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In a recent video, Bill Gates articulated his optimistic view concerning the future of a digital financial system. The benefits, he says, are so significant for those in poverty that the developed world has a responsibility to transition to a digital system.
Bill Gates is known to have a harsh attitude when it comes to cryptocurrencies. Recently however, his opinion has changed.
In a video shared via YouTube, Microsoft’s co-founder explained his thoughts on how digitized financial systems can solve problems involving human poverty throughout the world.
It is clear that for Gates, the digitization of finance features enormous benefits:
“If we were building a financial system from scratch today, we’d do it on a digital platform. Digital can lower the cost on a range of transactions by as much as 90%, providing nearly universal access to innovative financial products and services.”
Unfortunately however, we don’t have such a luxury. That’s why Gates says we need both the proper “vision” for a digital future, along with the “wisdom to manage a secure transition” from our existing financial system.
Gates went on to add that given the world’s current situation— which includes an overwhelming amount of poverty— we have a responsibility to make such a transition:
“…with more than two and a half billion people not able to get at formal financial services, the opportunity compels us to do it.”
Gates further discussed how the world’s poorest people do have assets: their intellect, labor, and their savings. However, the lack of financial infrastructure in the developing world exploits these assets, as opposed to allowing these individuals to see their full benefits. A digital financial system would bring a much needed change, says Gates.
“Innovations like vaccines and high yielding crops have changed the future for billions of people. We’re on the cusp of another breakthrough innovation, including the poorest, in a financial system that increases instead of limiting the value of their assets. Transforming the underlined economics and financial services through digital currency will help those who live in poverty directly.”
Following this line of thought, Gates proposed two priorities in terms of moving forward.
“I see two priorities for the immediate future. First, we need to drive the policy changes to make sure the poor can get engaged at this level. And second, we need a measurement system that tracks the progress towards drawing people in— not just have accounts, but to really benefit from financial activity.”
Recent regulatory bodies throughout the world have made changes regarding the regulations of digital assets.
While the United States’ SEC has consistently implied that Bitcoin is a commodity and not a security, SEC Chairman Jay Clayton believes that the majority of ICOs he has seen do constitute securities. He has notably stated that he is not going to change the existing regulations to suit a technology. That announcement came shortly after the SEC penalized both ICOs and exchanges for securities violations.
In the developed world— which features more prevalent access to banking and financial services— regulatory bodies have focused on the latest wave of blockchain technology: the tokenization of securities. A debate has emerged concerning whether or not security tokens are subject to existing securities laws, or if new laws are needed.
While the regulatory bodies of the developed world focus on issues in the developed world, many believe Gates has an interesting point. If policy changes do aim to make digital currencies more inclusive to developing countries, the overall adoption of blockchain technology could see a significant rise.
What do you think of Bill Gates’ comments on the benefits that digital currencies can bring to the developing world? What policy changes need to be implemented in order to realize such benefits? Let us know what you think in the comments below.
Image courtesy of the Evening Standard.