[Music] welcome back to red hat summit 2021 my name is dave vellante and you're watching the cube where we go out to the events and extract the signal from the noise of course virtually in this case and i'm pleased to welcome victor carumpus who is the senior vice president of digital banking at bank mandiri coming in from jakarta welcome to the cube victor great to see you hi dave great to see you and great to be invited here thank you yeah you're very welcome i i wonder if you could just give us an overview of the bank maybe talk a little bit about your strategy your customers you know what the what the focus is of your company and what your role is there okay uh maybe i'm i'll give a short overview about bang mandir itself so bang money is a state-owned enterprise owned by the government but we also public company currently we already have a very big distribution channel in so uh you know indonesia is an island country it's very huge country so we are we are representing all over indonesia from province of aceh and i'm up to profits of papua and we have about 2600 branches all over indonesia and about uh 15 000 atms all over indonesia so bangladesh itself is focused on a lot of segment customers like indonesia from the corporate side small medium enterprise and also retail banking now uh we are we are currently focused in turning ourselves to become having to have more digital capability and currently in our uh current situations actually it is very good uh about 95 percent of our transactions is already coming from the electronic channel so it's only about five percent that coming from the branches but we know that this is still a journey uh and we are building more digital capability and features and functions on our digital channels to our customer got it um okay and so your your your digital journey kind of coincides i guess in a way with your your your container uh adoption journey uh i think that started a few years ago um and so maybe you could talk a little bit about that i i mean in thinking about modernizing your application portfolio obviously containers been around forever but they weren't packaged in a way that could actually be easily you know utilized and now you're seeing people in i.t roles like yourself really leaning in maybe you could talk about some of the technology considerations that impacted that desire to actually leverage containers i think uh first it's about the scalability because with a monolithic architecture it's kind of difficult to scale up for only specific features by doing container microservices we have options to scale up in a very fast way because one of the features is auto scaling on the container architectures uh one monitor is a very focused on the transaction banking so you might say bangladesh is supporting the economy of the country because in a in any given time in bangladesh we we're running about four thousand transactions per seconds that's a huge transactions number and have having said that uh our channel like i told you already running about 95 percent of the transactions so scalability is always important for us because especially like like now is the the in indonesia is a festive month it's a ramadan month where muslim is actually doing fasting but at the same time actually there's a lot of needs and people do a lot of transactions and on this kind of festive seasons the transition can be increased up to 40 or 50 suddenly and that's kind of things always happen in bangladesh and we must be ready and we must have a scalability on demand now containerization is enabling us to do that other thing is about flexibility because on the old days actually when we want to set up a new environment it's very difficult and takes a lot of time and that's affecting the time to market our products by doing the containerizations and putting it on a ci cd continuous integration called the development plan platform we are we call devsecops platform that kind of things becoming automatic because we set up the devsecos platform and the third one is the consistency actually so by by doing the contact investigations we can put the the apis on our back-end apis in the container itself and actually it's deliverable environment and a consistent experience to our customer because for example we promise our customer that every transaction should be finished within two seconds from their mobile banking up to our hosts and back forward to their mobile banking is only two seconds so that kind of thing is driving us to move to the current technology which we're using containerization and micro services great okay so 4 000 transactions per second you can't can't do that on erc20 ethereum for all you crypto fans out there that's that's pretty high volume uh and if i understand it correctly victor your role is really to envision this digital environment and then ultimately make it happen from a technology standpoint is that correct that's product that's got it yeah so okay so you now have a number of of product lines and teams you're using the same container platform maybe you could share with our audience some of the best practices and learnings that that you've taken away on this journey so i think first of all we can reuse a lot of components by doing this containerization platform is different when we still use the monolithic platform like the application server of java application server uh by using containerization actually uh be providing like a service banking as a service so whenever we build a new channel for example the first one we built a new service for example like a fun transfer service but when we create another channel for example a corporate banking electronic channel or we create another uh let's say wealth management channel whatever we already built before can be reusable instantly by using this technology so uh if i might say that actually there is a lot of best practices coming by using this platform and my team get a lot of benefit in terms of faster development time and also they can deliver the product and service in a high quality manner minimize the number of errors as well you know there's a lot of choices out there obviously i wonder if you could share what led you to the choice of red hat and open shift okay so first of all before we choose the platform actually we also comparing ourselves with the with the fintechs and also with the big tech in indonesia as well so we see we see that actually they already start using kubernetes and uh their platform is quite stable and even they can support about 90 to 100 million of customers without any issues at all so when we see this uh we choose a lot of we learn about a lot of platform and we finally choose opencv because we think that openshift and we we already do our research openshift is quite stable and for banks like us that have for having 4500 transaction per seconds stability is number one uh availability is also number one now uh having said that after doing our research we choose openshift and we implemented openshift in our environment because we promise our customers to provide 99.95 percent uh availability can i just i'm sorry to interrupt you victor can you just repeat that you cut out a little bit so you you said you you promised your customers to deliver and then you cut out a little bit can you just repeat what you just said there okay so we're giving a promise to our to our customer providing a 99.95 availability so this is the starting point of our channel sure in the efficiency we have efficient also to providing four nines which is 99.99 but i mean the starting point is 99.95 and because we have that the demand that requirement that's one of the reason we choose the openshift and red hat as our technology stack platform got it okay and so i have a question um what was it like in terms of just the skills and the adoption uh for your developers uh was it was it a big gap to go from where you were to you know where you are today did you have to what kind of training did you have to do did you have to do any sort of outsourcing to accelerate that maybe you could describe that how you close that skills gap so definitely in the beginning is quite challenging because although they are using modern languages like jaffa or kotlin but uh to understand the concept and to design correctly yes we we did a lot of training to them uh it takes a it takes me about three months to give them the proper training uh in terms of building the right uh microservices platform and also to building modular architecture in terms of the customer channel because this will be the fundamental when you build it correctly in the beginning and actually at the later point you will enjoy the benefit so the first three months actually is training and doing research and development and doing a lot of trial and errors but after the three months actually we already have the right technology stack have the right models and our devsecops is already working then actually after that the speed is very fast because uh it sprints uh we do agile way of working the agiles dlc it's only one month so every one month we already have new features coming in so that's what we call a huge transformation a digital transformation inside of our bank it's three months actually not bad i mean i would i would have thought on average it's going to take five or six months to get people up to speed so three months is pretty good and i'm also inferring that you weren't just paving the cow path you weren't just saying okay let's take our traditional and then you know re refactor it to digital you had to re-envision what digital looked like because the digital is different uh than the traditional uh so so that's actually pretty good uh ramp rate i wonder if you could just go ahead and comment if you could because when you say about uh revamp so actually it's not on the id side not only but also the business side we implement new way as well so actually if clearly they're implementing a new model so they're using a design thinking and also a co-creation model where now when we building a product so we're not writing the old product in a new way no we totally building it from from scratch and involving our key customer and our stakeholder when we're building this product so actually we implementing new models what we call design thinking and also uh co-creation with our customer so that's actually changing the face of the customer electronic channel a lot and and actually when we when we want to to deploy we invite our customer to test it first we call it like usability testing if they like it we continue to design if they they don't like it they give us a feedback how they would like it to be changed and and that's we appreciate our customer feedback because customers experience is everything now yeah so so the product can be accepted if the experience on that product is really making customer uh solving their problem solving the customer problem and making them enjoying uh doing transactions in our mobile banking product i think this is a really important point for people to understand so you weren't just paving the cow path i call it you're taking the old and and just trying to refactor it and make it exactly turn it into digital you had to really think about the business the business processes the dependencies the customer experience and then bring it back um what have been some of the business outcomes of this initiative and maybe you could we then after that we can get into some of the the future plans so so the outcome uh i think this journey uh since last year uh not last year actually since no october 2019 we already started the journey uh what took us by surprise is actually the pandemic uh suddenly the first three months when we have the pandemic of coffee we are being forced to close a lot of branches for temporary because we want to avoid the pandemic situations and that time actually the the demand using our digital channel is increasing a lot but because we already prepared actually we get the benefit one of the thing is uh the business benefit is relating so during the pandemic nobody can come to the branch and mostly the account opening actually happening online so uh we even got about 9000 account opening per day which is something that we are not imagining before so uh the benefit is very clear by using this this technology actually enabling us to provide digital capability for our customer and enabling us to open more accounts we see ourselves can grow even not linear but exponentially grow by using this platform uh talking about that indonesia is a is a huge country with we have about 200 250 million populations and actually there's still a lot of people is not having a bank account at all now by doing this actually we open opportunity doing financial inclusion for those people that need a banking account now they can reach us by using the digital platform as well yeah that's an awesome story and it goes back to the to the reason the real motivator for for moving to kubernetes and containers was scale uh and and you know it's you obviously started your digital journey prior to the pandemic but a lot of customers and i'm sure you as well were were forced to speed up a portion anyway of the digital component uh because of the pandemic like you said you couldn't people couldn't walk into the branches so but now you've got some more time to think about that journey you've had a lot of learnings 2020 was like a petri dish of experimentation but but in real time having to serve customers what's the future look like for the bank's technology journey okay so basically we uh we are not stopping only on the retail side yeah uh we want to redefine our customer journey also on the wholesale side and also on the small medium enterprise there is still a lot of things that need to be done uh and required by the customer actually so uh on the on the on the sme side we want to give them easier access uh for uh financing their businesses i think when we are back to the new normal uh the business need to have funding for for starting their business again so building an sme platform for them will will help a lot and will help the country as well on the retail side actually like i told you uh we are focusing on the more financial inclusion because uh i give you example right uh from the 230 million of indonesians uh populations i think by today maybe it's only about 50 million customers that already have a banking account so there is still a lot of people that need an access faster and cheaper and more efficient way for doing banking transactions so that's this also will become our focus and the last part is actually corporate what we see now a lot of the corporate require us to open uh api connectivity doing open banking with them the government actually the central bank supporting it supporting all the banks they are trying to create an api playbooks now and then they create they want to create an api standard for all the core all the use corporate also can connect it to the bank directly using api so this is also our focus because it will help the country economy when the economy costs the transaction costs getting more efficient getting more cheaper and there's a lot of transaction can be supported by our bank as well so i think i think that's the the future that we are imagining and i'm really hope that the pandemi will be finished and we come back to the to the new normal and we can support more transactions for this country yeah you're here to that i call it the new abnormal but so this is this is a great story everybody loves to talk about disruption we do as well and but people think oh it's out with out with the old in with the new and it's not like that this is a great story victor of uh of an established incumbent that is modernizing its its applications and its digital experience and of course the incumbent has the advantage of it's a real business it has customers that has a data it has experiences it and if it can modernize its infrastructure and and it's in its application portfolio it actually has an advantage because it's got way more features way more data way more customers and more resources so victor thanks so much for coming on thecube i really appreciate you sharing your story thank you dave thank you for inviting me thank you that was our pleasure and thank you for watching red hat summit 21 this is thecube you

>> from Bahrain. It's the Q recovery AWS Public sector Bahrain brought to you by Amazon Web service is >> welcome to the cues conversation here. You're in Bahrain for Amazon Webster, is this summit our second summit? Um, here. Big news. Amazon Web services announced the availability of the region in the Middle East. I'm here with the chief of Public Sector Theresa Cross and vice President of Worldwide Public Sector. This is a huge milestone. This event one just in terms of the event. The interest across multiple countries in the region. Yes. And you have a new region with multiple availability zones? Yes, up and running. Congratulations. >> Hey, we launched the confetti today and yes, we're open for business and we do. It's a hyper scale region with three available the zones and lots of activity already here in the delays. But it really is a substantial kind of milestone because we started this sometime back in the Middle East, was one of the top regions around the world requested by our partners and customers. And now here we are. >> We've been talking with you for many, many years and I love interviewing you, but this one to me feels like it's not the weight off your shoulders. It's you're at the start line of another marathon. You've achieved so much with this because what's the first thing about Bart Rainey? We've reported on this on Select Angle and our other sites is that you get a lot of work here, is not just turning on a region. There's a lot of government commitment cloud first, full modernization, fintech banking systems, a full re platforming of a government and society and Amazons powering a lot of it and causing a lot of economic growth. So this is a big deal. >> It really is a big deal because, like you said, it really is about digital transformation here. And when I met the crown Prince in 2014 we had this conversation about really creating the economy here in a different way because Bob terrain itself, it's not oil rich country, but a smaller country with lots and lots of tourism. But in this region, while we haven't based here in Bahrain, this is truly a Middle East GCC region and but But part of that, the reason to start it here in my reign was that they really did take a lead in government transformation. As you heard them say, they're going all in shake Some on today talked about government is moving really fast, and they actually did the hard work to think about their telecommunications industry, their government regulations. They started with cloud first, and then they created all the write regulations to make this happen. So it is kind of phenomenal how quickly, in some ways, you know, feel slower than we'd like, But it's really moving quite fast. >> It's pretty fast. You should get a lot of kudos for that. I think you will. But I think to me what's interesting. The news here is that there is a balance between regulation and innovation going on, and regulation can be hampering innovation, some cases and not enough regulation. You have a Facebook situation or >> right so >> it's a balance. These guys have done it right. But to me, the tell sign is the fintech community, >> because that's where >> the money is. The central bank and then the ABC bank are all talking about a pea eye's all in with Amazon that's gonna create an ecosystem for innovation. Startups, et cetera. >> It totally isn't you heard Thean Vivid Jewel from ABC Bank today talk about their platform. What they're doing with clouds and the reason they chose a DBS was because we had this region of Bob Terrain, and they wanted to move quickly in. The regulations now have been updated in a way that actually allows them to do their banking applications in the lab. There's also a startup accelerator here, Fintech May, and they're doing a tenant work with new types of financial applications. So it's so exciting to see this kind of happening than the lace for I think a lot of people thought it would be much slower. We have a ways to go. It's still day one, for sure, but all the building blocks are getting there in the right place to really make this happen. >> You know, 80. Jessie's quoting the announcement you guys had just a couple weeks ago. Laura Angel And in July, the clouds of chance unlocked digital transmission. Middle East, says Andy chassis. Obviously unlocking is a key word because now you have customers from startups to large enterprises and ecosystem of a P M party. So the Ap N Group is here. Yes, So you have global I