grind to an unnerving near halt. What if there was a technology that could change the way we conceptualise trade, ownership and trust. This technology already exists and its called ‘The Blockchain’ a decentralised open ledger that records transactions on a ground breaking peer to peer network on the web populated by ‘miners’ who get rewarded with tiny amounts of currency for verifying each transaction (0.0001BTC which equates to just 3 US cents).

When miners utilise large amounts of computational power this endeavour becomes profitable for them by verifying large transaction blocks. So not only are the costs of running this network nearly invisible to the user on a per transaction basis with no huge overheads pushing costs higher each year it is also incredibly economically friendly when compared to printing money or mining gold (6.7million and 54 million tonnes of Carbon dioxide are produced doing so versus 500,000 tonnes produced from Bitcoin mining globally). Plus unlike money printing and gold mining the eco impact of bitcoin mining is decreasing…meaning mother earth approves!

Bitcoin and the Blockchain is a single source of truth that everyone has access to and can always be trusted as it is based on mathematical algorithms run by the ‘miner nodes’ that must all unanimously agree that a transaction has occurred, has been verified and is not malicious. Further more, the block chain is completely programmable and it is this function that will allow us to completely rebuild the financial sector and administrative processes stimulating innovation, something that has not happened for the past 2 decades. We can make these processes infinately more efficient, transparent and significantly reduce cost and decrease bureaucracy.

Where do these changes lead? As I’m sure you understand, this Is just the beginning as we move towards a world that involves ‘the internet of things’ It leads to a smarter, cashless society and will provide bank like services to those who would benefit from them the most. Blockchain technology is disruptive in that it breaks the Status Quo. It will open markets and breaks the position of middle men creating a paradigm shift that will stimulate trade and innovation in a way we haven’t seen in a long time and i truly believe that as the concept of digital money and cashless transactions becomes mainstream it will stimulate the largest economy that we have ever known… money. The same way the internet stimulated global commerce. I believe that now is the time to explore this technology together as a society constructively and critically, openly discussing its potential applications.