How Asia's Trading Culture Results in a Vastly Different Crypto Scene - Ep.126

Transcript

hey everyone as you might have heard we're doing a survey I want to know how do you think the team here at Unchained can serve you better help us help by answering our questions at surveymonkey.com slash are slash Unchained survey 2019 this is the last week I'll be promoting the survey I'll keep it open until Thursday July 11th so if you haven't yet go now to surveymonkey.com slash are slash unchanged survey 2019 to give us your thoughts on the podcast and what else we can do for you and don't forget you could be one of the five lucky people to win a free cause a Bitcoin Lightning node plus a free year of causes gold membership including a multi six security app for iPhone and Android a treasure Hardware wallet a Casa Faraday

bag and 24/7 support those of you interested in learning more about Casa or about protecting your Bitcoin investment generally should check out my interview with CEO Jeremy Welch thank you to casa for donating again the URL is surveymonkey.com slash are slash unchanged survey 2019 go there now to give us your thoughts on the future direction of Unchained and entered the giveaway before the deadline of Thursday July 11th thanks again hi everyone welcome to Unchained your no-hype resource for all things crypto I'm your host flourishing cipher tres cutting-edge cryptocurrency intelligence powers anti-money laundering blockchain

analytics and threat Intel reading exchanges virtual currency businesses banks and regulators themselves use cypher trees to comply with regulation and to monitor compliance Kraken is the best exchange in the world for buying and selling digital assets it has the tightest security deep liquidity and a great fee structure with no minimum or hidden fees whether you're looking for a simple Fiat on ramp or leveraged options trading Kraken is the place for you my guests today are Lewis phono Ventura founder of bloom solutions and Leo is president of the Bitcoin Association of Hong Kong welcome Luisa and Leo hey Lori thanks

for having us let's start with Louise tell us what you do in crypto so I'm the founder of a company out of Manila Philippines the our mission has always been to try to figure out a way to kind of fit the I guess you could call it the you know the complexities of Bitcoin into something that that works with our emerging markets at the start we were kind of focusing very heavily on how to use Bitcoin as a remittance settlement mechanism you know the Philippines has some pretty massive migrant worker population across like 50 countries around world so it made sense to us our second product is called bloom teller

and what it does is it basically sets up their average for an exchange agent or moneychanger at hotels and airports to be able to start buying and selling cryptocurrency over-the-counter kind of you know kind of merging the traditional business of foreign exchange into this new world of cryptocurrencies and we've been around for three and a half years now seeing our fair share of you know kind of crypto weirdness and things are going pretty well for us on the side of the world and Leah what about you what do you do in crypto I may be known in Hong Kong for organizing the

meetups which over the years has become a lot more elaborate than we are hosting more speakers and panel discussions and lectures we're hosting hack that lightning hack day in March or the job fair a few weeks ago we're hosting an annual conference for crypto currency exchanges and so most of it has to do with community organization and yeah keeping keeping the industry together but of course is also that means we talk to talk to the government talk to regulators talk to police on behalf of the industry and I personally would also write a lot or teach and give lectures myself

yeah and that's actually how you and I first connected because you are a contributor at Forbes and I when I was working there tasked you with some his stories to to fill out our crypto coverage in Asia so yes and actually just because listeners may be curious you are actually not originally from Hong Kong so can you just explain where you're from and how you came to live there I was born in Italy I studied in Austria I moved to Hong Kong and for my master studies that was in 2011 and around the same time I heard about

Bitcoin for the first time and in Vienna difficult for me to find people who heard about the coin mini Anna's I met people in Hong Kong and we talked about politics and tech I slowly got to meet a few more people who heard about Bitcoin and please who at least had similar questions than I did and yes it was finished with my stuff and I saw that somebody had just created the Hong Kong Bitcoin Meetup and I offered to host or event and since then that's been pretty much organizing these meetups Louise can you also tell us how you got into Bitcoin and cryptocurrency so I've

been a tech entrepreneur for like you know most of my adult life and in a previous startup kind of one of the biggest challenges I was trying to work out was how to make ecommerce work in a country where credit cards are just not really a thing I think even now you know kind of a nearly a decade after like you know the credit card penetration in the Philippines is still only about five percent so I was looking for kind of a way to do online payments and that's kind of how I discovered Bitcoin in 2014 and you know I mean it never really I guess you could argue that you know Bitcoin still really hasn't fulfilled the promise of being an online payments rail but that was kind of how I first