SUV's here and knew I s V's. You got the government and the education and to me, the news of the show. To me at least maybe it's not the big news, but is that you guys? They're offering a computer like a cloud computing degree. Yeah, for the first time about that news, >> you are right in terms of kind of every sector's picking at, but like in most places around the world, this is not unique. We need skills, and we've got to make sure that we're teaching the skills, working backwards from what the employer needs, like a TVs. So what? We've been here. We announced today we're launching our first cloud computing degree at the university of our terrain, and they're kind of thing. That's really unusual, John. They're going to do a phase one where they offer a cloud certification starting in early 2021 every program at the University of Bahrain, Whether you're in finance or banking, or business or health care or law, you can do this cloud computing certification, which gets you going and helps you understand how you last cloud in your business and then in the fall will be announcing the four year starting, the four year cloud computing degree, and that is in conjunction with our A DBS Educate program. And it will be all the right cloud skills that are needed to be successful. >> Talk about the demographics in this country because one of the things that's coming up is when I talk people in the doorways and it's a chance to talk to some local folks last night that that all in an Amazon, the theme is this. This younger generation yes, is here, and they have different expectations. They all want to work hard. They don't want to just sit back on their laurels and rest on their on their location. Here. They want to build companies they want to change. This is a key factor in the bottle rain modernization. Is that >> Yeah, generation well, all across the Middle East. The thing that's unique about the mill aces, the very young population you had millions of gamers across the Middle East as an example that comic con and Saudi like two years ago on that was one of the most popular things was fortnight. As soon as the region got at all the different gaming started taking place. But we want to create a culture of builders here, and the way you do that is what you said, John putting it into their hands, allowing these young people have the tools create a startup became entrepreneur, but they need to have access to these tools. And sometimes capital is often not that easy to get. So they want to make sure that the capital that they're given or that they have, whether it's bootstrap capital or venture capital, fending or whatever friends and family, they want to make sure that they can use that capital to the greatest advantage to build that company out. And I truly believe that this is gonna help them having an eight of us cloud region. I mean, you saw. Today we have 36 companies that launched their offering in the region on the day we actually announced so that they had specific offerings for the Middle East, which pretty exciting. I mean, that's a lot on day one. >> I mean, it's still day. One of you guys always say, but literally day one they were launching Yeah, I wanted to comment if you could just share some insights. I know, Um, your passion for, you know, entrepreneurship. You guys are also some skill development investing a lot of women in tech power panel this morning, there's major change going on. You guys were providing a lot of incentives, a lot of mentoring, this internships in conjunction with by rain. There's a lot of good things. Share some of the new things that you're working on, maybe deals you're talking about doing or >> way announced Thio kind of new things today. One is we have our we partake program, which I'm, of course, super passionate about. And that is about preventing tech learning and skills to women and underserved in representative communities. So we announced three other training programs here across the Middle East time. So those were put up today and you'll continue to see its role more and more of those out. And the other thing we did yesterday we announced a internship program with the minister of Youth here in Bahrain. That was shaped Nassir, who's a very famous He's that King san, and he's a very famous sportsmen. He does. He just won the Ironman Ironman and 2016. It was the world champion. He does endurance horse racing, so he's a He's a someone that the youth look at to here, and so he's doing all these programs. So we announced a partnership that were the first group doing the internship with this youth program, and so we're very excited. We're going to start that small and scale it, but we want to get these young people quickly and kind of get them excited. But here, what they focus on it is underrepresented communities. So it fits so nicely in with what we're doing with our attack. So you have both Oliver training our over 400 online courses that we offer with a dubious education academy. Now degree now our internship program and we protect. So, John, we're just getting going. I'm not saying that this is all will offer, but these are the things that were getting going with, and we need to make sure we also Taylor things like this Ministry of Youth program and sports at to the region in terms of water, their local needs, and we'll make sure that we're always looking >> at the entrance. Just just get him some great experience. Yes, so they can earn and feel good about themselves. This is kind of a key, exactly thing not just getting an internship, >> and it's, I think, locally it will be about teaching them to do that, disagree and commit really have that backbone to build that company and ask all those hard questions. So we're really going to try to indoctrinate them into the Amazon a TVs culture so we can help them be entrepreneurs like we are every day. >> And you got the data center, you got the city, the centers, you get the regions up and running, and architect, it perfectly suits up with people in it. Are you going to staff that with local talent, or is it gonna be Amazonian is coming in? What's the makeup of staff gonna be? What's the >> story? I mean, our goal is to hire as many local talent. We everywhere we go around the world. We want to get local talent because you can't yet if we did, First of all, we don't have enough people in our headquarters to bring folks in here, so we really have to train and educate. But locally, we have an office open here by rain. We haven't Office Open and Dubai and one down Saudi, and that is local talent. I mean, we are trying to use as much local talent and will continue to create that. And that's kind of the point. Jonas talking about the degree working backwards from what the employer needs. We want to give input because we think we also are getting good. Yeah, so we need to get the top. But we need those other individual employers that keep telling us we need more cloud skills to give that input. But, yeah, >> we're going to get a degree, migrate them into the job >> market, right quick like >> and educates. Been doing great. I learned a lot. This is a whole opportunity for people who want to make money, get a job. Amazon Web service is >> It's a place you could either work for us. Work for someone now, like even the government has a >> virus. Make a person tomorrow >> there. Yet >> we had one, >> but the point of being a builder, what we're seeing more and more John are these companies and government entities are building their talent internally. They're not outsourcing everything anymore, and the whole culture at being a builder, not just outsourcing all that. And that's what eight of us really helps all these entities. D'oh is moved quicker by having kind of some in house talent and not outsourcing everything to slow you down. That >> really thank ABC pointed that out beautifully in his point was, Hey, I'm gonna you know, I'm all in on AWS. We have domain expertise, We have data. That's our intellectual property. We're going to use that and be competitive and partner. And >> yes, and the new models it is. And that I p stays in house with that company or entity or government organization. It was so fun for me today to hear Shake some on from Maggie. A talk about the government is moving fast, and I think that's an example of a really are they figured out clown helps him just go a lot faster and save many security. >> I'm glad you brought that up. I know you got a short time here, but I want one last point in. We've been talking a lot about modernization of government, your success with C i a United States jet I contract still under consideration. All this going on you're experiencing by ranges and, um, unbelievable, fast moving government. They kind of get it. United States some places gets it. This is really about focusing in on the workloads. What have you learned? As you've been engaging these modernization efforts with governments summer slow, some of political ramifications behind. No one wants to lose. Old guard will hold onto the rails. We've seen that in the news, but this is coming fast. What are you learning? What do you >> take away its leadership? I mean, at the end of the day, all these things were driven by a very strong leaders. And even you can see everybody today on stage. It is leaders that make a decision that they wanted a faster and they want to modernize but have the capabilities. No matter if you're the U. S. Department of Defense. Ah, yes. Health and human resource is National Health Service in the UK or RG a hearing by rain, the government's or enterprises that we work with around the world. The key is leadership. And if there's that leader that is really strong and says we're moving, did you actually see organizations move a lot faster if you see people kind of waffle anger. I'm not sure, you know, that's when you can see the slowness. Wow, What I will tell you is from the early days of starting this business in 2010 the individuals that always move fastest for the mission owners because the mission owners of whatever the business West at a governmental level or enterprise, they said, we need to keep our mission going. So that's the reason they wanted to walk through this transformation. >> And now, I think, with developers coming in and started to see these employees for these companies saying, No, no, what's the reason why we can't go fast? That's right now a groundswell of pressure you see in both government, public sector and commercial. >> And you saw Mark Allen today on stage talking about security. It iss literally day. Zero thing for us, and the reason a lot of our customers are meeting faster now is because of security. Cloud is more secure in their meeting to the cloud for security because they feel like they could both optimize, move faster for workloads, and now they have security. Better, faster, cheaper security, bad design, >> Theresa always pleasure thinking coming. Spending time. Thank >> you for coming to Barbara Ryan. Thank you. So >> we're going global with you guys is seeing the global expansion 20 to 22nd region. 69 availabilities owns nine more coming. More regions. More easy. You guys doing great. Congratulations. >> Thank you. >> Secure. We are here in Bahrain. Form or coverage. Global coverage of the cube with Reese Carlson, vice president of worldwide public sector. She's running the show doing a great job. We're here more after the stroke break. Stay with us.

>> from Bahrain. It's the Q covering AWS Public sector Bahrain brought to you by Amazon Web service is >> Okay Welcome back, everyone to the cube coverage We are hearing by rain for a W s summit where cloud computing is changing the games. The Fintech panel discussion Yasmine el Sharif, head of Fintech Innovation Unit, Central Bank of Rain Thank you for joining >> us. Thank you for having me >> Elmo Yacht. Whose founder and CEO of Ammonia Technologies Thank you for coming on. Thank you for having so We're very robust Conversation before they turn on the cameras Fit in tech is hot. I'll see in global fintech Everyone knows what that is, but it's interesting because entrepreneurship and innovation is not just for start ups. It's for countries and hearing by rain, this ecosystem and the mandate to go cloud first has had a ripple effect. We were talking about open banking, mandate, open banking versus regulation, chasing innovation, holding it back. You guys here taking a different approach. Take a minute to explain the philosophy. >> Yeah, I think there's there's benefits to being late adopters to the game. I think in the case of behind it's been a very interesting journey. I think the we started with the whole AWS. But if you look at the prerequisites of technical adoption and creating Data Pool's for analytics to run on, I think the what's interesting about Bahrain is it's really led by regulation. If you look at the prerequisites of creating a digital economy, what's happening in financial service is, or the digitization or openness of financial service. Is it really one context off the bigger picture of Bahrain's digitization plan or the economic strategy? And really, what happens here is if you look at first built the data fools and or the data centers bring a W. A s in and create the data centers. Number two is creator data or cloud First policy. Move the entire government onto the cloud and then give the ownership of the data to the people by implementing the Bahrain personal data protection laws. Once you've done that, then you've given the ownership to the people and you've created what we have is we started with a unique identifies. So the citizens of the country or the residents of the country have a unique identify our number where they're known by once you've done that and then you start mandating certain sectors to open up with a P I integrations. You're creating a very, very interesting value proposition. It creates a much faster you leap frog, a generation of technology. You're going from the classic screen scraping technologies or whatever to a very a completely open infrastructure and open a P I. Where things air cryptographic Lee signed. People are in control of their data, people can control the mobility of their date, and you're really creating a very robust data pool for a lot of algorithms to sit on. >> You know what I love about this has me were talking before he came on cameras that you guys are thinking holistically as a knocking operating system is being in a geek that I am. I love that. But it's not just one thing you're doing, it's a it's a system and it's it's a modernization view. Now we all know that financial systems, power economies and fin tech innovation unit, but you're in. This is important. You gotta have that. That leg of the stool, that pillar that's working absolutely sandbox. You have technology mechanisms to roll in tech, move things quickly moving fast. What's the strategy? What if some of the key things What's the sandbox? >> Let me start by saying The Kingdom of Bahrain has always been considered as a centre of excellence as a financial centre of excellence. And we do realize at the Central Bank in order for us to maintain that position, we have to innovate. We have to remain dynamic and agile enough to make the necessary reforms within our regulations to meet the dynamics off the digital economy. Technology is changing the paradigm off the financial system on the changes happening extremely fast. Regulators have had to come up with a mechanism whereby they can harness and test the feasibility of these innovations whilst putting the risks in a controlled environments as regulators were not typically assigned to host incubators to host startups. However, because of all this change in technology, it has become extremely essential that we come up with a regulatory approach to enable startups as well as existing financial institutions to test out their innovative financial solutions in a controlled environment. So a sandbox is really a controlled live bounds time bounds environment, enabling startups as well as existing financial institutions to test out their innovative solutions under the strict supervision off the regulator, without being required to abide by full regulatory requirements directly with volunteer customers. >> You have to put this trick standards now but means sandboxes. What developers? No, it's a collaborative approach, absolutely not being an incubator. But you're setting up a rules of engagement, Senator startups to take what they know how to do >> exactly >> end up sandboxes in the cloud. That's what everyone does >> absolutely, and our journey with the sandbox has been very successful. We've launched our sandbox back in 2000 and 17. Up to date, we have 35 companies that have been admitted into the sun box. We have been able to graduate to companies successfully. One of them has been licensed as a crypto acid provider, the other as an open biking service provider. We have four other companies in the pipeline ready to graduates. I think all in all, our experience with Sun Box has enabled us to grow and develop his regulators. It has enabled us to maintain open communication with animators, to come tea, to learn the needs of innovators and to enable innovators to live, get familiar realized. With the regulatory environment of the Kingdom of Bahrain, >> you know, you guys are doing some really pioneering work. I wouldn't want to say it's really commendable. I know it's fast and new, but if you look at the United States with Facebook there now asking to be regulated regulation if it comes too late is bad because you know things got out of control and if you're too early, you can put a clamp down and stifle innovation. So the balance between regulation and innovation has always been an art, if you will. >> Exactly. >> What do you guys, How do you view that? What's the philosophy? >> So from a regular perspective, we think that regulation and innovation goes hand in hand, and we have to embrace innovation open heartedly. However, having said that, regulators have to run all common sense checks, meaning that we don't accept an innovation that will potentially pulls more harm to the financial stability of the economy as opposed to the advantages that puzzles. We've passed the number of different regulations to support innovation in the financial services sector dating back to 2014 when we first issued our payment service provider licenses allowing more competition and innovation within the payments sector. We've issued CROWDFUNDING regulations. We've issued robo advisory regulations. We've issued insurance aggregator regulations, crypto asset service provider regulations, open banking regulations, Justin in a few. And I think that each of the regulations that we have issued solves a specific pain point, whether it's to enhance financial inclusion, whether it's to empower customers by retaining ownership back, uh, of their financial information and data, Whether it's too also empower startups and to enable them to get it gain access to funding through digital platforms. >> Have dual. I want to get you in here because as an entrepreneur, like I love all that great, I just wanna get funded. I want my product to market. I need a capital market that's going to be robust. And I need to have that's capital providers state venture capital for private equity supporting their limited partners. So I want to see that I don't wanna be standing there when I need gas for my car. I need fuel. I got to get to the next level. This is what I want And he bought >> on. I think, the one thing John that is very important that people look at in the context of fintech today. Raising money investing into fintech Regulatory uncertainty is one that defines scalability today. Once your technology is proven, where you go next really is dependent on the regulator that you'll be dealing with in the context of that specific activity that you'll be performing. In the case of Bahrain, I must say we were blown away by the receptiveness. We in what way? Yes, yes, mean mentioned open banking, for example. We got into the regulatory sandbox, which you hear a lot about sandboxes all around the world. We got into the sandbox. We got into the sandbox with contact with with with an idea of building and accounts aggregator direct FBI integration to these banks. And we got into the sandbox. We There were no regulations at the time. They like the idea. We started bouncing ideas back and forth on how to develop it. We developed the technology. We started piloting the technology. We integrated to 15 banks in the country on a sandbox environment. The consul, the white paper on open banking, was listed. They sent it out for consultation. We integrated on a production environment to more than 70% of the banks in it in the country. The central Bank of Bahrain mandated open banking across the entire nation. With