Mónica Singer, leader of ConsenSys for Africa

Mónica a public accountant born in Uruguay, has developed her entire career in South Africa, where she was the first executive director of Strate, the securities deposit of that country, created in 1998. In August 2017, she left her position and concentrated on studying and bringing blockchain technology to various industries through the Consensys Consultancy. She was recently in our country as the main speaker of the “New Technologies: Challenges for the Financial Market. Are we prepared?” seminar organized by DCV.

• Do you think the financial system is prepared for the breakthrough of new technologies?

The financial market is not prepared for the breakthrough of new technologies. The change they must achieve is so fundamental that it is difficult to implement. Financial markets are used to centralizing functions, using intermediaries, having brick and mortar bank branches, establishing limitations on the movement of funds regulated by the central banks of each country and using technologies invented in the 1970s. All of this will change. Since the publication of the white paper by Satoshi Nakamoto (a pseudonym of the people who created the bitcoin and blockchain idea) the paradigm changed. If we add robotics and artificial intelligence to the use of blockchain, which produces a ledger that is unchangeable and transparent, a change shall occur in the financial markets in a way that nobody imagines today.

• How will the new technologies change the current form of the financial system? What elements do you think will disappear?

For example, there will be less use of cash in payments, smaller companies listed on traditional stock exchanges and more use of applications on mobile phones where investors will have access to many more types of investments without having to use intermediaries. Investors will be able to delegate functions to a bank but will not have to use a bank exclusively for financial transactions. Central banks will have to work internationally to define the standards to make use of a digital currency. Even financial products or services will be different from those we use today. They will have other names such as tokenized values, which represent all types of assets such as art, music, diamonds, electricity, collectibles and real estate, among others.

• Within the new technologies, is blockchain generating the biggest changes in the financial system?

The current financial system depends on transactions that are recorded in a type of “book” where the responsible entities keep the relevant records. Society has given this responsibility to intermediaries such as banks, stockbrokers, central banks, stock exchanges, settlement systems, custody services and financial asset managers, among others. We depend on the conciliation of these “books” between the buyer and the seller, the payer and by whom receives the payment, and the auditors’ work who verify that all these entries in the “books” are true and correct.

With blockchain all of this changes since the “book” is unchangeable, transparent and uses an algorithm that allows providing faithful information that is correct and does not depend on an auditor or conciliations that must constantly be carried out. It reduces the costs of maintaining these files and increases the possibility of achieving a higher speed of transactions in financial markets. Thus, reducing the costs of transferring securities between people. The only thing that shall be necessary is a mobile phone with internet access for financial transactions. Universal access to financial products, with the right education, shall allow many people to improve their quality of life.

• In what areas of the financial system will we see the biggest changes with the breakthrough of blockchain?

It will increase confidence in financial markets since blockchain is unchangeable and has an algorithm that prevents fraud. The cost of the transactions will go down, the technology is easier to implement, since it does not use central computers or specific messages and the technology is easy to program which makes the implementation faster. It will increase the security of the systems, since the information is distributed in several computers that can be located anywhere in the world (therefore, preventing the information from not being available, for example, if there is an earthquake). It also makes it very difficult to manipulate the information or be attacked by a cyber-attack.

Payments shall be instantaneous to the service providers without having to wait for someone to confirm that the products have been dispatched. Similarly, the transfers that are made abroad will not be delayed for a week, since it will occur in real time and the costs will be much lower. If central banks accept the digital currency concept (that is to be issued by themselves), the risk that depositors may lose their money if the bank goes bankrupt will be a thing of the past. This is just one of the few examples.

The most important change is that blockchain will allow the experience of the financial market clients to be more agile and easier than what exists today.

• In what development stage of new technologies are we today, and where will we be in five more years?

Markets that have accepted this technology is what should be used, since they are implementing significant changes. For example, the law has been amended to accept this new technology in countries such as Switzerland, Estonia, Gibraltar, Malta, Seychelles, Singapore, some states in the U.S., for example, Wyoming. Others are already implementing this technology in production and not only as concept tests. Countries that are not educating the financial market users on what is possible doing with this technology and instead are training system engineers to program using blockchain will be left behind as this technology is advancing very fast.

Images of the seminar

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