discovered it and that was kind of the the impetus for me to learn what this was you know it was it was a little bit later after that when we realized that you could use it as a remittance settlement mechanism instead which is kind of still primarily how we use it to this day so the three of us met in person I even though I had connected with Leo online before we finally met in person at the Oslo Freedom Forum what was that I guess about a month or so ago and the two of them are just so knowledgeable about the crypto scene in Asia and I had previously done an episode about Asia that was very popular

and so I figured I would have the two of you come on the show to discuss that topic so let's just start with the most general question how would you characterize the differences like in broad strokes between the crypto scene in Asia versus the West so I guess it my my characterization of it kind of stems from the fact that I always been an outsider to things like Silicon Valley culture right so I kind of see it very much from from from afar and kind of the though I think the way that the West approaches cryptocurrency tends to revolve around issues like you

know it it's better for personal privacy personal liberty things like that whereas kind of on the asian side it's very much about whether or not it can save us money I've found that the primary question that I have to answer like when I'm doing either lectures or training or whatever is is this any better than what we already have and we do a lot of things manually still here in this country and you know kind of in most parts of Southeast Asia but for the most part with kind of minimum wage being what it is it's not terribly inefficient because it provides lots of

people jobs you know kind of all to be all of the kind of internals of banking here that is still done manually is not terrible in in the sense that you know it's it's getting the job done at a particularly competitive cost so is Bitcoin better than that is always kind of the question I get and it comes down to raw numbers if you can bring the Marg and the profit margin that costs down then we've got a potential deal on the table and if not you know kind of be the promise of Liberty and potential you know the digital convenience or whatever is just not quite enough to convince

people to get on board at least that's what I've found Malea what about you in East Asia especially Hong Kong China Taiwan Korea Japan stock trading is already a lot more popular than it is in the United States of Europe it's almost done recreationally people traded while they work other jobs people trade stocks while they drive taxis or why they while they commute and cryptocurrencies so film much of the same purpose except that there are a lot more accessible to people it's a lot easier to have a variety of wide variety of products that you can trade on top of that people especially in

China don't always have a lot of investment opportunities they might consider their local stock market to restricted or even to even fraudulent while the local real estate market might be completely it might be in a bubble face and completely overvalued and there is not a lot of foreign products that are accessible and so cryptocurrencies open up a new whole new range of investment products and that people can invest in and it might not always be a very good idea and a lot of these investing products of course not be more sham but they do create enough buzz and

they do create these wild dreams of instant riches that draw quite a yeah quite a large number of people to them yeah I think that differences in your two answers probably stem from the fact that I think Lewis was really talking about more of a b2b pitch where he was saying you know they're interested in how much can this save them like Louis you mean like a business that that might want to work with your company is yeah and then Leo's like talking about retail so certainly yes on that on the business level it's kind of a it's the very first question that they will ask the second question is is it legal which is another conversation entirely but I think that

even for you know your even for your average customer if you if you were to tell them that there is a way for them to kind of support their family back home from from a country as near as hong kong right so hong kong in the philippines are not even 90 minutes away by by plane but but you know like every year you got about a third of a billion dollars in kind of personal remittances streaming between the two countries and you know the question that an individual would ask of like an individual migrant worker who is working in Hong Kong the the question they would ask is is this is Bitcoin cheaper for me than you know

any number of traditional remittance channels in Hong Kong and you know just a little bit of context there like if you trust World Bank Statistics Hong Kong and Philippines that is the most fiercely competitive remittance corridor in the world and I'm not talking about on a crypto level I'm talking like just traditionally so using traditional channels you can probably send money from Hong Kong to the Philippines for under 1% in total fees which is that's probably as cheap as its ever gonna get from a kind of a personal remit a standpoint right because you can barely run a business on on 1% what's

interesting though is that you know the reason for that is that quite a bit of those savings are happening because of massive like business subsidies right it's a customer acquisition cost so a lot of remittance businesses will enter Hong Kong and try to kind of compete by basically offering remittances that are so cheap that you could not say no to it and that's you know that's just a that's just market competition I guess so some of this is starting to get into actually where I want to go next which is I think also Geographic differences within Asia because also Leo did qualify his statement by saying that that was a

trend he was seeing really in East Asia so let's kind of break this down geographically you know we we talked about the difference between crypto and Asia versus the West but now let's sort of talk about the main types of activity you see in the crypto seen in places within Asia or or like what what you think are the main issues or kind of themes that you see in crypto in each of these geographies and let's just start with the biggest one which is China what do you guys say about the crypto scene there the Chinese government would very much want crypto to just go away I think it's still small enough for them not to get like overly upset but whenever the