every retail bank all in a period of less than 18 months. That's insane. That's the kind of context. So as a no Vester exactly so as an investor or as an entrepreneur that looks at the sector. The question is here. If anything, I think the regulator in Bahrain is the one that's leading the innovation and these air the benefits of being late adopters. We get to test out and see what's going on in the rest of the world and really develop great regulations that will embrace and and foster innovation. >> You know, I love the liquidity conversation because this neck goes to the next level. Liquidity is a wonderful thing started. Wanna go public? If that's what happens in the U. S. Mergers and acquisitions, we have an incubator that we're gonna interview here flat Six labs just had to come. One of their companies got sold to match dot com. So you're seeing a lot of cross border liquidity. Yeah, this is a new dynamic. It's only gonna get stronger, more come. He's gonna come out of my reign in the region. Liquid is important. Absent. So how do you guys want to foster that? What's the strategy? Continue to do the same. >> So from a regular perspective again, we don't really holds. Thank you. Beaters are actually two accelerators, but what we do as we refined our regulations to support startups to gain access to liquidity, for example, are crowdfunding regulations that have been passed in 2017 and they support both. Equity is one of financing crowdfunding, including conventional as well as Sharia compliant. Crowdfunding transactions were also currently working on refining our regulations for enabling venture capitalists to take roots and marine and to support these startups. >> Yeah, I think John, you mentioned two things you mentioned regulation leading. When you mandate something like open banking, you are ultimately pushing the entire sector forward, saying you better innovators fastest possible. And there's a gap that you need to you need to basically bridge, and that really loosens up a lot of liquidity when it comes to partnerships. When it comes to acquisitions, when it comes to these banks ultimately looking for better solutions, so they that's the role of the regulator. Here we are seeing a lot of VC activity come to the region right now, the region is only starting to open up. AWS just went live a few months ago. We're seeing the cloud adoption start to really take effect, and this is where you'll start seeing real scalability. But I think the most compelling thing here is Previously people would look at the Middle East with a boot with a bit of skepticism. How much innovation can really take place and the reality is here. There are a few prerequisites that have been put in place. Foreign ownership is at 100% cloud. First policy. There's a lot of things that can really foster innovation. And we're, I mean, where as an entrepreneur, where living proof off this whole Team Bahrain initiative of the fact that you can get in you can build in accounts aggregator in a country that never even had the regulations to adopted to mandate it and to be Ultimately, I think Bahrain will become the global reference point for open banking very soon because it has mandated a regulation of open AP eyes with cryptographic signatures ultimate security frameworks with a robust infrastructure across an entire nation. And don't forget, we still have a population of below the age of 30 70% of our population below. So it gives a very compelling story t test your technology. And then what we end up saying is, once you're on AWS or any cloud for that matter than the scalability of the technology just depends on where you want to go in there. >> No doubt the demographics are solid here, and I love the announcement here. The bachelor's degree. Yeah, cloud computing. We've seen some data science degrees, so new skills are coming on. My vision is interesting. I think that would interest me about the region of Amazon. Being here is these regions create revitalisation? >> Yeah, you >> guys are in perfect position with this Modernization trend is beautiful, not only to be a template for the world but a center for global banking. So I think to me, is that, you know is I'm trying to put together and connect the dots of where this goes in the next two decades. I mean, if crypto currency market continues to get matured and stabilized, that's still flowing with a lot of money. A lot of money in the relay >> absolutely >> was not just the region business to do here for couples to come here. It's you guys playing a role in global financial system. That's of interest to me. What's your vision? >> Absolutely. I think that regulators around the world are starting to realize the importance of collaborating together, to try and work on policy challenges in line with innovation within the financial service of sector and to share experiences to share lessons learned at the Central Bank of Bahrain were a member of the Global Financial Innovation Network, which is an initiative that has Bean passed by the F C A in the UK Again, we're also a member of the authentic working group of the GCC and through these two different initiatives, we work alongside other regulators to collaborate on solving policy issues, to solve, to share experiences and knowledge and to try and harmonize our regulations. Because of the end of the day, startups and innovators ultimately will want to scale up and want to serve customers across the friend jurisdictions. So it's important to have that kind of harmonization in terms of regulations to foster innovation as well as to safeguard the overall security of the international financial. Um, >> keep partnerships. Do you guys need to do to kind of go global on this 20 year vision? Is there other things they have to fall into place? That needs to happen? >> I think >> 20 years is a long time, I say in the next. Let's take five years, for example. If you say in the next five years and where I see this going, the question is, what do entrepreneurs and startups need to look at a jurisdiction and say That's where I want to test my technology. You need a robust infrastructure. You need a regulator than embraces you. You need technical subsidies and financial subsidies that are available, and then you need an independent arm that can really hand hold you and take you to that >> thrust. Its critical trust, money making absolutely ability. >> Just add to that and Byron, we take great pride in our human capital, which we believe is one of our biggest assets. And today, with having your Amazon web service is in Bahrain, this has enabled training of young Bahrainis for the data and knowledge economies which is expected Thio greet around 5000 jobs within becoming five years through different schemes such as Amazon education. For example. >> This is super exciting, which we had more time. Congratulations. Love the vision again. Occupiers like to make money. They wanted environments could be trustworthy and some scalability on behind it. So good luck. We're behind you. We'll keep following up. Thanks for having a cube coverage here and by rain for AWS. I'm John Ferrier. Stay tuned for more after this short break.

>> from Bahrain. It's the Q recovery AWS public sector Bahrain, brought to you by Amazon Web service is >> hello and welcome to the cube coverage here for a W s summit in by rain in the Middle East. I'm John for the host of the Cube, where here's our second year covering the evolution of cloud computing in the region. Changing the landscape of entrepreneurship Government society actually, data is the new oil so excited to have our next guest, Abdula Elmo, I kill who's the co founder and partner at rain hot. Start up with some seed funding, I think has cracked the code on the crypto money making aspect of crypto currency. Welcome to the Cube. Thank you. Thank you. So let's get started. You guys have a small team, get some seed funding. Interesting strategy on crypt. Everyone. When I see oh, kind of a fraudulent markets international, we all come and watch in the I c e o u s cramping down on it. Ah, lot of entrepreneurs love this market. A lot of innovation. You guys had a different approach and do some very innovative taking me explain what rain is doing because you've cracked the code on Crypto to Fiat. That's right, which has been the legit use case for making this all this >> Absolutely so all of the founders, the four founders? Yeah, Badawi, A. J. Nelson, Joseph Lago and I We've been in this industry for quite a while. We've been here 56 years, and we've seen all the hype cycles come and go about sometimes about Blockchain technology itself sometimes about the i c e o craze. Uh, and we've really just bought came down to what is the bit viable business model? We all were all entrepreneurs and we had looking for a new opportunity. Does with a lot of people coming into this industry with those with any innovation, lots of opportunities arise. And we've looked at the world and the world had many exchanges that were the most successful businesses in this industry. The exchanges facilitating the trade that was the most interest. That was the highest demand. That was the real use case. And we found that, um, there were exchanges popping up from around the world, but they weren't here any in the in the Middle East yet, And perhaps it was due to a regulatory, uncertain see or other difficulties of coming into this market. But Bahrain really opened up for us and we met with the Central Bank of Bahrain about three or four years ago and things really got started from there. >> And being a marketplace, you gotta have a lot of, you know, governance. It's all a lot of regulatory pressures from the folks that started. People who watch the Cube know that we've been very bullish on Krypton. We love Blockchain as an underlying technology. Yeah, that's, um, sustainability issues around Bitcoin and others. We recognize that, but in general this is a wave that cannot be denied. The moneys flow, right? So money's flowing in Kryptos, you scripted a crypto. You guys have the Fiat piece of it. So this brings on the first kind of liquidity opportunity in crypto thio. Real money? >> Yeah, absolutely. So that's our main goal is we're serving both retail and institutions and we believe there's going to be a lot of traffic from the traditional finance world, from institutions and individual investors into the crypt, a world and the opposite as well. A lot of people had challenges with taking the profits out of exchanges and withdrawing them to their bank in a regulatory compliant way. And that's really what we're solving here for the lowest fees in the region. >> But rain, once the blubbering, was to be modern society. They're going all in on cloud computing. They want to be a cloud country. They're open to new ideas. What attracted you, these guys? What made them different as it was that their vision was their posture on oversight? What was some of the things that make makes it work here? >> Well, at first it was the reception The behind central bank had a fintech unit already in in 2000 I think set a release 2017. So that was great. I think other central banks around the region and the world we're just starting. Then there was the behind fintech beh ah, dedicated working space for fintech companies here. So the ecosystem and the reception was really what attracted us at the beginning, other than knowing that Bahrain was a good financial hub for quite some time for the region. So we joined the Bahrain, um, Central banks regulatory sandbox which allowed us to experiment and test whether we can do this in a safe and secure way. And about a year and 1/2 later, uh, central bank drafted the regulations. Four crypto asset exchanges, brokerages s. So now that the regulation have got drafted and published, we graduated from the sandbox. Thankfully, and we were allowed to apply for the license shortly after we applied. We we earned the license. Thankfully. >> So what's next? What's goes on now? You do a lot of get a lot of work, A lot of coding. Gotta make sure the fintech compliance a lot of hurdles there. Yeah, I can understand that. What's now next? Got the regulation place? Yep. You'd expand. What's the plan? >> Well, we announced the license and Ah, a tte the same time, we also announced closing our seed round. So with that, we were able to grow our team the past month from, um, 8 to 9 people to 15 to 17 people now, and just more and more joining on board every day and are really our focus is growth. Now we're out of the sandbox. We don't have the limitations of the sandbox we had before, and we have banking relationships already made with different Banks s. So now we're just trying to reach out for the market. So we have grown our customer support team growing our engineering team hiring and comply a compliance officer, um, and other growth aspect. Just moving forward, >> getting up the basics of the business. That's right. What's your target audience gonna be? The inside solutions at first retail. What's the target audience? It's >> really both. It depends on what the market is providing. We've see institutional demand that has always relied on. When we spoke with institutions, they always relied on getting the license first because they don't want to operate with anyone unlike since, which makes it ah, you know, really interesting, because that means they haven't been able to get into the digital asset of crypto asset world the past few years while it's going up and down. So we we see ah, 50 50 divide most likely and what's going to be similar ratio than the rest of the world. But right now it's a lot of retail. Customers >> feel great to get your perspective here. It's even in the space. For a while, we saw the fire hype cycle go up, then the wet blanket Crypto Winter hit? Yeah, in the United States. Certainly it put a clamp down on most I CEOs. The SEC is right looking at a bunch of stars behavior, you know, Pretty Wild West is they call it, but an internationally still been pretty active even in the crypt A winter Go back, say 2018 Go back Last year on March it kind of stopped, got cold and then frosted over. Now it's been a block of ice. If you descript a winter, what's your take on it? What's the vibe? Internationally, I'll see Still money still flowing Bitcoins over 10,000 I think this morning, but still a lot of activity. Yes, some tokens have fallen away. Some are staying around. What's your assessment? >> So we've seen a lot of ah cycles. If you've been in this industry for 567 years, you'll see that we've had multiple of these winters, some of them lost, lasting longer than others on dhe. This late last one didn't didn't last as long as the one before. So what we really every time we see a ah boom, we have ah lot of media and a lot of people coming in brand new, trying to educate themselves about What is this? So we see just on everlasting cycle of just expansion on dhe. The price right now is not at the all time high, but it's still considered pretty significant at the beginning of the year was only about three or $4000. Right now it's about 10,000 and $100 for for a Bitcoin a cz with the eye CEOs. There have been a lot of concerns, rightfully so, because anyone can whip out a token and start selling it almost a security. But the central banker behind has a list of acceptable crypto assets that they will allow us to list. So right now we only have four crypto currencies are assets Bitcoin like coin ethereum and X R P. But nothing more than that at the time. And we hope to add more in the future. >> Ripples been taken some hits lately in the U. S. What about Eos and some of the other ones around the coin gets a corner, get some growth, you seeing some new things. How you guys gonna be evaluating some of these other new currencies? Is there a formula, you keep an eye on them. What's the consisted of concensus? What's that >> right? So we are agnostic to choosing the crypto asset that the color customers want to invest in it. If the central bank of behind accept this as secure liquid enough and, um, essentially time tested as well, For if it's been around for, let's say, 3 to 5 years with no network issues, then maybe retail customers can invest in it. But if it if it is just came up a brand new, we might come up. It's not time tested. Security wise, um, it hasn't gone through some certain pressures that are necessary for a network for payments are storing of value. >> So the central bank makes the decision on what they're gonna accept. What they >> listed in viable. That's right. But we we take customer input all the time. We started with just three, and then we had a lot of demand for exactly here in the region, and way listed it after getting improved. >> So we can't get Cube coin up there, can we? >> It defends the eyes that thinks he's coming. Okay, coming for two years in a row, knows >> what's coming. What's your final thoughts? The entrepreneurs out there because it's a lot of activity. This is one of those things where persistence really matters. No, your space Stay humble. Yeah, deal with these cycles because they are happening right? There is a There is a high velocity of cycles seasons, if you will, winter and summer. >> Well, I really think people should be should be more calculated to think long term with this technology. A lot of people are trying to make a quick buck or just make something, um, thinking that it's just a quick way to make money. But I really think people should educate themselves, both the entrepreneurs and the the retail investors that, uh, you know about the market about the technology so they can really see where the use cases might be of most need to the market. >> Talk about your, uh, your expansion plans. You have to to co founders in the US You're the co founders in Egypt. Is there gonna be a remote team? Is it going to be in by rain? What's the what's the hiring look like? Where's that where people will be located. >> So most of our if not all, of our customer support. Our client service agents are here in the in Bahrain. Um, we have the phone co founders now the to Joseph and a J from the Bay area there in behind as well here for the majority of the year there in the office. Now, um, the the engineering team, however, is a little scattered. Sometimes we we find we're security is a really high priority for us. It's the number one priority for us, as any Cryptocurrency exchange would be. So we re really scout talent and from the U. S. From Canada from other places around the world. Eso our engineering team is based in the Bay Area and other places in the U. S. Um, aside from Joseph, who leads it, who's the co founder here and behind. And the rest of the business and customer team is here behind. >> So really, the gating factor on hiring is making sure security's number one. So it's not so much. Get people filled in an office on the engineering front. >> No, it's definitely way. Look for high quality candidates, so that's our priority. We may be a small team, but they're all superstars. To be honest, >> what's been the biggest challenge that you guys have to overcome in this process because it's tough to get the license wasn't just being patient was. It's the diligence. What were some of the things that you overcame that were challenges? >> Well, it's it's definitely it definitely was a challenge to talk to. Ah, lot of regulators in the region. In general, Bahrain was by far the most cooperative. So right now the challenge is perhaps talking to other regulators when you talk expansion plans, we hoped we are serving the whole Middle East here from the from behind. But we'd idly, ideally want to also set up banking in Kuwait or youe or Saudi just so we can have better, quicker, on and off ramps for the customers. They're >> one of the big stories out. See Amazon Web service. It has a region here, um, pretty important. Pretty big deal. What's your take on what you think is gonna do for the region having a Amazon region multiple availability zones? What's that going to do for the entrepreneurship equation? >> I mean, it's fantastic. You see a lot of excitement here from entrepreneurs in the region and especially with regulation. How about having customer data stored here in the region? Um, it's really going to help. A lot of entrepreneurs also mitigate, You know, any downtime from hosting it in other places? >> New generation of entrepreneurship Hitting the scene here, isn't it? >> Yeah, it's really exciting. Lots of funding going around. Lots of ideas. Pretty really, really exciting for all entrepreneurs. >> Fail fast. As we always say, No one likes failure, but it takes Takes guts to start a company course. Of course. You know, thanks for coming. I appreciate it and say congratulations on your success. Thank you. Coverage Here we are in by rain for AWS summit. We're back with more after this short break.

