Lennix Lai, the Director of Financial Markets at OKEx recently gained the attention of the global financial and cryptocurrency community by pitching the idea of his company working with governments and other institutions to eliminate “unbankedness”. The location and timing of his speeches in this regard is of utmost importance as Lai spoke at length about blockchain technology and how it could help in promoting financial inclusion while attending high-profile events along the sidelines of the World Economic Forum Annual Meeting at Davos.
We had a few questions for Lai, to understand more about his vision, and this is what he had to say.
NewsBTC: The problem of being unbanked has been discussed by many before you, and there have also been few initiatives taken in this regard. What according to you is the reason for the failure of such programs to ensure everyone has access to financial services?
Lennix Lai (L): In one word – Trust.
The absence of basic financial knowledge would give the unbanked a hard time to trust a financial institution. Previous attempts focused on removing the barrier of access to banking via technological means, whilst the last miles of financial inclusion is the psychological trust. Blockchain might be a potential answer to this.
NewsBTC: What do you think needs to be done to achieve 100% financial inclusion in the world?
L: We need a “bank” that operates across borders, in multiple jurisdictions addressing the basic demands of the unbanked – payment, remittances, storage of value in a secure manner. We believe with the adoption on mobile technology and internet, proper integration with state-backed crypto and blockchain, everyone with a phone can access basic banking services in a very cost-efficient manner
NewsBTC: In a recent event, you mentioned that OKEx can help address “Unbankedness”. What can OKEx bring to the table?
L: OKEx believes the core ingredients of next-gen financial inclusion are the usage of stablecoin, underlying blockchain technology and a fair and transparent exchange market. We created a fully regulated stablecoin USDK; the launch of OKchain is on the way; and we are now one of the largest crypto exchanges in the world endorsed by major institutions.
NewsBTC: Are there any initiatives already in place at OKEx to help the unbanked?
L: Currently we are building some pilot services with local partners on USDK to be used as a settlement layer for cross border transaction. We are looking to expand the partnership with same thoughts too.
Another major challenge banks face when trying to serve the unbanked is that many of them do not have a clear ID (no birth certificate or police registration) to satisfy the Know-Your-Customer (KYC) checks. With growing numbers of endorsement from global regulators, blockchain can assist financial institutions to simplify their KYC practices by giving individuals their own digital identities to use for banking, property rights, etc. Thus the unbanked can make and receive transactions with blockchain, remittances to foreign countries will also be painless and much more efficient.
NewsBTC: Can you tell us about your vision of “Inclusive Sustainable Development”?
L: To cross one of the biggest hurdles in human wellbeing, many suggested that blockchain technology can make a difference in the world by helping those left behind by the traditional financial sector to gain access to financial services that could boost their living standards, and substantially lower the operational costs to serve areas that traditional banking cannot cover. With such vision, OKEx should not be working alone like an island, we urge the community and market players to join hands in building a market that is financial inclusive, yet mutually beneficial to tthe raditional financial system. We would love to step forward as a pioneer in striking such a balance.
NewsBTC: Does OKEx have any social initiatives already in place or in the pipeline? Can you please tell us more about them, and how people are/will benefit from it?
L: Although there is not yet a specific social initiative already in place. Here at OKEx, we are committed to bringing a robust and trustable environment to cater to crypto users; working on the hardware and software to engage with and perform the best compliance practice in the industry. In 2020, OKEx will continue its effort on developing stablecoin, OKEx wallet and also derivatives products. We believe blockchain can achieve an inclusive sustainable development as well as financial inclusion for all, banked and unbanked.
NewsBTC: Meanwhile, as the global economy stares at a slowdown, do you think digital assets can guide the world out of this tough phase? How will financial inclusion address the current situation?
L: I believe digital assets could counter the global economic slowdown. EY research demonstrates sizeable economic benefits, particularly for emerging economies, from driving greater financial inclusion. Financial inclusion can boost GDP by up to 14% in large developing economies such as India and up to 30% in frontier markets such as Kenya. With digital assets and blockchain tackling the last barrier, global economic growth can be much more optimistic
NewsBTC: It is evident that your participation in events at Davos has been successful. What are your key takeaways from the discussions you had there? How was the general reception to your ideas?
L: The major takeaway in Davos is the surprise of the number of crypto discussions in a forum that has historically been focusing on the global economy. It’s symbolic to me that blockchain and crypto might be the next growth catalyst for the world economy.