crypto currency scene makes too much noise or whenever it gets too much attention the government likes to put it back in its place and that means that the cryptocurrency scene is increasingly hidden it's increasingly it's increasingly closed down among a couple of participants that trust each other and that only wants to trade for example with people that they know and it's becoming more and more inaccessible for for new people who want to buy or new people who want to enter a new people who want to participate in this in this community that have being said bitcoin is still very liquid and China

it's still for those who are part of this community very easy to sell millions of dollars of cryptocurrency and find a finer market for that how do you know if they would have their network of contacts and in in within those contacts and within a couple of like online OTC platform similar to local bitcoins people would people would buy and buy this Bitcoin of the price the price is right there are some people who are making money doing arbitrage there are some people who are yeah

onboarding their family or their friends through their personal bank accounts onto the cryptocurrency system because they're the family or friends might also want to trade or they might also want to invest or they might also want to move money the interesting to clarify wait just to clarify what you meant there you meant like you like if you're a relative of mine and I have the coin and you don't then you give me Chinese yuan in my bank account and then I give you Bitcoin yeah or of you I would give you a red and B into your bank account and you know somebody who you can source from oh I see okay and you were gonna say about exchanges

it's very much a chain of trust in a way where I would go to somebody who goes to somebody who goes to somebody and and for each of these hops there is a trust relationship and that's how eventually I end up with Bitcoin and somebody else ends up with rumen be the Chinese exchanges and more or less all had to leave China with their products that includes finance and okx and hobby but they are all still active with those products violence probably most famously they this is also it's all a bit sensitive and how these

products are marketed but these products are still very popular among people in China of course they need a VPN to jump the firewall they need to buy Bitcoin somewhere else but they're still they're still trading these products and they're still being marketed at and on hobby OTC people can easily find each other they have some kind of rating system that makes it a little bit easier to source Bitcoin outside of people's personal trust circle or outside of people's proprietary WeChat groups okay Wow interesting and what about Hong Kong so for we're

gonna keep going yeah with a different geographies Hong Kong still has a very liquid OTC market it's very easy and it's possible to do so and you open to by tens of millions of US dollars worth of Bitcoin from a couple of yeah very professional offices the traditional Fiat exchange market has never really taken off in Hong Kong it just proved too difficult for these exchanges to on board to maintain banking relationships and essentially except CS deposits into their bank account meaning Hong Kongers

who wants to deposit money onto an exchange often do that in New York or that in Europe where the European and US exchanges are able to relatively easily accept Steve's international wire transfers and for Hongkongers to then trade there are a lot of Bitcoin ATMs in the city that serves mainly those who value privacy and those who need bitcoins very quickly or very conveniently and there are mmm almost no legal issues around trading Bitcoin in Hong Kong it's very easy for anybody to start trading Bitcoin no matter if it's on the peer-to-peer market or if it's

through a dedicated OTC desk and theoretically it would also be possible to start a to start a traditional exchange without any licensing requirements but whenever bank accounts are yeah are too important for the business model the business model often fails interesting that's yeah the more that I learned about this case the more I realize just how important these banking relationships are all right and let's talk about Japan what is the crypto scene like there and how does it differ from other parts of Asia Japan is very much the the lighthouse of Asia and it causes a lot

of a lot of discomfort for its neighbors and for like for Asian countries I have the feeling that if Japan would not take such a positive stance on Bitcoin a lot of places especially in Southeast Asia would have already bad this is the question we get so often from from big sceptics but why is Japan embracing this so much Japan has a very restrict licensing regime and Japan is very strict with its exchanges but it's the only country that gives cryptocurrencies in Bitcoin so much legitimacy in that day almost treat

us as a yeah an important part of a future banking sector the Japanese authorities unlike for example their Korean counterparts would also be quite coherent in their message there's the yeah the financial authority of Japan that has a yeah quite a clear message that rarely contradicts itself the all exchanges are always under scrutiny but are within a couple of limits allowed to offer yeah a lot of products a lot of different cryptocurrencies trade all sorts of tokens and offer these products to the general public and you started to

say something about Korea there so what is the scene like in Korea Korea's in some ways similar but it has the financial authorities split up into at least five different actors who might create conflicting messages and as the way Korea gets yeah portrait for example international media is then often a little bit conflicting as in Korea might been exchanges of Korea might ban I SEOs while others insists that exchanges are doing very well in Korea and that I feels are still legal and what are the

behaviors there there was so much talk about the kimchi premium I don't know if that still exists but yeah how its activity there Japan and Korea have a couple of implicit capital controls and that make it difficult for people to move money out of the country or make it difficult for foreigners to move money into the country and I think both both countries are well aware of this they're well aware of the weaknesses of their banking system and they don't necessarily know how to immediately fix this I can also imagine that things like Bitcoin are a possible way out not that people in those countries would immediately think that Bitcoin can

replace the local banking system or can replace connect the local banking system better internationally but they're at least aware that and the possibility exists and that bitcoin presents a yeah in the future a another option and one that might serve people better but now and people have difficulty sending money in and out of the country which a cup in peace in Japan people have supposedly solved at least for the cryptocurrency premiums but in Korea these premiums still appear from time to time when people in Korea wants to buy Bitcoin at a faster rate than everybody else in the world the