(upbeat techno music) >> Live from Bahrain, it's theCUBE. Covering AWS Summit Bahrain. Brought to you by Amazon Web Services. >> Okay welcome back everyone, we are here in Bahrain for exclusive coverage for AWS Summit, part of Amazon's new region being launched here in the Middle East. I'm John Furrier, your host, we have two great guests from C5 Accelerator in Washington D.C., now kicking it out in Bahrain. Hadyah Fathalla, executive director C5 Accelerate and Eva Dimitriadis, good to see you again. >> Thank you. >> Chief operating officer. >> Great to be here. >> Guys, congratulations. Bahrain, D.C. >> The world. >> The world, it's global. >> Thank you, yeah. >> C5 Global. >> It's great to be here. >> It's an exciting time. I mean, I got to ask you Eva, because we had previously met, talked about interviews in D.C. Smart people that known Amazon, because Teresa and Andy Jassy and Jeff Bezos always say, "We're going to be misunderstood for a while." Come on, that's not true. (laughing) A region in this area is going to explode the entrepreneurial scene. What's your take? >> I think that's absolutely true. As we see today at the Summit, there's just such a growing number of entrepreneurs and people who are excited to embrace digital innovation. Three years ago I think the story would have been different but ever since we set up the accelerator here, which was the first once in Bahrain, we've just seen an explosion of interest and not just from Bahrain but from around the GCC. Even start ups from abroad coming and setting up here as their Middle East practice. >> Talk about C5 for a second. Let's take a minute, to explain what you guys do. I jumped ahead a little bit because I'm excited because I just love the entrepreneurial energy. This is a really important thing happening and you guys are playing a role. Talk about C5 Accelerate, what are you guys doin'? What's your business model? Just take a minute to explain as a set up. >> So I'll let Eva talk maybe more about our global operations but really C5 Accelerate a few years ago, branch the business which was largely an investment business, including innovation business and we built Bahrain's first and one the regions, in fact, first cloud enabled accelerators and Bahrain's very first technology accelerator and we did that in partnership with the Economic Development Board, the labor firm Tamkeen and obviously with AWS. Really we benefited from the first mover advantage and the thinking around that was that as Amazon grows it's geographic footprint there is great opportunity to build on the cloud in places like the Middle East where the ecosystem is nascent and there is an amazing first mover advantage. >> Yeah. >> So when we partnered with the government to build this, we realized as we do that, we also need to contribute to building a healthy ecosystem so we built this first accelerator and we have felt-- >> When was that, by the way? >> 2016. >> Great, thank you. >> Actually September marks our two year. We've since graduated five cohorts. We're gearing up for six and we have 34 start ups under our belt. Our first cohort was an all Bahraini cohort and today we're very proud to say that actually half of the start ups that have graduated from this program that is based out of Bahrain are international start ups. That's what we're doing locally. Maybe Eva can tell you a little bit more about what we're doing on a global scale. >> You know and that's important. I want to make sure you got that out about having a bunch of start ups under your belt because when I went to the start up Bahrain session yesterday I was really, really impressed by two things. One is, just the smart energy, the smart people who like understand entrepreneurship. Either went to school for it or have learned through the scar tissue of trial and tribulations like myself. And then the entrepreneurs were there themselves. >> Mm-hmm. >> And you know a healthy entrepreneurial community when they start bitchin' and moanin', they're all chirping away, they're hungry. There's a hungry appetite for entrepreneurship here and creating but it's not fake entrepreneurship. They're really hungry. They're, where's the cash? Where's the capital? So this is really a positive sign. >> It is and I want to add something really quick before Eva jumps in, I think in the past two years what's great about a small ecosystem and the ability to pivot and build fast is you actually see the impact that you can have as an individual and as a company and as a community really on the landscape. But also regionally we've had great collaborative efforts across the GCC and in the region with partners in Saudi and Kuwait and Egypt and in Jordan so I think there's a lot of momentum that we're riding on now, and I think it's a great time to be building in the tech space. >> Well Eva, before you get to your comments. I just want to follow up on the comment around Saudi and different regions because this is a trend that has been happening for a while in Silicon Valley, as you know. People have been leaving Silicon Valley, because it's cost to live there, but people have been putting engineering teams outside of Silicon Valley. I mean, 20 years ago, you only went outside of Silicon Valley or the US to outsource which is not really product development, it's just coding. Then the trend became real engineering and product development, real chops outside. We just had Abdul on from Saudi and he was talking about his shape of his team, the psychology, the make up of the people, it's just not in Saudi Arabia. It's in China, it's all over the world. As developers are working across the world, this is a really big deal. I mean this is the new dynamic. >> Yep. >> Diverse teams, geo located, no borders, this is going to change the political landscape. It's a cultural shift. >> Definitely, I mean I think it's a while before we have here the same secret sauce that exists in Silicon Valley or that has existed there for the past decade or so. But the emphasis on training and upscaling is huge and as we've heard a number of times today, there are so many incentives to do so for free so you can actually learn to code, you can become a certified AWS coder for free in Bahrain. Which is a phenomenal advantage and step up. I mean, no one would pay me to do that in the UK. I think that, along with a number of other initiatives are really going to leap frog the development here. And in terms of what you talk about, the sort of the landscape and geo location, it goes in so many different directions now. There's no single focus so we had a Swiss company last year come and incorporate in Bahrain, and hire developers here to grow their business. It can go in so many different directions. >> Yeah, the winner take all business model is an old business model and now it's everyone's winning so it's a little bit of flattening of the wealth and the opportunities but the pie is getting bigger. >> Yes. >> I think this is the dynamic that cloud and Amazon continues to demonstrate that the Oracles, for instance, of the world, we got to win it all, lock everyone in and we got to own it. That ethos is not, that dog's not hunting, as they say. This is changing the entrepreneurial landscape and the other thing I observe is the younger generation. Leveling up is very easy to them. It's like a video game, right? Leveling up is AI, blockchain, I think one of your companies I talked to, oh we're doing a blockchain implementation. They will eat up the cloud. >> Mm. >> I mean it's going to be like, pretty fast. >> You mentioned-- >> So I'm expecting some accelerated. >> Definitely. I mean you mentioned hungry but they're also fearless. The entrepreneurs that we work with have that perfect mix of a super smart idea and an understanding of a niche sector of the market but also this resilience and recklessness that you need to embrace the opportunity. And all the scary stuff that comes with it. >> And I think adding to that, I think what's great with Amazon coming to Bahrain, with us working across the globe, it's a cross pollination that happens because whether we like it or not, like Eva said, we are not Silicon Valley yet and maybe we don't aspire to be specifically Silicon Valley and we want to build our own unique ecosystem but the lessons learned from the likes of Silicon Valley and London and Singapore and China and everywhere else in the world. >> Yeah. >> Really helps build, not just the skills required but the grit that could otherwise be absent. >> The grit's key, yeah. >> And it can engender the kind of cultural shift that's necessary so you need, so you can develop these robust and resilient qualities that are necessary for a founder. >> Well, that's a really great point. I moved from the east coast in the US to California with my first start up because that's where the action was and I can tell ya, I've been there 20 years and I've been an entrepreneur doing things ever since. And there's a fallacy of trying to emulate Silicon Valley. Every i dotted, t crossed and trying to take the playbook. There's no direct match, however, there's some consistencies in there. That's grit, creativity, openness, capital markets and community and this is something that you guys kind of have in place. And then adapting that to your culture. Now I will say that my impression here is it feels a little bit Silicon Valley because it's a little bit more open and loose. People like to go fast. Fast and loose is the Silicon Valley way. Dubai's a little bit more like New York to me. So I can feel more, valley-like here. I'm not saying that Dubai's bad, I'm just saying it's different cultures. Bigger, its more ... >> There's definitely a lot of agility here. I think one of the other advantages which leads back into what C5 is as a whole, we're primarily an investment business. We have a venture capital fund based in the UK. What we're really looking for is investible, scalable business models where we're de risking the cost of capital with cloud computing because that is how ultimately these start ups scale. Another benefit that we really see in this market is value for money. If you're a start up in Silicon Valley and you get to the stage that some of our start ups get to when they finish their program, your valuation is pretty much always triple what we would see here, so valuation's a very sensitive subject. Our start ups hate talking about it. We structure our deals with them in a way that generally avoids having a valuation. >> It's very easy to do business here. You just keep on increasing the valuation, all the stars will come dropping to your doorstep. >> It's a nuanced area. >> Yeah. >> But that being said, you can get really good value for money businesses but more importantly you're investing in the teams and the entrepreneurs and there's no shortage of that here. >> Let's talk about the ecosystem here and then let's talk about the women in tech because one of the things that blew me away yesterday was Teresa Carlson held a women breakfast and for the first time I got kicked off a table because they wanted to make room for the workshop. >> Sorry about that. (laughing) >> I'm like, wait a minute. This is not an inclusive environment. Sorry, no, we need the table. Okay, I know, I was happy to tap out. But I wasn't expecting that and the energy and the, just really, again, this event, they had to lock the doors for the keynote so there's really a big interest across the board. Talk about the ecosystem and then the women in tech situation. >> So I think the ecosystem is an interesting question because, I mean, we work very collaboratively. Like I said, even though this initiative largely was kind of envisioned by the government and mainly by the Economic Development Board and I'm sure you got a chance to speak to Khalid Humaidan, he might have given you a bit of an idea of how this started off but really the EBD threw this idea of start up Bahrain to the community and said, "Look, you guys lead on it." And it took a little bit of time for the community to figure out what that really means and what it's going to look like but it really made the community and ourselves also think pragmatically about what we want this ecosystem to look like. So even though it's not as mature, like I said, as other ecosystems further away and especially in the west, it is coming together very nicely because it's coming together as a collaborative effort. You see a very good continuous consultative work between private sector, public sector, the start ups and then the other stakeholders, including ourselves, and academia. We still have a long way to go, I think specially in areas and this is something that I always emphasize, is to shift the culture you really need to start at a much younger age so at schools, at universities. We engage with them and are keen to do more on that front but I think we are laying the foundation for what I hope in the next five, 10 years will be a pretty competitive entrepreneurial and start up-- >> It might be sooner. >> Hopefully sooner. >> Yeah. >> I think we have the right recipe now to build a robust ecosystem. >> Yeah, I can say I can attest to that after what I saw yesterday. Your thoughts? >> Yeah I mean our team in Bahrain is 100% Bahraini. I'm based in London, but Hadyah here leads a phenomenal team who are all Bahraini citizens. Being the island that it is, we know everybody so Hadyah's done an excellent job of engaging with everyone from schools to universities to post grads to public sector, private sector. So really all the stakeholders in the ecosystem are engaged and everyone from the oil and gas industry to the finance sphere are thinking about how innovation can advance their businesses so that they don't get left behind at the train station. >> Yeah. >> It's really top of mind and top of agenda which is a very invigorating scenario. I think, going back to some of the initiatives, from bankruptcy laws to having a fintech bay with the Central Bank of Bahrain, there's just so much, like they're constantly pushing the envelope to make this a friendly environment for entrepreneurs to come and do business. >> And I want to add one thing. There's always this question of, does government have a role to drive innovation and create an ecosystem? >> They do. >> I think Bahrain is a good example for others in the region and even beyond to say actually government does have an important role. >> They do. >> If you look at Bahrain, it's government that has been very flexible and nimble in terms of moving to accommodate. Whether it's the new bankruptcy laws or allowing for the fintech sandbox and a cloud first policy and shaping the start up Bahrain. The government has taken the lead on a lot of these initiatives so it's a good example of how there can be a top down approach to building an entrepreneurial landscape but also where the bottom needs to come and meet the top so I think Bahrain a good example. >> Just to reiterate, my observation is that they know how to get things going and sponsor but they're also listening and self aware and even on theCUBE here, we heard comments like, we'll get out of the way. >> Mm-hmm. >> Now that's the difference between good judgment. >> Mm-hmm. >> You know? And, no, no I funded you, I own you, I mean I've seen that in the public sector or, we're going to fund you as an NGO and then I kind of own you so come to my receptions and be my show horse-- >> Mascot. >> Show all of my people how good I am, donating money. So there's a little bit of a balance between enabling. >> Yep. >> But at the end of the day, this is going to be a fast pace and that's where I think the speed, knowing when to get out of the way and letting the community go. I mean, people like speed here. Cars are driving fast, you got a Formula 1 race track up at 14 months. >> They like speed but sometimes things are surprisingly slow. >> Yes. >> So it's incredible that we are where we are. You asked about women in tech and I think there's something there that we're really proud of. C5 globally, 43% of the start up founders that we've supported through our accelerators are women. In terms of diversity, we're thrilled about that statistic. We'd like it be 50%. >> Yep. >> And I think that the Middle East, we're seeing so much hunger from women entrepreneurs and women who want to learn to code to be founders and we want to do everything in our power to enable that. >> Computer science degrees coming out of the university? >> Absolutely. Hadyah here had this fantastic idea a year ago to found what we call C5 Nebula. I'll let Hadyah talk about why we came up with that name and how it relates to our business but this is now a new stream of our business which really it's a membership platform where all women globally are invited to join and we provide education, upscaling, jogs, connectivity, mentorships and through this network we are allowing a complete globalization of the talent and skills that we have. >> Yeah. >> So you