You can’t talk about cryptocurrency and the future of finance without mentioning ConsenSys. Founded in 2014, ConsenSys has earned its status as a pioneer in the industry and is widely considered to be the leading Ethereum software company. Its mission is to enable developers, enterprises and people on a global scale to build next-generation applications, launch modern financial infrastructure, and access the decentralised web. And it’s doing it, driving the space forward at a rapid rate.
We sat down with ConsenSys’ South African lead, Professor Monica Singer as part of our Women in Crypto series, to discuss her career, how Africa could benefit from cryptocurrency and Central Bank Digital Currencies (CBDCs) in particular, and more. Professor Singer is also a board member of SAICA (The South African Institute of Chartered Accountants) and the Accounting Blockchain Coalition.
A world gone digital
Early in Monica’s career, she was tasked with transforming the South African financial markets from a completely paper-based system to digital. She described how she endeavoured to get rid of the archaic methods and totally overhaul the legislation and market practices. She founded a company called Strate, which acted as a central security depository that centralised all the data related to stock market transactions and OTC trades.
Monica was Strate’s CEO for 20 years: “We tried our best to be as efficient as possible, to the point that South Africa was even recognised as one of the top financial markets in the world according to the World Economic Forum (WEF) in 2009. But there were many things we still couldn’t do with the technology at the time.
“We couldn’t enable settlements to be faster, we couldn’t reduce costs – it was very expensive because there were so many intermediaries. We couldn’t give investors consolidated positions, and so on. Every time we tried to improve, the market would push back and say no.”
In 2015 though, everything changed. Monica read Satoshi Nakamoto’s Bitcoin Whitepaper for the first time. “I just started crying,” she says. “I thought, ‘oh my god, after 20 years of trying to figure out solutions for the market, here comes this paper that showed us how to resolve the many unresolved challenges we were facing in the financial markets.”
It quickly became apparent that the root cause of many of the problems had been the centralisation of information, which had left vulnerabilities in the system and kept markets stuck in a paradigm that couldn’t be changed. Satoshi’s whitepaper showed Monica that decentralisation and using the internet to facilitate transactions, as well as cryptography to secure them, was the only way to move forward efficiently and transparently.
She went to Strate’s board of directors and told them that in 10 years time, it was unlikely their jobs would even exist. “Everything we built would simply disappear because it wouldn’t make sense anymore.”
So as Monica put it, “I wasn’t going to sit there and rearrange the chairs on the Titanic,” and after 20 years of building an incredibly successful business, she resigned.
“What makes you successful in the past isn’t going to make you successful in the future,” she explains.
Building a crypto empire
As fate would have it, in 2017, Joseph Lubin, one of Ethereum’s co-founders and the founder of ConsenSys, called her up and asked her if she’d be interested in working with him at ConsenSys. Monica gave up on her CEO position in legacy financial markets to join what was at the time, a startup in a still-burgeoning industry.
This was immediately obvious from her surroundings. The cryptocurrency space is dominated by millennials and Monica was one of the only non-tech or developer hires at the time. “When you’re the CEO of a company and you send out an email, everyone replies to you immediately. It was a totally different experience joining ConsenSys – I had to learn techniques to get their attention and be seen as part of the team.”
However, it was worth it for Monica because of the role that cryptocurrency has to play: “I joined ConsenSys because of Satoshi’s vision and I love working there because I’ve seen the evolution and I’m confident in the wisdom I have to offer.
“The concept of standing in a queue at a bank branch is insane. If I transfer money to Uruguay, where I’m originally from, it would take longer than if I got on a plane and physically brought the money there myself. Now that we’ve seen the reality, how could I not be absolutely passionate about it?”
Joining the industry in the midst of the crazy ICO boom and being from a regulatory background, Monica has been able to balance encouraging innovation and implementing prudent practices that have ultimately helped position ConsenSys as the powerhouse software company it is today.
On central bank digital currencies
Central bank digital currencies (CBDCs) have been a popular topic of conversation in recent years, with a number of major countries around the world in the latter stages of developing their own.
Simply put, CBDCs are a digital form of government-backed and issued currency. Cryptocurrencies and other virtual currencies are not issued by a state or government and as such they are not financially backed by them. Essentially, governments haven’t (yet) classified them as legal tender that you could use as you would your local currency, but CBDCs would be legal tender. They’re a controversial topic in the crypto space, with many arguing that they go against the central tenets of freedom from government control. However, they’re a concept that Monica firmly believes in.