Bitcoin price goes up in relation to for example the US dollar price and the way people move money then out of the country to arbitrage that and yeah makes a lot of people uncomfortable too we see people coming to Hong Kong in budget airlines with pockets full of cash whatever whatever the legal limit is lining up at the OTC desks in Hong Kong in the morning buying Bitcoin and immediately sending them to to Korea to sell them there only to fly back in the afternoon and be on the next slide the day after that's making the police

in Hong Kong uncomfortable making the police in Korea uncomfortable making the budget airlines uncomfortable they don't really want so much cash on board either but it seems to be the most reliable way for people to arbitrage these markets and I think that shows quite colorfully where these weaknesses in the banking system lie as it should be more convenient and easier and safer to simply send the money to Hong Kong but that doesn't seem to be possible all the time well is that still happening yeah I watched the Korean crisis in relation to the rest of the world like almost on a

minute-to-minute basis during the work day and the the Korean premium hasn't really exceeded three percent in a in a while now in fact for a you know a big chunk of this year Korea was actually kind of underpricing its bit coined by a couple of percentage points not not not nearly enough to trigger kind of you know the the sneakernet kind of behavior that that leo is describing but certainly there's still money to be made there yeah so and it's largely because of the capital controls the it creates kind of this alternate reality where Bitcoin is either minus 3%

or plus 3% who are more expensive depending on kind of you know whatever the local sentiment is and I I don't see that really changing until we get to the point where kind of those capital controls are lifted to allow some of that volume to leave the country that's that's a very kind of high-level political question though that's not necessarily anything that pressure from crypto exchanges are ever going to be able to change I don't think and but wait so Leo what you described about the people flying with their pockets filled with cash is that still happening or was not just during 2017 that happens that

happens at the at the peak and yes it's still occasionally happening but not it's not a daily occurrence yes that when the when the price the premium goes beyond say three or four percent and then people very quickly do that again it's an easy way to make some extra money and get a trip to Hong Kong all right all right let's talk about Singapore what's the seem like there Singapore is currently again very open to crypto currencies to blockchain products and specific I think there is a possible chance that something like the regulated token exchanges will happen in

Singapore but Singapore is also not always very predictable in that it swings for sand back it embraces the community in one year and then swings back and everybody gets and everybody it's yeah politely asked out again a year after I I will I will also kind of just just add a little bit of color to that I think that Singapore and and maybe this is a distinction that's important to make in all countries and kind of what the government's position is on crypto does not necessarily match what the bank's position on crypto are and I've found in Singapore the Monetary Authority of Singapore so that's kind of the government side and they are you know

kind of deeply committed to becoming the financial hub of this region so they've been experimenting with things like like an interbank fund transfer system built on on ethereal for example stuff like that or sorry yes it was sorry it was a it was a private implementation of the ethereum blockchain that they were experimenting with the I think that the limitation there is that maybe the banks don't necessarily want to you know kind of Bank these crypto companies that would kind of come about because of the monetary authorities encouragement and so if you were a cryptocurrency company

in Singapore in 2016-2017 it was unlikely that he would be able to get it back from the big three in fact you would probably end up getting if you wanted to get banking and say before you'd end up getting one from a Malaysian bank instead because it was just easier and they were they were not gonna turn you away that's at the site of the word cryptocurrency in your business documents so I think that there's always kind of this funny disconnect between what the government wants to encourage and what the banks are comfortable doing and I think that that disconnect is primarily because you know if if any of this stuff ever gets used for money laundering or terrorist

financing the the penalties that the banks have to pay are so high that it it kind of disincentivizes them to even give it a shot if you know what I mean like just the math doesn't work out if I'm gonna get like a hundred million dollar fine slapped on me just to bank a ten million dollar cryptic company it doesn't really you know it doesn't work out so that's kind of them that's the calculus that the banks are doing in their in their heads and an unfortunately no amount of you know government encouragement is really going to necessarily change your minds on that I don't think sorry we're

gonna keep discussing the geographic differences within Asia in a moment but first a quick word from first me but then also from our fabulous sponsors hey everyone as you might have heard we're doing a survey thank you to everyone who's already answered our questions especially to the several respondents who suggested that I interview Satoshi Nakamoto for the show I'll be sure to get on that right away if you're one of the few listeners who hasn't taken it yet what's the hold up go now to surveymonkey.com slash are slash unchained survey twenty nineteen to give us your thoughts again that URL is surveymonkey.com slash are slash unchained survey 2019 I'll keep the survey open until Thursday July eleventh