can be a student in D.C. wanting to come and volunteer to work for a company here and we will make that match happen. I think it's a very exciting phase for us and we've seen so much demand for this program. Maybe Hadyah can talk about why we came up with this name? >> Yeah, so like Eva said, we, I'm Bahraini, we've always had, we've been lucky to have been pioneering and have work very closely men and have had really equal opportunity but in industries like tech, globally, women's representation is lower than that of men and there are areas where there's still work to be done. >> A lot of work to be done, yeah. >> So last year, actually, with the first AWS Summit, when Teresa was out here, we figured we do a women in tech breakfast. When we were curating that guest list we couldn't find that many women and we didn't know if wasn't that we didn't know them or that they didn't exist and we realized really we need to put together something to bring all the women together and work more closely so we built Nebula, really to, like Eva said, do three things and a little more. One is the connectivity side of things and then the upscaling but also to raise awareness and appreciation. >> What is Nebula? >> What is? >> What is Nebula? >> So Nebula, scientifically it's an astrological, astronomical phenomenon-- >> But it's your network group, is that what it's called? >> It's a platform. >> Okay. >> So it's actually been officially launched three weeks ago, you can go online and visit it and it's a platform that allows you to become a member of Nebula and gives you access to mentorship, to opportunities to upscale and train but also to raise awareness and appreciation for the amazing opportunities for women in the tech space. >> Is there a URL? >> There is a URL, it's-- >> We've been debating what is is today. (laughing) >> It's www.c5nebula.com. >> Okay, I'll put it up, publish it with the video. >> And what it means, it's the Latin word for cloud and it's where stars are born. >> Yeah. It's also, what's important, is it's a compilation of a bunch of different clouds and electrons and it's a mess, it's a bit of a mess but it's a lot of forces working together and I guess the moral of the story is, we can create stars in the space but we all have to work together and it all has to come together to-- >> And it's powerful when you work together. >> Only 10% of VC funding worldwide goes to women founder companies and 1% of that goes to women of color so there's some staggering statistics there. Globally, this is not a Middle East problem, this is globally a real big area of disparity that we're trying to help address. >> Well you guys know our door's open in California and Boston, and certainly the women in tech, we got a big network, we can merge them into the Nebula connect our networks. >> We would love that. >> We would love that. >> We're open and anything you guys have to share with us we love co-creating with the communities, that's what we do at theCUBE. Thanks for coming on and sharing. >> Thanks for having us. >> Thank you, John. It's been a pleasure. >> You got a great mission. Big supporter. C5 Accelerate, they're the ones on the ground, making things happen, gettin' those sparks of entrepreneurship and helping them capture them into one community, create some energy and some momentum and help people create value and also capture the value, that's what it's all about here. You got Amazon Web Services' region in the Middle East, CUBE coverage continues after this short break. (upbeat techno music)

(electronic music) >> Live from Toronto, Canada it's The Cube covering Blockchain Futurist Conference 2018. Brought to you by The Cube. >> Hello everyone, welcome back to The Cube live coverage here in Toronto, Canada Ontario for Untraceable presents Blockchain Futurist Conference. Two days we've been here. We're on day two, amazing event here, great community, I'm John Furrier your host. Dave Vellante went back east so he was here yesterday. Our next guest Pablo Gonzales is the Founder and CEO of Genesis Blockchain Technologies, welcome to The Cube thanks for joining me. >> Thank you for having me. >> So I'm glad to have you on. First of all when Bradley Rodder says oh watch out for that guy, you must be smart because we trust Bradley so but you're doing something really cool. The future of trading and exchanges has been a topic that everyone's been talking about but not a lot of people have been actually moving the needle on. You've got some movement here, people doing here but no one's actually had the full package and they're running as fast as they can to do it. You guys have done it. >> We have. >> How? Take a minute, what have you guys done? What is the product? How did you guys do it and what can people use today? >> Thank you. So it's no longer hot air, as you said. A lot of people are saying what they're going to do. We're here to say what we have done which is very different. Yesterday up at the main stage we launched the world's first decentralized exchange on a mobile platform. We're fully licensed by the Costa Rican Commodities Exchange, we have brokerage license, a currency exchange license and a money remittance license. We already possess the licenses, we're not in pursuit of the licenses we have them. What we did obviously we pursued an MNA strategy, we acquired companies that were over a decade in the business and we just transformed them and cryptomized them, as I use the term and launched the exchange with those licenses and platforms. We listed the exchange with over 40 coins. Over four billion dollars of shared market cap and over half a million dollars of daily trading and liquidity. >> So this is right now going on in Costa Rica, mainly if stable. Is it stable? How's the stability there? >> So Costa Rica is extremely stable, they haven't had an army for over 50 years, it's considered a world-class country for banking, for international businesses so much so. Amazon, HP, Intel, all these humongous companies have large operations in the country. >> And their posture to crypto is they've come out formally. >> Yes. >> To state well what's the posture from Costa Rica? >> So they consider cryptocurrencies a commodity and not a security and that's why went on to pursue a commodities exchange license. >> So that opens up doors for you to do this. >> Of course it opens up the doors, think about it. So you can now trade Bitcoin with gold. In our exchange, not as of today we're going to launch that in January, so now you can trade cryptocurrencies with commodities and cryptocurrencies with fiat currencies. >> So I'm just kind of speculating here in terms of my mind where I'm going with this. Almost imagine the shakeup that's coming. It's like a blender, we trading gold and Bitcoin it's just like who would have thought that was possible a year ago? >> That's correct. >> They've been compared, people compare Bitcoin to new digital gold but actually comparing them this is going to shakeup like a blender. >> That's correct. >> Blend up the commodities market. >> Disrupt it. >> What's your vision? What do you see happening? >> I just think that a lot of people are focusing on they say on one of the interviews earlier today, one of the interviewers was asking me is that Bitcoin to the moon? I'm like guys we need to stop. If we want this industry to really grow and develop stop using those analogies. We need to create a community that's larger, we need mass adoption and I think by including the commodities into the equation you're catering to the traditional investors that are a little bit uncomfortable with cryptocurrencies because they don't know about them but they know about gold and then all of a sudden now you compare gold with Bitcoin. >> It brings retail into it. >> Yes. >> It brings a real retail market. >> That's correct. >> You know I just want to say something. I agree with you 100%. These news outlets out there, these other people they tend to focus on the price of Bitcoin and it's almost like okay can we get over that? Yes it's going to go up and down, if you're in the long game it should be 20,000. Okay we can buy that but let's talk about what people are doing. Who's building something? >> Yes. >> That's the focus. So if I ask you now that question, hey Pablo what have you built and what you you going to continue to build if this is a foundational product, what are you guys going to do on top of it? What's the build plan? >> Thank you. So yesterday we launched the decentralized exchange with 40 coins. We're going to add probably between now and December another 110 different tokens. We're doing 20 for now and in January we're launching a centralized exchange so that's where we're going to add the fiat currencies and the commodities. >> What date again? >> End of January. >> Okay got it. >> Then we're going to make an announcement in November at one of the conferences in Malta and so we're reserving the date and everything else for that but in May of next year we're launching over the counter trading desk with full KYC AML you know counter terrorism financing, all of the world class policies and by this time next year we're going to be launching our institutional platform. So we want to be a one stop shop via the currency exchange that we own. We already have the ability from the Central Bank of Costa Rica which is amazing to issue Visa cards. So now our users, besides trading, they can take their crypto with them from their mobile phone, convert it to fiat and pay, you know, for gasoline, buy groceries. >> So I'm an entrepreneur, I got my own cube coin coming out, cube token, security token or utility, what's in it for me? If I asked you Pablo what's in it for me? What do I get out of it as a business? Are people going to start trading my coins? Am I instantly going to have an over the counter so as a business what do I have to worry about? What's the benefit? What matters to me? What's the impact? >> So if you were to be a coin to list on our exchange you mean? Well first of all we all know exchanges now to list on them you know they're changing, some of them I'm not going to say the name. >> They're charging a lot of money. >> Yeah 400 BTC and crazy amounts like this. We are going to charge. It's a business at the end of the day but what we're looking for with the coins that we're going to list is partnerships and seeing what ways we can do more entrepreneurial projects to change the landscape of the industry together as an exchange and a coin because potentially what a coin is is a company. You know what's behind the coin is what's important to us and not the coin itself. As the company develops and progresses so will the coin's price appreciated value or depreciated value and so yes, besides facilitating trading fees and lowering that, up listing and so forth what we're bringing to the table wants to be much more dynamic. >> You got to balance you know business that you got to do with infrastructure build out. It's like the old telecom days you got to build some cell towers before you roll out mobile. You got to build this entire retail global fabric. >> Yes. How does community play in for it? Obviously community is very important. I agree with you that's big time. How are you guys building your community? Tapping into anything else? Obviously Untraceable has got a great community. How are you going to grow your community. >> So as an exchange there could be a conflict of interest we have to be really careful how we get involved in the community but what we want to do is by selected partnerships with projects and coins. The coins are already doing their work. They are appealing to a community. They are raising the money from that community what we want to do is we want to partner up with those coins, the coins that are worth partnering up with and that way our reach automatically will multiply. On top of that of course we want to work with government and banks and institutions. We believe, it may not be popular what I'm about to say, you know the good old honor kids that came to the hardcore crypto, forget about central banks and centralization, I don't think that that's ever going to happen. I think the more we cooperate with government, that the more we work with them, we together can shape the industry and the landscape for good. I do believe in that. It's a collaboration and cooperation with governments and banks to us is pivotal. >> I mean you can be a coach to the regulatory. >> Absolutely. >> You can be an advocate and partner. >> We are being. >> And not an enemy. >> In Costa Rica, so before they considered and they took a position on whether is was a commodity or not you know they approached us and we were teaching them so much so that a congressman that was going to be at the conference and couldn't make it, he's the founder of the Libertarian movement in Costa Rica he created a think tank of crypto because of us that now has Latin America reach. Think about it, there are 1.3 billion people in Latin America. >> They have mobile phones. >> Exactly. That can now learn about crypto and so we're going to capitalize on this. >> It's a real democratization, what you do is change a society. If you continue to get this right this is really key. Congratulations. Now I want to ask you personal questions so I love the hat, you look great. >> Thank you. >> How did you get here? Were you scratching an itch that was around this? Was it, how did you get to the point where you said hey I'm going to go out and build the first exchange. I'm going to roll up the companies, wire them together, cryptotize them and go nuts and build an exchange. I mean how did you get here? What's the story? >> Thank you well, it's a story. I began entrepreneurial projects over 10 years ago, been in the private sector, because Costa Rica is a services company we put together a call center. Took it from like four people to 4000 people in four years. I went on to like building my own sports brand in over 10 countries but then about two years ago a few companies from Canada they called me from here, they called me to help them go public in the Canadian Securities Exchange. I took two companies public last year and after that I was saying to myself and the crew guys what do we do next? How can we really disrupt the industry? And one of the things we were talking about was man, we're in a decentralized community that brags about decentralization, trading and centralized exchanges. How ironic is that? >> Yeah it's got to change. >> So we said you know what let's be the pioneers, let's head out on a quest to build the world's first mobile decentralized exchange and we achieved that. It's unbelievable. Now you hear all the big guys, the whales talking about we're going to come up with a decentralized exchange because that's what people want at the end of the day and we were able to be the first ones ever to give that. >> And stability is critical. I mean I was just at a bank starting up a new account for a new startup that we're doing and they're like is this a blockchain company? I'm like no, no God no, no, no we're a media business. >> Those are bad guys. >> So you can't even open a bank account some places. So this has really got to get fixed and I got liquid, I got fiat currency, I got to make movements around. The retail market, whether it's trading, investing, it's got to be converted over to the new world. >> Yes, yes. >> I mean it's almost like a full changeover. >> That's correct. Obviously I think that it'll be a transition process. It'll take some time. There are some banks that already getting more involved into the process. What's interesting in our case is we even got the Costa Rican Central Bank to be our bank. Think about it, we're not banking with any private bank or public bank but the Costa Rican Central Bank and I think that more and more banks will follow suit as they see good use cases. The ICO craze of last year, I don't think that it did any good to the greater good of the community. If anything it brought a lot of prejudice. >> It's a black eye. They'll be a hangover on that but that's like the dotcom bubble. All those things on the dotcom bubble actually happened so I think you're going to just see get that jested out of the system. >> Inevitable. >> And focus on quality. That's what happening now. >> Inevitable. >> Pablo thanks for coming on. Pablo Gonzales who is the Founder and CEO of Genesis Blockchain Technologies. First ever exchange bringing all new magic to the marketplace. This is The Cube bringing you the content magic here in Toronto, Canada. I'll be right back with more. Stay with us. Live coverage after this short break. (electronic music)

