Tey El-Rjula was born in Kuwait but lost his birth certificate at the age of 5 during the Gulf War. He later spent two years in a refugee camp in the Netherlands – without identity papers or a bank account. But he did have a smart phone and access to the internet. With this he downloaded the bitcoin app and began receiving payments in cryptocurrency.
“People mocked me and said I was taking magic money” he recalls. But El-Rjula is one of 1.7 billion unbanked adults globally. These are individuals who have no access to basic financial services like a bank account. The blockchain entrepreneur and Founder of FLUUS.com speaks on behalf of what he calls “invisible people like me” whose lack of status, ID, or even skin colour exclude them from traditional financial systems. Financial inclusion is typically defined as access to essential financial services including payments, savings and credit that are delivered in a responsible and sustainable manner.
‘The largest economy on earth‘
Describing the internet as “the largest economy on earth”, El-Rjula sees cryptocurrencies as its obvious form of money. Bitcoin and the blockchain technology on which it is built provides borderless, immutable, decentralized record-keeping on a scale never seen before. Money is a form of record-keeping. “In the history of money, there has always been fraud and misuse by third parties who control the recording keeping” explains El-Rjula. “But now we have a neutral manner of doing this.”
These record keepers have also been gate-keepers – typically banks and other large financial institutions. Raised in Lebanon, El-Rjula explains how the country’s 2019 financial collapse resulted in banks “confiscating people’s hard-earned money” as they were forced to help plug a government deficit that ran to 150% of GDP. Describing it as “putting money into a hand with a hole in it”, El-Rjula wants to provide people with an alternative. “They don’t have to trust the banks to save their money, instead they trust mathematics and science”.
‘Blockchain technology is for everyone’
Fluus means ‘money’ in Arabic. The platform, according to El-Rjula, is the first and only localised, non-custodial platform for MENA markets. It is designed to create a crypto-based economy that allows users to buy, send, cash-out or swap cryptocurrencies and tokens anywhere. The Syrian refugee and tech entrepreneur for good is unapologetic in his passion for the freedom of transaction that such systems allow. “Blockchain technology makes transactions available to everyone. And when I say everyone, I mean everyone – terrorists, drug dealers, saints, priests, imams, refugees.”
Others remain unconvinced. A variety of factors including the high volatility of digital markets associated with cryptocurrencies, high transfer fees, lack of regulation, fraud and market manipulation are well documented. There is an ever-increasing variety of cryptocurrencies, stable coins and tokens available. Central bank digital currencies (CBDCs), for example, are issued by a central bank and are meant to be more stable than currencies like Bitcoin or Ethereum. Both China and the EU have CBDCs.
Anonymity and accessibility
Yet the creation of such currencies undermines the decentralized, neutral and open qualities associated with cryptocurrencies such as Bitcoin. For El-Rjula, this is fundamental. Regulation, by its very nature, imposes limits on who can and cannot gain access. CBDCs must be regulated by law. But the anonymity and accessibility associated with traditional cryptocurrencies means that nefarious actors can and do take advantage of this unregulated financial landscape.
How does one know, for example, that your bitcoin isn’t being used to fund terrorism. This, according to El-Rjula is beside the point. “Do you check the euros in your pocket to see if they have been used to buy something illegal or illicit, previously?” Cryptocurrencies he maintains, are designed to be digital cash. This means it is non-fungible – all payments must be treated equally, irrespective of whether you bought drugs or pizza with them, the results must be the same.
No access to a bank account
This deeply democratic approach to financial inclusion has caused concern, particularly in places with developed banking systems where the majority of citizens enjoy access to a variety of sophisticated financial services. Yet many nations are unable to offer their citizens secure access to a bank account – this includes payment, transfer and savings facilities, even credit and insurance options. These individuals are far less likely to be looking to speculate on the crypto markets.
To those, like Nouriel Roubini, professor at New York University’s Stern School of Business, who says that cryptocurrency has “no value and is in a bubble”, El-Rjula has the following response: “I doubt that this man has lived in a refugee camp for two years and used his smart phone to be financially included.”
Indeed, humanitarian application of blockchain-based crypto solutions is gaining ground. The UNICEF Innovation Fund selected 8 new startups last year out of over 400, all focused on developing open-source, blockchain-based solutions for greater financial inclusion. The new cohort received investment in USD and/or cryptocurrency and a year-long mentorship with UNICEF’s technical experts and partners. Over 50% of the companies are female-led.
Humanitarian application
Initial results are promising. Leaf, a Rwandan-based start-up allows people to send and receive money directly using their phones. They do not have to be smartphones and no passport or internet is required. As of October 2021, there were over 5,500 users in Rwanda, Kenya and Uganda.
A similar Kenya-based project, Kotani Pay, allows users to dial a short code on their phone to send and receive cryptos which can then be converted into Kenyan shillings. In Argentina, Xcapit, is creating a blockchain based platform that makes it easier for those who lack a bank account, credit, or financial fluency to save and invest. Any person is eligible and can open an account by simply downloading the app and activating the wallet.
For El-Rjula, the way forward is clear: “We have to look into the internet of money and we have to be disruptive.” For the financially excluded, and let’s remember that’s 1.7 billion people globally, relying on what El-Rjula terms “outdated financial systems” is not the answer. Neither is “sitting in the corner and crying. Take your smart phone, download the Bitcoin app and offer your product or service for bitcoin.” There are countless examples in modern history of technological innovations that have initially been treated with suspicion only to become indispensable thereafter.