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to cracking calm that's K ra ke n calm will the world follow France and advocate banning privacy coins will government backed stable coins become the new Fiat are distributed and peer to peer exchanges just a flash in the pan the answer is maybe virtual currencies can flourish and create a new private and more versatile economy but that grand vision can't happen without keeping crypto clean and that requires support of governments and accountability for bad actors privacy enhanced compliance using cryptographic controls has the potential to preserve anonymity without compromising legitimate investigations cipher trace

is working on this vision of the future sign up to stay up to date on the privacy enhanced compliance initiative and receive authoritative crypto AML reports quarterly WWC fruit-trees comm slash keep crypto clean back to my conversation with luis buena Ventura and Leo YZ so let's now talk about the Philippines what's the scene like there obviously beyond remittances since we've covered that so the Philippines is one of the few countries that actually has licensing for crypto currency exchanges so here we call it the virtual currency exchange license and that came out kind

of very auspiciously in 2017 as the bull market you know kind of the last big bull market was happening to date we have nine Isis companies here quite a few of them are you know kind of from other countries so quite a few of those licensees are Chinese owned or korean-owned mostly because they can't get licenses in their own countries so you know the Latino license in the Philippines and you know kind of be able to show their institutional customers they're kind of their investors that they are licensed somewhere which is you know which may or may not be important

depending on what kind of institutional partner you are but it's certainly been a strategy and I think that you know Japan's leadership in this space was kind of limited to just like a dozen businesses right I don't know that they've actually licensed any new businesses since 2018 so if you wanted to get licensing for your your crypto exchange business there's just a handful of countries around the world where those licenses are being issued and also kind of you know are respected in a way and and because of that I believe the

the queue for license applications here is about 6070 companies long they're all kind of waiting for you know a license to be issued to them and you know based on the track record you know like less than 10 companies in two years you know if you're number 70 on that list I think it should be prepared to wait for a while and what about like when Leo was saying that there's a lot of trading in East Asia the way you know people like to trade stocks is that a thing also in Southeast Asia and we can even branch out now to Indonesia and Malaysia or Thailand or you know any of these other

countries Vietnam I mean Indonesia is kind of I would say the most advanced of the of the countries in Southeast Asia and you know I just looked it up today again they do about 300 million dollars in crypto exchange trading per month I think that and that's like mostly focused around a single exchange called endo Dax and they've been around for I guess about as long as I've been in the space so at least five six years now and I think they're the one like major exchange that the region can really

speak to there's certainly been many attempts Thailand has five crypto exchanges that have been issued temporary licenses by their version of the monetary authority and but no one has the volume of endotoxin I'm aware of and is that just because of Indonesia's size it's like the world's fourth largest country so is is that just part of it it's just like much bigger I mean that's that's a that's possibly part of it I think it might also just be that you know they've been around the longest and kind of they started to become the platform on top of which other cryptocurrency businesses were being

built you know as far back as 2016 so so if you wanted to do kind of a a crypto based remittance business into Indonesia you would have to have endowed acts as one of your kind of liquidity partners or your payment or disbursement partners or things like that so you know I've I've been kind of friends with the founder for a while now and you know he talks about how you know is really rough for them at the start because there was a lot of infighting within their own community I've seen that in you know the Philippines as well I've seen that in Vietnam to a certain extent like like there's a lot of infighting amongst

crypto people who'd have thought that that was a thing right all right let's talk about India I feel like what's going on there is kind of interesting especially because it's a little bit in the opposite direction but or you know I don't know how much you guys know about that but you know if you feel you can discuss that but what's the seem like there yeah not an expert but it seems to be a very difficult market of course it's massive but the local authorities seem to put a lot of restrictions on on on money anyway and there seem to be a lot of yeah difficulties and in moving money in and out of the country for example with more

explicit capital controls and of course they coin doesn't fit very well into those existing restrictions and yeah the authorities then put restrictions on Bitcoin businesses that they aren't allowed that they aren't able to comply with including making sure that people don't use Bitcoin for illicit activity which includes circumventing capital controls and there's no way to guarantee that or there's no way for the exchanges to to monitor this and yeah as I understand it the exchanges are more or less lining up I don't know if it's