(upbeat music) >> Live from Toronto, Canada, it's theCUBE. Covering Global Cloud and Blockchain Summit 2018. Brought to you by theCUBE. >> Hello everyone and welcome back to theCUBE's live coverage in Toronto for the Blockchain Cloud Summit, part of the Blockchain Futurist event happening tomorrow and Thursday here in Toronto. I'm John Furrier with Dave Vellante. We're here with Gabriel Abed who's the founder of Bitt and also the Digital Asset Fund. Great story he's been there from the beginning. President at creation in the movement that's now changing the world. Blockchain and cryptocurrency certainly. Infrastructure and token economics, changing how things are doing. And rolling out, reimagining everything from infrastructure to value exchanges. Gabriel welcome to theCUBE. >> Thank you it's great to be here. >> So we were just talking on camera, you like to go after the big changes. You're an entrepreneur, you have that fire in your belly. You've been very successful. Where are we? I mean, you've been part of the movement, we're now on the cusp of mainstream adoption, there's still work to do. >> Oh, plenty of work. Lots of infrastructure still to build, many regulators and legislators still to educate, lots of laws still to be amended and changed. And, at the end of the day, it's happening and it's happening quickly and beautifully right now. The entire industry is changing. >> One of the things that you've done, you've taken on some big projects and you've made change happen. Regulation is one of the hottest topics we're hearing certainly in the United States, it affects innovation and there's so much entrepreneurial activity happening right now. There's so many entrepreneurs, alpha entrepreneurs really want to do great things, and regulation is just a blocker. It's an antibody for innovation. And you've busted through that. And it's probably going to continue. The old guard is either going to be replaced or adapting to the technology. You've done that, and a lot of people want to do what you've done. What's the secret? What's the secret of your success? How have you taken on these big, incumbent positions and taken them over >> But you're not running from regulators, you're embracing them. >> No, no, I think regulators are important to a responsible and sophisticated market. When my partner and I started Bitt in 2013, 2014, we immediately realized that if we wanted to build a product for the monetary authorities around the world, we needed to have the buy-in from the regulators. So from day one we were regulator-friendly. And it's not to say that we don't believe in a decentralized future, I'm as big of an advocate for decentralization and the freedom of information as anyone else, but I'm also a big believer in if you're a product for a market in the traditional world you have to involve the regulators in order to ensure that product does its job, keeps the consumers safe, and ensures that the economy around it doesn't collapse. So regulators are critical in this field. >> Talk about what you guys have done. Take a minute to explain the project you did, how it worked out, the tenacity, but also, what was the outcome? What were you trying to do in the project and where is it right now? >> It depends on the project you're referring to >> Maybe start at the beginning >> The Caribbean >> Let's start at the beginning. >> Yeah, yeah. >> Okay, so, Gabriel Abed, born, raised, educated in Barbados, around the age of 19, I decided I was going to take my computer science education a bit further. I went to Canada, I did a Bachelor of IT, where I majored in network security. In Ontario, the University of Ontario. And, unlike the rest of of my peers, who usually stay in Canada, I decided to go back to my little nation with the education that I had just received. And I took that education home, and started one of the world's first blockchain companies, but at the time I didn't understand blockchain per se, I understood it as a commodity, as a cool investment, I didn't understand the true nature behind the protocol itself. It was only until 2013 that my partner and I ran one of the larger mining operations in the world, that we realized a commodity was actually a protocol. A network tool. A system that you could build on top of. So in 2014, we actually created one of the world's first blockchain assets, on Bitcoin's blockchain. And that a representation of a digital dollar for a central bank. And the notion behind Bitt.com in 2014 was, let's compete with cash, because it's inefficient, it's costly, and it slows down the movement of society. So what we wanted to do is create a digital version of that, that would save economies hundreds of millions of dollars. Cash is expensive to to create, that linen, plastic, paper money, it's easily forged, it can be counterfeited, it's hard to transport, it has an expense to transport, it has an expense to count, it has an expense to secure, and then it has overheads around the entire ecosystem of accountability. Whereas, a blockchain-based digital dollar eliminates all of those efficiencies, and increases the ability for a monetary authority to trace, track, and have a better form of anti-money laundering, counter-terrorism financing and a better overview of their entire society. So that all, we took that notion, went to the central bank of Barbados, who at the time was being led by Dr. DeLisle Worrell, and our very first meeting he had asked me to excuse his office. And 13 meetings later, and a whole two years, lots of development, building out infrastructure around compliance, around finance, around security, and around regulation, we finally got the nod of approval from Dr. DeLisle Worrell to operate a fiat example of a digital dollar in Barbados. And since then, we have been working with several central banks around the world, bitt.com today is the leading central bank provider for digital dollars. A lot has changed, I've developed other tools since, and other businesses, but bitt.com continues to be the best friend for central banks looking to move and transition into the digital arena. >> Why, I mean other than a closed mindset, why wouldn't every government around the world want to move in this direction? Initiate some kind of FedCoin, for example. >> Education, education, it's the fear that the system may not be scalable, it's the fear that the system could be hacked, it's the fear that they could be cut out, their control, at the end of the day, monetary authorities, like the Federal Reserve, they have a control on the money supply. Whereas, something like decentralized cryptographic currencies, there is nobody in control of the money supply. Hence, inflation versus deflation systems. Then there's the issue of hacking and the threat of digital and cybersecurity. Typically, the head of these monetary authorities are older gentlemen who are traditionally conservative. And who are not (mumbles) with cybersecurity. So the fear of hacking is very real for someone like them, whereas someone like me who is trained as a network security expert, those fears can be mitigated with good policy and procedure, cold wallets, and the right process, to ensuring the environment can run without the risk or the fear of malicious attacks. So it really boils down to education. The educated governors of central banks, like there's one, for example, Timothy Antoine. Dr. Antoine is the governor of the Eastern Caribbean Central Bank. And they govern and mandate the currency union of eight islands below them. St. Lucia, Grenada, Antigua, et cetera. Now, he's a governor that gets this and has wrapped his head around it, and understands that this is the future. He gets it so much that he signed an agreement with bitt.com to begin exploring a pilot for his currency union to have a digital dollar implemented in it. You also have governors and presidents like that of Curacao. Or the central bank of Curacao, where we've just signed an agreement to move forward with a phase of looking at the implications of rolling out a digital dollar in a society like Curacao and St. Maarten. What is the ramifications? What is the feasibility study behind that? So, to answer your question, it's not every single regulator, governor, and central bank manager is going to head toward this technology tomorrow. But with more education, and more lobbying, you will see more and more central bank governors moving in this direction, because it's better, cheaper, faster, makes their job easier, gives them more control, gives them more oversight, and provides all the things that they would want as a central bank to continue to do their job for their society. Which is to protect their dollar from alien threats. And to ensure that the dollar remains stable, and to just generally ensure that the society is functioning the way it should. >> Gabriel, what's your vision on what this will enable for the citizens? What's the impact that you see happening? If this continues down the trajectory, what is the adoption look like, impact to people's lives on a everyday basis. >> Well, for a very starting point, you democratize payment. Right now, if I want to make a payment, I have to go through a utility company called a bank. And this bank typically has frictional costs, and frictional overheads and time. That's one of the biggest problems, is that these monopolistic infrastructures hinder the ability for the average participation of a free-flowing payment system. So what you end up having is rather than me being able to make a digital payment in seconds, with no cost, I have to wait days, I have to use manual-based systems whether it's check, cash or the bank's Visa Mastercard system. And then it has frictional costs. So right off the bat, you democratize payment. What does that do for a society in a developing nation? It empowers people. And you're empowered because now as a developer, I can build on this payment system. As an entrepreneur, I can tap in to this payment system. As a merchant, I can utilize this low-cost payment system. As a society, I now have GDP growth because of financial inclusion. The underbanked, who do not have access to banking facilities for one reason or another, maybe they don't like the bank, maybe the banks don't like them. Maybe they don't have two proofs of ID. Maybe they don't have a fixed place of abode. Maybe they don't have the minimum deposit amount. All of these features keep the poor and the underbanked out of the system. Whereas, in developed nations, we have mobile penetration rates that are through the roof. In some cases, like Barbados, over 100 percent. So if you have 100 percent penetration rate of this mobile platform, this thing in my pocket, but I cannot access the banking system, well flip that around, democratize the payment system, allow payments to exist on this mobile phone, and watch how quickly society becomes banked. So what you end up having is full adoption. Why would we not have full adoption when it's cheaper, it's faster, it's more inclusive. >> And the data from that collective intelligence only creates a digital nation >> A more responsible environment. >> Wealth creation environment. >> It creates a more traced, tracked, and accountable society so that the monetary authorities in the government can now start making educated decisions on data. They now know who's buying milk, who's gambling, who's paying their taxes and who's not. >> The downstream benefits of this are massive. >> The downstream benefits are massive, enormous. They're disruptive. This is a brand new fiscal tool, a monetary tool, being given to central banks to start eroding the field of private e-money systems, and to start bringing about a uniform standard towards payments. Plain and simple. We're going to the central banks and introducing a new monetary instrument, that they're in control of. That now the commercial banks, the financial institutions, the corporatocracies, the citizens, and the merchants can all fall under one roof issued by their monetary authority. And this is not a cell phone company or a bank building their own private system that I have to jump through some hoops and some red tape and sign away my first born and give away my left arm to enter. This is a free and open source standard system. >> And it's networked, as you said, penetration is 100 percent on mobile or roughly that, it's a network society that now has digital fabric built into it. This is the future. >> But I played this out in terms of, when you talked about this in your panel, now every device, every thing, every physical asset will be instrumented. >> Yes. >> And as a result, theory can be coconuts. >> You're building the deep infrastructure. I remember we met with World Bank back in 2014 and they coined this term for me. Because they were saying we want to help entrepreneurs and it's important to help entrepreneurs in developing nations because they're the lifeblood of it. But what we are building is the deep infrastructure. And that's exactly what it is. It's the infrastructure that would allow the entrepreneur and the developer to now have a framework that they can build against to provide more uplift. So in essence, it's really going to be exponential growth once systems like this are implemented. The stock market can move digital, and people could buy stocks using digital dollars. E-commerce can occur because I can now buy things online or sell things online with digital dollars. I can now be part of a global, financial ecosystem, with my smartphone and my wallet. >> That's a great use case, congratulations on amazing success, so much is on your plate, you've had great success in this new era, what's on your plate now, what are you working on, what's happening in your world now? >> So in 2017, we realized Bitt was entering a new growth phase. It was no longer a battle of trying to convince regulators and central banks, our product had been proven. Our reputation had been proven. It was time now to scale the company into a professional level of dealing with these regulators around the world. At the end of the day, we would like to digitize cash, wherever cash exists. And to provide those tools for central banks around the world. That would require professional management, and that is not I. >> (laughs) >> So, our investors and shareholders were quite comfortable with our proposal of bringing on that professional management, so in 2017 I resigned as CEO, retained a board position and still single largest shareholder, but with the idea of what other types of infrastructure can I build, now that a deep infrastructure had been put in place. So I've been attacking three major markets, the banking sector, an actual commercial banking enterprise working with a group from the United States towards looking at deploying the future of where we think commercial banking is going. I think that the community, the crypto community in general, there's a lot of noise happening in the chats. And therefore we built a machine learning chat bot to start looking at market sentiments and aggregating market information and of course building common tools for community members. So we've launched a agent called Gabby, the form to gab. My name's Gabriel and my mom calls me Gabby, so it works out quite well. >> You have the gift of gab that's for sure. >> And then I launched a mutual fund with a very sophisticated former managing director of JPMorgan. A guy named Richard Galvin. And we launched the world's first protocol-only fund. We focus only on protocols. And that's called Digital Asset Fund. And we launched that in late 2017 and got full regulatory approval to become a professional fund, that handles 100 percent, solely crypto. And that's basically been my ride, and then outside of that, just your standard consulting, because everybody from World Bank, to IADB, to some government agency to some private organization wants to know about blockchain they want advice, and they need a team of people to give them that advice. So it's just been, all around, looking at how I can be an entrepreneur in this space, while finding great leaders, and partnering with those leaders to build out great companies. While still focusing on ensuring bitt.com becomes the solution for dollars, digital dollars, worldwide. >> Got a great mission, entrepreneur, builder, congratulations. >> Thank you. >> Industry's lucky to have you, congratulations. >> Thanks for coming on. >> Thanks for coming on theCUBE. >> Thank you guys. >> CUBE coverage here, live in Toronto for the first Global Cloud and Blockchain Summit in concert with the Blockchain Futures Conference happening in the next two days after today. More coverage from theCUBE we're live here, stay with us for more great coverage after this short break. (upbeat electronic music)