completely banned as reported but seems to be very very hard for exchanges and Bitcoin trading is then more going into the underground similar to China yeah well so this is actually a good segue because you know obviously the news about Facebook's Libre has come out recently and you know just even from like the marketing materials you can tell that they really are targeting those types of economies like you know emerging economies and you know yet I don't think people in India or China maybe in China was not exactly in the marketing materials but but you know I

don't I don't think those developing economies are those two in particular are going to be ones that will be able to access this but I was wondering what the general reaction in Asia has been to libre it gets talked about a lot it does seem to be a big deal and I think it's mainly at the because it legitimizes the idea of cryptocurrency so much and because people expect a company like Facebook to have a clear plan and to have a clear strategy on how this can be used and and how this can be yea put to the masses and a lot of people are then mainly

mainly curious and in what these plans are and how they can possibly copy them or how they can or how these plans might conflict with their personal interests or their corporate interests I have a bit my doubts I don't be the plan and I'm very suspicious when when when these strategies are so hidden usually including the Facebook and whatsapp was supposed to have a transfer mechanism the payment mechanism which I believe was rolled out in India too and it was a lot more easy to understand how people are being on boarded and off boarded and

how people then use this to send money between each other in libre this is entirely unclear we don't know how people are going to get their hands on these on these Libre coins we don't know how people are going to be able to to trade them or or for what purposes people are going to be able to use them and I think most importantly we don't really know how people are supposed to price their products and services in Libre and how the market is gonna like find a good local exchange rate and that's also the most exciting or a more interesting part about Libre for me is that Libre is a free-floating currency

it might be a backed by a basket of fiat currencies but it's not pegged one-to-one and that I'm supposed to ask for a Libre to libros three point three libras when selling a product unlike all the previous efforts of tech companies to build the payment platforms and and mobile wallets which were always priced in the and the local currency right yeah I think I think that is a powerful notion and Louise would what are you seeing in terms the reaction to Facebook's Libre so I I guess I guess

you could say that I am both in admiration of and horrified by the Facebook strategy thus far I mean they really are they haven't been they haven't been putting this together for just a couple years it's been it's been many years I would I would argue and I think their first real attempt at this it kind of dovetails into it is the internet.org initiative from but way back in 2013 if you recall that that was a an initiative to bring the internet heavy air quotes on the internet to to people who couldn't afford airtime right so they launched it all over Southeast

Asia they launched it all over Africa so now there's as many as 40 maybe 50 million people around the world who whose first experience of the Internet is kind of freed facebook.com/ right and part of that is you can use the messenger you can use whatsapp you can get a kind of a you know a media light version of Facebook without having any airtime credit on your phone and what that means to me is that they're probably gonna have more uptime for their their Libre wallet than most third world banks because you don't even need

internet access technically to use it like if you're as long as as long as you've got a SIM card in your phone you'll still be able to use it regardless of whether you have any data on your on your phone which is kind of an interesting proposition so if you remember in 2016 Facebook obtained its remittance license in Europe so been planning this for for quite some time now like they're trying to build a platform for kind of you know the the lowest kind of socio-economic bracket that will allow them to sell send payments and in receive payments using the Facebook platform and they've

already been setting up the regulatory kind of their the they've been setting it up from a regulatory standpoint since as far back as 2016 I think that because of this because of all of the kind of things that they've had to have in place before they went and launched Libre I think we have to kind of at least respect but you know this is a serious initiative from them and I I think that you know come 2020 when they actually launched a thing we're going to see like a pretty major sea change at least among its kind of remittance businesses because Facebook's Reach is so big that you know it far exceeds kind of the the

there any anyone else's network really I mean I guess Western Union is still in a hundred countries so that might be the one kind of network that the Facebook is not as large as but I think that you know if they use a combination of you know their their free internet connectivity and the fact that they are subsidizing customer transactions very likely I think that that's going to be a very powerful proposition for your average customer the other reason why I actually think it's it's a pretty good step this one is a little bit more controversial but I am I did write about

this as well I was saying that you know your average Filipino and I can speak generally about your average Southeast Asia if you look at it from a the perspective of your average millennial for example so your average twenty thirty some things here they they don't remember that you know around the years that they were born you know the Philippine Peso was able to buy you know like $1 for 27 vessels but you know today you can only buy half a dollar with that same amount of money so kind of in the space of you know a generation we've lost about 50% of our buying power against the dollar