>> Announcer: Live from Las Vegas, it's The Cube covering IBM Think 2018. Brought to you by IBM. >> Hello and welcome to The Cube here in IBM Think 2018, I'm John Furrier. It's The Cube, our flagship program, we go out to the events and extract the signal in the noise. We're the number one live event coverage. We're here with The Cube with IBM Think 2018. Our next guess is Jesse Lund who's the vice president of IBM Blockchain. He's in the financial services side. Into blockchain, into crypto, into token economics, seeing the future, how money flows, Jesse great to have you on The Cube, thanks for joining me. >> Yeah, thanks for having me. It's great to be here. >> We were talking before on camera about blockchain, and we love blockchain, IBM certainly put it out there as part of the innovation sandwich. Blockchain, data, AI, kind of making that innovation, but it's really what it enables, and I want to talk to you about. You are involved in payments. We've been saying on The Cube that the killer app is money in this market. >> I agree, yeah. >> You agree, and you talk about it. This is a new market, so a stack is kind of developing. You got blockchain, then you got crypto which as protocols and you got infrastructure, then you got decentralized applications which you could call ICOs up top, certainly a little bit scammy and bubbly, but that's as arbitraging and optimizing the capital markets, you could argue that. But so this is a really big dynamic. Your thoughts on this trend. >> Sure, well so I joined IBM from 18 years at Wells Fargo. I spent really the majority of my career in financial services and when blockchain came along, I sort of immediately saw the impact, the potential for, I'll call it positive disruption, disruption in the positive sense. Transformational paradigm shift kind of stuff in terms of how money moves around the world and how we classify assets and how we transfer ownership of assets, I mean that's just, it's, the possibilities are limitless. And you're right, IBM is the place where I think blockchain has started as a mainstream focus for enterprises around building private networks, but that's really just the beginning. What we talked about earlier was it gets really interesting when data and money are connected together and they move at high velocities together. >> Let's get into that. I mean first let's just address the IBM thing. They got to put a stake in the ground, blockchain, it's a safe harbor to say supply chain stuff because that's their business, they've been building technologies for supply chains for companies, that's what enterprises do, that's IBM. But the game is where the money is and that's where the businesses are going to be transformed. We're talking about disrupting structural industries. This is where the money power comes in. Money's flowing, I mean if you want to move money from China, go to bitcoin. If you want to move it from anywhere, this is what's happening. >> Yeah, so think about bitcoin. It's kind of what started it all. It's a little bit of a bad word in banks and in regulated financial circles, but let's face it, the only real mainstream blockchain application today is still bitcoin, but you know we're only three years in to the blockchain industry, right? I mean think about when we were three years in to the internet industry, where we were still talking about which browser is going to win and then it went on to which application server's going to win, and it wasn't til a decade later we were really focused on what are the applications, the killer apps that are enabled by an interconnected world and that's exactly what's happening now. Other industries have already been completely disrupted. Look at retail, it's just, it's banking's turn. It's financial services turn. >> One of the founders, the co-founders of Ethereum, Anthony Diiorio, who I interviewed a couple weeks ago at the Bahamas, he said "While it is the new browser," to your points, browser wars, if you think about the payment, wallets are now becoming part of the mechanism for money transfer. If you don't have a wallet, if you want to send me some Ripple, you want to send me some Ethereum, I need a wallet. This is a no brainer, right? I mean if you want to leverage any money, that's one thing. The second thing I want to get your thoughts on besides the wallets, the fiat conversion, right? These are two threshold conversations that are going on. Your thoughts, wallet and conversion to fiat. >> Well I mean I think wallets are really important because this whole thing is based on key management, this whole concept is based on cryptography. It only works on a public, private key notion and you got to keep that private key private, but you got to keep it, right? You got to keep it safe and you got to keep it, it's like your wallet. You've got a wallet, you've got cash in your wallet, you lose your wallet, you lose your cash. It's the same kind of analogy, so wallets are really important and you're going to want to turn to providers who have made their business in encryption, who have made their business in security, I mean-- >> And cold storage, old school is kind of coming back, people are taking their keys and they're spreading them across multiple lock boxes, multiple states. People are getting broken into their house or their PCs are getting broken into. >> Right, yeah. >> I mean security, going old school. >> And why not? I mean, it works. >> Because if someone knows you got 100 million dollars in your house, they're going to get it if you don't lock it. Okay back to the reality of the money transfer. We were talking before you came on, I've been saying on The Cube, token economics really is where the action is, at least in my opinion. I want to get your thoughts because really the business model innovation is on the table because whoever can innovate the business model has more of a chance to disrupt an existing industry. This is where tokenization becomes part of the money piece of it, so how do you convert that value into capture? Is that token? Is that where you see it? What's your thoughts? >> Yeah so well first of all, I mean if you think of tokens as another form of currency, and by the way, I think we have to be careful about what we say, cryptocurrencies, the industry talks about thousands of cryptocurrencies out there where there's really not. There's maybe dozens and they're all derivatives of just a few models, bitcoin being one prominent model and there's a lot of offshoots off of that. But the rest of what we call cryptocurrencies are really tokens that represent primarily securities, which is why the SCC's getting involved. But the really interesting thing about this is these tokens move at high velocity because they're digital and so, but these digital things represent a claim on real world value, and that's where it becomes really interesting. IBM's built and launched as kind of its first foray into the solution space of financial services where IBM is an investor in this technology, a cross-border payment solution that inherently re-engineers this whole correspondent banking, this international wire process, and where FX, foreign exchange, becomes a real time capability in a series of operations that execute as an atomic unit. That's novel today. When you want to send money from here to somewhere else in the world, you go to your bank, your bank sends an instruction to another bank, and they respond and say "Yeah you know it's okay "because the person you're sending it to is not a terrorist, "is not on a some sort of sanctions list," great, now the bank has to actually go settle and it settles through another network, so the novelty is why can't the messages and the data and the value itself, the digital asset, why can't they exist and move together at the same time? That's what we've really built. But as we've built and deployed that and are getting banks and non-bank financial institutions to sign up for it because the cost of moving money goes way, way, way down and the user experience goes way, way, way up because instead of taking two or three days and you don't know how much it's going to cost until it gets there, it takes 10 or 15 seconds and you know before you even press send how much it's going to cost to get there. It all boils down to this notion of digital assets, that's what it all comes down to, is the way to settle value with finality in real time is for one party to exchange a digital asset with another party. Today, initially, the only form of negotiable digital assets are cryptocurrencies which has banks a little scared, but as we start talking through what we've learned in the enterprise blockchain space, we realized that we can tokenize all sorts of other asset classes, commodities, securities, and even fiat currencies where central banks or commercial banks can issue a token that represents a claim on deposits held at some financial institution and that's, that's a-- >> So you see tokenization as a big deal. >> It's a huge deal. I mean it's everything, I think it's-- >> It's the economic value of the ... >> I think it's the tipping point for blockchain. The irony is it goes back to bitcoin kind of started this all. You know we said "Well we like the idea of the technology "underneath bitcoin, but we want to focus on blockchain," I mean forget for a second blockchain is actually terminology that's invented by the bitcoin primer that was published nine years ago by Satoshi, so yeah it's their, whoever they are, it's their terminology, and it's kind of coming back full circle where you're seeing the convergence of all of these cool optimization capabilities, you know, immutability and workflow optimization, supply chain management-- >> And there's a lot of work to be done on performance and whatnot, but the concept of decentralized immutability data is fine, store the data. Now there's, it's got to get fixed, but I think that what that enables and I think you agree that tokenization's critical. So for a company that wants to token their business or raise money via tokens or get involved in this new economic value creation, innovation trend, how do they do it? And by the way are there tools available? You mentioned banking, and the banking business got to where it was because you had to build the picks and shovels to make it happen, you had to do a swift and you had to have this stuff go on. Now developers don't necessarily have the tools, so there's a picks and shovel market and there's also the real innovation. >> Yeah and that's I think the value contribution that IBM brings. I mean we bring 107 years of credibility in developing and operating mission critical, transactional, and financial systems, and I could do just an ad for a second, that's what the IBM blockchain platform is all about and as the industry evolves, as our platform offering evolves, what we want to be able to bring to small business, medium sized businesses, large businesses is the ability to develop solutions using our toolkit. >> So Jesse I want you to put your financial hat on and at the same time put your payments hat on and your token economics hat on, three hats. Hey I want to tokenize my business, I really want to get in. So we have an innovative team, we're seeing new business model formulas and logic that we want to disrupt, what do I do? I got an existing, growing business that I know has assets and I'm not a startup, but I'm not trying to pivot like Kodak, so I'm not dying, throwing the hail Mary, or I'm not a startup and got to build a whole product. I'm a real business, I'm growing, and I see tokenization as a way for me to be successful. What do I do? What's your advice? >> Well I think you look at it from all potential angles. If you look at any business, they're always looking to improve the bottom line by shrinking costs, right? They're also looking to improve the bottom line by increasing the top side, increasing revenue, and I think as a mid-sized business or a growing business, you have the opportunity to use tokenization, to use blockchain and digital currencies to do both of those things. You have the ability to accelerate the adoption of whatever your good or service or product is by if it's tokenizable, and most things are whether it's a utility, access to some service you provide, or whether it's an asset, some widget that you sell, you enable primary and secondary markets by creating a digital asset that can be bought by anybody anywhere around the world. I mean that's one way to do it and so I think getting people to realize the potential there-- >> You got programs, they call up IBM or get some developers, make it happen. Okay so killer apps money, that's going to be a 30 plus year trend and certainly this highlights that, but the other thing that's happened, it's coming out of either, in the open source community as well as cloud, the notion of marketplaces and communities so marketplaces and communities become a very important role in the token economics piece. What's your thoughts and opinion on that narrative? >> Well again for me, it goes back, I always go back to digital assets. We in the U.S. and around the world, when we start talking about financial instruments, we classify assets differently, but when it comes to an ecosystem and a community that becomes inherently peer to peer and inherently democratic, it's about an asset class agnostic distributed exchange where I can sell you my security token in exchange for your fiat token, or I can sell you my commodity token or utility token for the same. I think the ecosystem gets built automatically by way of new assets coming to a common network or interoperable set of networks, and that's what's missing today by the way, same in capital markets, right? The holy grail in the capital market space today is how do I shrink the time between trade and settlement? There's this whole t plus three and we're spending billions of dollars to go to t plus two, we gain a day, so the trade day and the settlement date are two days apart. I mean you just think about kind of the absurdity of that. If you just say well if the security that you're buying is a digital asset, and the money that you're buying it with is a digital asset, and they both exist on either the same network or an interoperable network, the transfer of ownership and the transfer of value happen together as two operations or a single operation in one atomic transaction, you've solved the problem. >> Speed of light can make it happen. >> Right, delivery versus payment, that's what the capital markets industry is trying to optimize for, right? Because it improves the balance sheet of all sorts of finance-- >> You had a phrase you mentioned before we came on camera, something about money, the future of money. What was that phrase? >> Programmable money? >> Programmable money. >> Yeah, right, right. >> I want you to take a minute to explain. Love this concept, Miko Matsumura, thought leader friend of ours, has a vision called open source money which is more of an open source, this hey money's flowing, it's open, it's out there, but you have a different perspective which I like too which is programmable money. What does that mean? Describe the concept and take a minute to unpack that. >> The concept of programmable money comes out of a paper that I jointly authored with Jed McCaleb who is the founder of Stellar and was the co-founder of Ripple and is a really smart guy so I feel like I have a small brain when I'm around him but we really wrote it in the context of central banking and the ultimate issuer of an asset because central banks are the issuers of currencies. Right now the primary dealers, if you will, for currencies are commercial banks and so that whole commercial, central, fractional reserve banking model has been replicated from the western world to everywhere else in the world and you can't get access to central bank money as they say. But if the central banks were to issue digital currencies which is essentially a token of fiat currency, so you own the token, you own a claim of fiat deposits held on the balance sheet of the central bank, now you have the ability to move that around. You can actually program the movement of money because it's a digital thing, it's a digital asset that's as good as cash and if you are working with a central bank who's issuing it, not only is it electronic money, it's actually legal tender because if the central bank issues it, it becomes legal tender which means everybody who accepts it has to accept that form of payment. That's pretty profound if we can get to that point and we're working with-- >> And software's a big driver in that because you need software to manage digital assets. >> Oh yeah, absolutely. >> The software's driving it. Bill Tai is an investor, I interviewed him, and he had an interesting topic and I made a highlight of it. He said after World War II, we talked about the oil situation when the dala was pegged to OPEC, that was essentially tokenizing oil. Then okay that's good, so that was their ICO. >> Right, right, yeah, essentially. >> That's what you're saying, you can actually put fiat to the digital token and take advantage of the efficiencies of digital. >> Right, yeah, okay-- >> Taking down all the structural inefficiencies that were built prior to digital. Is that ... >> It is. You fast forward a little bit and think where that takes us. It's no secret that the U.S. dollar is the trade currency of the world, and