and I think that the the potential of Libra is that you know it might actually provide a kind of a weird backdoor way for for people to get out of the Philippine Peso so I've been kind of advocating this I realize that this is a very honor kiss kind of point of view but I've been advocating for people to stop saving Philippine Peso for a long time now mostly because you know year on year we lose about two to five percent of our buying power against the dollar that's been fairly consistent over the last decade and so you know saving your pesos in the bank just doesn't really

make sense you would never be rewarded for it in the long term yeah in the long run Libra could be like threatening to developing countries with weak money for that reason like yes a lot of people start doing that yeah yeah and I think that in a way it makes sense because you know like if there's a there's a simple safe accessible way for your average Filipino who is not making a whole bunch of money right for the average person if there's a safe way for them to get into another currency any of the primary currencies would do I think that's so far superior than holding vessels right so in the West kind of the general

themes of crypto discussion have been you know continued interest in Bitcoin because of its properties that are similar to digital gold then this question about aetherium as it tries to scale and for that reason more broadly kind of the corner smart contract Wars where we're seeing these other smart contract platforms launch and and then people have also been interested in these interoperability protocols like cosmos and polka dot and for whatever reason also perceiving that those might even be competitive with aetherium what are the themes of discussion in the Asian crypto

community or what have they been kind of over the last year we certainly see a lot of projects trying to be the next aetherium that's in quite big in similarity to maybe 2015-2016 when we saw a lot of projects trying to become the next Bitcoin and now we mainly see Assyrian challengers emerge but I don't think people have a good idea of what smart contracts mean or what smart contracts can achieve people often expect them to be to be general little computer programs that they can plug into anything they want for example public transportation or where their bank accounts which can then enforce

certain conditions and things like the Oracle problem are sadly not discussed enough but a lot of this is a big investment play the etherium has been successful at yeah making a lot of people a lot of money in a short time and when people want to build the next aetherium what they want to build is the next big get-rich-quick machine and not so much a functioning smart contract platform and in a way that's what investors expect you ADA has has really seen over the last decade or maybe even over the last two decades a explosion in

asset prices and no matter where you go in Asia real estate is becoming unaffordable anything any kind of licenses any kind of any kind of asset has increased in price and there is a lot of capital that is looking for alternatives and the local stock markets are often not developed enough there's there's Tokyo and there's Hong Kong and then there's nothing else and that capital is not always easy to to send to the USA Europe born might not be politically convenient and cryptocurrencies and specifically smart contract platforms are taking up a lot

of this capital and when when investors want to invest and there's going to be some people who are going to create these investment opportunities even when that looks a bit scammy or when that is not built on a solid technical foundation so this doesn't have to be a long answer but I was just curious what is the Asian crypto community think of Tron I mean here in the Philippines at least yeah it's kind of hard to take him seriously I feel also don't think that we have as much of kind of the Tron glow as maybe countries that are closer to to

the Tron headquarters are so weird so we kind of see it mostly as we're Outsiders he's just one of many other kind of founders that have tried to you know really really push their product you know he's definitely got your eyes Dwight paper sure yeah I mean I'm not even gonna argue that part yeah yeah it's I mean he is a real character I will say that and I think that but we've seen that before right we've seen that I mean sorry not the plagiarizing part certainly not but like like blockchains that were you know immensely popular without necessarily kind of having

product that you know kind of did anything I think that I think that we the from the Philippine perspective we're still very much kind of in the kind of the bitcoin is crypto kind of mode there's very few people that are kind of looking like to to the alts for anything other than a quick kind of bump in their their holdings I think and Leo would have do you know what people in that region think of Tron I don't hear much from it I don't even get a lot of trunks them we don't see proponent or we don't see people explaining it um yeah I don't hear much all right so I'm confused as to where this market cap comes from but

anyway okay so we're running out of time but because we have Leo on the line obviously you know you're in Hong Kong which has been in the news a lot and I did discuss this briefly with Alex Gladstein and I did mention to him you know I just put myself in the shoes of those people and I just imagine if I had grown up in a country similar to the u.s. in terms of his freedoms and then suddenly you know it was like oh it's going to become more like China like that would be hugely terrifying to me so I wanted to ask about these protests have those protests had any impact on the interest in Bitcoin or

cryptocurrencies or in the activity you're seeing in the crypto space or vice versa like or is you know are people using them in any kind of interesting way the protesters I mean not directly I think when people think about the very short run they're worrying about how to prevent this law from going through or they're worrying about how they can pressure the chief executives into apologizing or how they can most efficiently surround the government headquarters and Bitcoin is not like immediately relevant to that but it does come up a lot more in conversations when people are thinking about how to how to prepare their move out of Hong Kong and we've seen the news