I want to be careful what I say because, you know, I'm an American patriot here but there are other large G20 nations who wouldn't mind dethroning the U.S. dollar as the trade currency of the world and so as you see central banks starting to get involved in the issuance of digital currency, you create a situation where all of a sudden well maybe oil could be traded heresy in other currencies besides the U.S. dollar which is all it's traded in today. Goes back to your ecosystem question. >> This is a great point. We could riff on this stuff, let's riff on this. The UK just signed a deal with Coinbase, this is a major signal. >> Sign, yeah. >> You got a legitimate country saying we're going to give a license to Coinbase, now they have Brexit to deal with so they're looking at it as an opportunity. Outside of the UK coming in and doing that deal with Coinbase, it's on the web, look up Coinbase in the UK, you'll see the deal. You have other companies trying to jockey for who's going to be the Wall Street for crypto? Meaning I want to convert crypto to fiat, where do I go? Do I go to Estonia? Do I go to Dubai? Bahrain? Armenia? China? There is no place yet. Your thoughts, what's going to happen? What shoe will drop first? Is there a domino effect? >> Yeah, well there's a couple things as it relates to the UK and kind of the extension to Coinbase of access to the national payment system which is really what enables them to then convert fiat to crypto and back. That's pretty interesting. Going back to the programmable money thing, though. If you have a central bank issued token, you've essentially extended the real time gross settlement system which has been only accessible by commercial banks to anybody that holds that token, right? It's a trend, I think the UK sees it coming, I think the Federal Reserve sees it coming. It's going to happen. >> Is it winner take all or winner take most? >> I think it creates a much more purely efficient market. It's a democratic system so I don't think there is going to be a new Wall Street, I think it's going to be-- >> John: Decentralized. >> Exactly, I mean that's the beauty of it. It's scary though for establishments like Wall Street to look at this and it-- >> I mean are the banks scared? You're dealing with the banks right now. >> Yes, they're scared. I mean I've actually read a recent article that Bank of America, the headline was "Bank of America's afraid of digital currency." You've seen Jamie Dimon who came out with a kind of a hard stance against bitcoin and has since kind of backed away from that. >> Of course you probably bought in when it dropped and now it's back up again. >> Well I think part of the bank was actually facilitating their clients and trading bitcoin so that might've been it. There's a natural reaction to it, especially if you're part of the mainstream establishment. >> There's no proof of that, I'm just saying we're posting on Reddit and whatnot. >> No we're just joking around. Jamie's a, he's a good guy, right? >> Can I get your thoughts on digital nations? We've been talking about this. Just a few years ago, smart cities, IoT was kind of the narrative, oh be a smart city, control the traffic lights, and instrument the physical goods and services. Now with crypto and blockchain front and center conversation is digital nations with sovereignty around their cash. This is kind of your point earlier. How are you seeing that? What's your view? Are you seeing that trend? Are there dots connecting for you? Because again, people are jockeying for a position on the global digital backbone to be a major part of the money flow, the fiat conversion, what is the goods and services? Who's going to clear the values? All digital, it's a perfect storm. >> Well I think there's always going to be the need for trusted entities to be the issuers of these assets because it all comes down to trust at the end of the day. The thing with bitcoin is that it's purely autonomous and people are a little bit skeptical of it because they're like, "Well who's controlling "the monetary policy?" and the answer is the market, you know, the users of the network are controlling it and that's why you see such volatility, right? Because the traders love it, they can go in and trade the up trends and the down trends. As long as there's volatility, traders are making money. I think there is still going to be a place for central authorities to add value, but that's going to be the pressure, is for them to prove that they're adding value not, you know, bureaucracy masquerading as process. >> I was reading an article that Telegram, which is doing a huge ICO, just got shut down by the Russian government, they went to turn over their keys, their private keys of their users. Say goodbye to the-- >> Jesse: I didn't read that, that's crazy. >> It's really crazy, so that's going to put a damper on their ICO but regulatory and then government issues around countries becomes a big deal. In your experience as Wells Fargo, at a bank, looking forward in the new digital world, is it one of those situations where path of least resistance, the countries that go more friendly get around that in a sovereignty where you domicile, where you start your company, where you do your banking. I mean I could start a company in Gibraltar and bank in Switzerland. >> Well transparency is part of the benefit or the downside of this, right? I think there may be advantages that pop up but I think they will equalize over time. I've been around the world now for IBM talking to 20 plus central banks, and I had a really interesting conversation with one of them recently in Asia. We're in the room with deputy director level people who are responsible for things like the NA money laundering policy and the economics and monetary policy and things like that and one person said, "You know, we're really torn "between two equally unacceptable decisions. "One is to ignore cryptocurrencies altogether, "and the other end of the spectrum is "to make them illegal, to ban them." I thought it was poignant that they see those as unacceptable, they have to do something in the middle. >> Do they weigh or ban? I mean look, the banning's happening. >> But okay so you saw that Trump used the executive order to prevent Americans from using or trading in the Venezuelan crypto that was issued on Ethereum, right? I saw that Venezuelan thing as a publicity stunt more than anything, an active of global defiance. So there's precedent now for, and the Russia thing with Telegram-- >> The United States of America has to step up its game because look at it, we have a lot of, I mean I remember back in the crypto days when I was just getting into the business, late 80s, early 90s, you couldn't even do it in the U.S., you go to Canada, that's why Canada's got a lot of innovation up there. We're risking our country, and I had one guy tell me in Puerto Rico, he's from South Africa, and he shouldn't be throwing any stones either but his point was, he says, "America's becoming Europe. "There's a shrinking middle class "while other emerging markets have a growing middle class," so the global impact of blockchain, cryptocurrency, and these applications are significant and have to be factored into policy decision making for governments. The U.S. can't just think about itself anymore in a vacuum. >> Right, not anymore. >> Because there's implications otherwise the U.S. will turn into Europe, regulated, all these rules, byzantine stuff. It's a real problem. Your thoughts on that. >> It is. It's cliche, but we live and work in a global economy. The flow of information globally in real time has been around now for a while and it's about time it came to money. The internet of money is a term I've heard. It's just, it's unavoidable. >> Jesse Lund here inside The Cube. Great guest, great conversation. >> Yeah, thanks. >> How do people get ahold of you on IBM's, you mentioned you got some great stuff going on, you've written a paper, you've got a lot of content, where does someone go to discover some of the stuff that you're working on they could get involved with you guys? >> Yeah well I mean the best place to go is IBM.com/blockchain, that'll tell you a lot about what we're doing and the different industry-- >> And the programmable money paper you wrote, is that there? >> It's out there as well, there's a link to that. >> On IBM.com? >> You can get me directly on LinkedIn, I try to be pretty responsive with that because I really enjoy the dialogue. This is a revolution of the peoples, man, it's all over the world, so it's great, it's great to be a part of it. >> And people tokenizing their business, there's real opportunities to change the game to bring consensus, data driven, new kind of supply chain whatever to the markets you're in, great opp-, and you need banking. >> Yeah of course. >> You need to have money. Money, marketplaces, and communities, that's my mantra. >> I subscribe to it. >> Thanks for coming on. >> Thank you, thanks for having me. >> Jesse Lund. I'm John Furrier here at IBM Think 2018. Cube coverage continues after this short break. (upbeat music)

>> Announcer: Live from San Juan, Puerto Rico, it's theCube! Covering Blockchain Unbound. Brought to you by Blockchain Industries. (lively music) >> Welcome back to theCube's live special coverage here in Puerto Rico for Blockchain Unbounded which is the global event where people from around the world are coming from Silicon Valley, New York, Miami, all over the globe, Moscow, all over the world here to talk about blockchain decentralized internet, and of course, cryptocurrency. Your next guest is Olga Petrunina with Adara.IO. Welcome to theCube. >> Hi, happy to be here. >> Thanks for coming on. So you're from Moscow which it's cold there right now. What's it like? >> It's minus 15. (laughs) It's much better here in Puerto Rico. I'm happy. >> It's so exciting to have you. Thanks for coming on. So the global conference, this is really a global phenomenon. Take a minute to explain what you're working on, what the product is, what it will become, is it launched yet, what's the company about. Take one minute to explain. >> Okay. We are building intelligent blockchain ecosystem which consists of exchange and crypto wallet with artificial intelligence mechanism inside. We are providing access to the crypto for Main Street investors who have no idea about crypto, want to invest, just put their money in our wallet, pick up the strategy, and just get money. (chuckles) >> So you're targeting mainstream investors, not like the insiders? >> No, no, of course we have professional players on our platform because we're going to educate our investment mechanics with strategy of professional groups of traders. >> So are you going to have an exchange and software behind it? Explain the architecture of the solution. >> All right, we are based NEM. It's our core partner. We are early adapter surveying their protocol, Catapult. We integrated it in our exchange because they have really good new features like aggregated transactions when you can send a pool of different currencies in one transaction. That's a really great idea. Also, they implemented the centralized exchange in their protocol. So our exchange right now is centralized. We're going to build the decentralized part of our exchange based on Catapult. >> Are you worried about the centralized portion because of recent hacks? How are you thinking about doing that? >> Yeah, in case we are using a NEM protocol, they have like four layers of security. As for me, it's the most secure and most scalable protocol. Of course, we are using the cold wallets connected to our platform so we are not storing anything on hot wallets. It's like 95% storing on the cold wallets. >> What's your biggest fear? >> Oh, (laughs) spiders. (laughs) No, I just-- >> Is that a cryptocurrency I don't know about yet? (laughs) >> As for me, the biggest problem for crypto is regulation. Now, we have to... Like they're building the structure for obtaining different licenses in different countries. So we have bought update for licenses in Dubai, in Estonia, and also we are going to apply in Switzerland. So it's really hard to negotiate, everyday the new news regarding regulations. >> So talk about where the exchange will be. You mentioned Dubai. Are you having one in one nation or you having multiple countries participating? How does it work? Does everyone have to participate? >> In case of that in Dubai, there is no legal structure, for example, bank licenses in crypto, so we're going to have to invent licenses in crypto in Switzerland. In Dubai, we obtained for license trading crypto into commodities because Dubai, they're focused on commodities base. In Estonia, we received a payment system license and brokerage license. >> So one of the big news this week is Coinbase, one of the most popular exchanges, had done a deal with the UK government. I don't know if you saw that, the Financial Conduct Authority, the FCA, just now gave them a license for their fast-payment service for Fiat. So a new government move, really interesting. Are the governments that you're talking to thinking the same way? >> Yeah, we talked to Central Bank of Dubai. They're also going to legalize all the crypto and involve their blockchain and cryptocurrency with companies to set up in their legal structure in Dubai, the same with Estonia also. Everybody want to be like the "crypto alien." (chuckles_ >> The crypto Wall Street. >> Yeah, the crypto Wall Street. >> And every country wants to do it, Puerto Rico, Armenia, Bahrain wants to get in on the action. >> Yeah, the same with Russia. We are members of Russian Blockchain Association. We are working on laws for Russian government regarding crypto. It's going to be pretty good regulation. We'll publish in this summer, like July. So I hope that the-- >> Olga, talk about the entrepreneurial landscape in Russia right now. How vibrant is it? We know they have technology savvy. >> About me? >> And Russia in general. >> And Russia in general. >> In Russia, in Moscow. >> Yeah, a lot of good blockchain developers. >> And the young kids. >> Vitalik is Russian. (laughs) >> I interviewed his mom, by the way. >> Our developers based in Moscow, that's why I'm also based in Moscow. Everybody like crazy about crypto in Moscow because I think we have a lot of good tech background in Russia so why not use it for blockchain expansion. >> Great Russian expertise. I know a lot of Russian developers are good, but also in Estonia, there's some great developers, too, all over the world. >> Right, but Russia has >> It's a global revolution. >> In blockchain. Vitalik Buterin is Russian, so it makes a lot of sense. (laughs) >> When we get him on theCube, we'll grill him. What do you hope to do in the next? What's next for you? >> We're going to be public in June. Now we already developed our exchanges for (mumbles) and security check. After that, we're going to build our artificial judges of investment mechanisms, so we need like one year and a half for educated. Our next step, we are thinking about taking utilization real assets also because we already have all these elements which is necessary for the organization in our core partners technology, NEM. So I think we will move in this year also. >> What is the main thing that you're going to use in your exchange that's going to make you different? >> What's different about your exchange? >> We have a lot of expertise from different traders around the world. All of them are claiming about their unstable APIs of exchange, and we are focused on high scalability and like best technologies in API building of exchange because we need a lot of traders on the platform. We have development that APIs for follow trade. So it's like our best feature, I guess. >> What kind of partnerships are you looking to do with other people? >> We're looking for traders, of course, because we need them to bring our platform, to bring forth great entity to our platform. We are looking for companies which going to list on our exchange. Looking for investors, also. >> Olga, what do you think about this conference here? >> Oh, it's pretty amazing. Our first time in Puerto Rico. I was really surprised. It's amazing country, amazing island, and a lot of good connections. So, I'm happy to be here. >> It's a global landscape right now. >> Yeah right, it's global, peer-to-peer economy. (laughs) >> Well, Olga, thank you for coming on and sharing, theCube. We learned something today. You don't like spiders. >> (laughs) Right. (laughs) Thank you for inviting me. >> You're afraid of spiders. >> Thank you very much. >> Thank you. >> All right, more of Cube coverage here in Puerto Rico. I'm John Furrier, the host of theCube. Extracting the signal from the noise here in Puerto Rico. It's theCube's continuing coverage of the blockchain, cryptocurrency, and the decentralized application revolution. We'll be right back after this short break. (lively music)