of a couple of tycoons a couple of billionaires preparing to move their money out of the country and of course people have the same worries they have to worry that their money could be seized much more easily than than they could and it for people who don't have the ability to move money abroad because they don't have foreign bank accounts or the sums are not significant enough Bitcoin has quite a bit and discussion so much to move money out of Hong Kong by simply putting it in Bitcoin and people it's a I think it's quite frightening that people are talking

about the possibility of for example war with Taiwan or the possibility of having to to flee Hong Kong as the government violently suppresses some some protests but Bitcoin does come up in those discussions it's just that those are not necessarily situations that people want to see and associating Bitcoin as this tool of last resort might not be the best Association either because we believe Bitcoin can be better money even in a in a peaceful and then developed future and not so much only in a future of war and misery all right so because

time is short we're gonna just move quickly through some other important topics so finance most important company in crypto arguably now they are doing everything they launched it decks they're gonna issue these stable coins they're gonna offer borrowing and lending they just announced this bitcoin peg token there's so much going on there what is the perception in Asia of bitcoins Bitcoin of finances direction I see them very much admired I see people very much admiring their founder and the company of having built a product that's accessible to the broad masses of not yeah of not trying too much around what

is what is relevant and people people seem to love their products I don't think I think finance knows exactly where all this is going which is fine we also don't know where it's going and for by Nance to branch out so much and try out everything is mainly an attempt to not miss out on whatever the next big high cycle might drive yeah I agree and it has this reputation but damaged at all by the hack I mean we did not even really see any change right from the hack like it seems like they're still as popular as ever people came to me even quite impressed with how that

was handled for example compared to other exchanges in the region yeah okay well we'll see um I mean I think finance is also hugely admired here in the West even as they did finally block the US all right so to wrap up when we talk about which Asian crypto projects people are excited about and and also which people in that region you know you think maybe are not as well known in the West but probably should be so interesting projects or people in Asia I think there's a lot of great technical innovations coming out of Japan for example the folks of crypto

garage which is part of digital garage I think they are getting not enough credit for the yeah technological work they do and I feel that especially when it comes to lightning or when it comes to smart contracts on Bitcoin or when it comes to second there a lot of the yeah a lot of the same is still soaked up by Silicon Valley and a couple of places in Europe and Japan is very much contributing to that and wait so what are they doing exactly like you said the projects they're working on but what are they working on for example yeah second layer settlement networks not thing similar queue to liquid or even building on top

of liquid yeah okay well so one startup I'd like to highlight is a company called bit spark out of Hong Kong so founders George Harrop and Maxine Ryan have been at this for a little over five years and you know perhaps is a personal bias of mine but I think the reason why I'd like them is that they tend to have the kind of a similar similar instincts as as my company when it comes - how to bring this stuff to kind of the you know people on the ground and that's kind of always been a big kind of mindset that that I think is very necessary because the as we've kind of spent the last hour talking about the

you know the the Asian mindset is not necessarily the same as maybe you know kind of the North American one and I think that building specific products for this this region is a better strategy than then say kind of trying to trying to shoehorn maybe a product that was designed for the Western market into here so you know they're doing things like they were doing things like crypto remittance they're also doing things like a money exchange a moneychanger teller platform and in those ways are our two companies are quite similar

except they're doing it kind of on the Hong Kong side what we're doing on the Philippine side so I quite like what they're but they've been doing lately Green okay well clearly there is if there is a time to discuss in Asia obviously it's a huge region it's probably a little bit more than we can fit into an hour-long podcast but we did go over time but where can people learn more about each of you and your respective organizations so I'm at hello Lewis on Twitter and my company website is blue dot solutions we are a Bitcoin works at HK easy to find us on various

social media platforms including Meetup please do say how I went if you're in Hong Kong we need even if you're just traveling through say hi even if there's no metered scheduled maybe we can schedule one we always love to meet new people and connect Hong Kong to the world and Leo why don't you also tell your Twitter handle I met on Twitter at leo aw yeah ping me there okay all right great well thanks both of you for coming on Unchained thanks so much Laura thank you so much for having us thanks so much for joining us today to learn more about Leo and Lewis check out the show notes inside your podcast player if you haven't yet taken the unchange survey now is the time go to surveymonkey.com / r / unchanged survey

2019 to tell us how we can do better at unchanged and don't forget those who enter the survey can enter to win one of five free casa bitcoin lightning notes plus a free year of Casas gold membership thanks Casa for donating unchained is produced by me Lauren live help from fractal recording Anthony youn Daniel knows enriched roughly known thanks for listening [Music]