“One of the projects I’m working on at the moment has to do with central bank digital currencies (CBDCs) at a retail level and this is going to change everything. For every citizen, having a digital wallet with their CBDC and the potential ability to include cryptocurrencies like bitcoin and ether, is going to become second nature.
“I’ve been studying this all my life – I’ve been a chartered accountant since I was 28 years old. The issue is that there are still close to 1.7 billion people left out of the financial markets – no bank accounts, they can’t buy property, don’t have access to insurance or loans – and while I won’t get into why this happened, a lot of it comes down to the fact that key players at the time didn’t care.
“But now, this is our chance. With a simple mobile phone, we can connect these people to something that is so inexpensive that even if they earn R100 a day, they can still have the ability to save money, get loans, buy property, or gain access to fractional ownership of property in the DeFi realm, and so much more.
I am so passionate about CBDCs – once we implement this across Africa, no one will have to queue in a line for hours on end, or outside in the rain as we’ve seen during the pandemic to get paid a grant. We’ll have less physical cash to deal with, which is much safer for the women travelling with money in their bras, hoping they won’t get robbed on their way home from work.”
“All that we’ve created is so inefficient – remittances in Africa is a shambles. People give their hard-earned money to a taxi driver from South Africa to Zimbabwe, hoping that it will be sent home to their families safely. Then you hope your family uses the funds for the right things which in many instances is not the case and the sender has no way of verifying this. This is a terrible risk because we simply did not look after these people. We need interoperability and digitisation in Africa – we can empower people to use their mobile phones in the most efficient way, and that’s just the low-hanging fruit.”
Resistance to change
Whether or not there are solutions to the everyday problems people face means nothing when we’re faced with denial or fundamental resistance to change. Monica has experienced this first-hand when speaking to business stakeholders, educators and members of government. She also believes that this resistance is incredibly misguided.
“We’re not building these things for the baby boomer generation," she says. ”They will more often than not choose to carry on with their current legacy. But one day my grandkids will ask me what a bank branch was and be shocked to find out people had to stand in queues and wait for working hours to make a financial transaction. These two worlds are completely different.
“When I present to people, I always say to them: ‘do you know that the internet is built on TCP IP technology? No? Well then, who cares? You know how to send an email, you don’t need to get bogged down in the tech details.’ It’s the same with blockchain – I don’t need to explain how blocks get created, or how hash functions work in order for people to understand how this technology is going to change the world. By removing that layer of tech-talk, we include other professions in the conversation. Writers, accountants, lawyers – all people who might not be tech-oriented can understand, create and work in this space regardless.
“But when I present to CEOs my age, they say they’ll be retired before this technology comes into reality. I tell them, ‘if you plan on retiring in the next two years, maybe’. They think this is only going to happen in ten years time, but in the past two years, look how far the crypto industry has come. Look at the price surge this year, at the huge interest and demand. The two parallel worlds are going to start merging, and perhaps not for the older generation, but for new generations that will wholly embrace this technology.
The other reaction I get is anger and I think that’s because people are realising the old ways just aren’t going to work anymore. When I present to governments, demonstrating very clearly how they could eliminate corruption with blockchain tech, they never phone me back. That’s when I know they have no intention to eliminate corruption or they are so overwhelmed with their current inefficient ways that they cannot cope in creating a new reality. And truth be told, this technology doesn’t need so many people and the reaction is that we can’t create more unemployment."
Therein lies another massive obstacle. As the world moves towards mass-digitisation of sectors, countries not prioritising addressing critical skills-gaps and shortages, which ultimately starts at the school-going phase, will experience serious disparity with those who are. The gap between the developed and developing regions is expected to only increase – at an exponential rate.
“Unfortunately, technology waits for no one. Whether we like it or not, these changes are real and they’re happening today. In order for countries to avoid being left behind, it’s crucial an increased focus must be placed on readying the next generation for the tech revolution.”
The bankless model and the power of optionality
The beauty of crypto often simply comes down to having the power and freedom to choose. We’re no longer bound to having to deal with a handful of banks or traditional financial institutions if we’re looking for loans, to diversify our portfolios, or just to safely store our money.
“Many of us in the industry believe in the bankless, or sovereign model whereby I want to look after myself, and I don’t want to have to phone someone or ask something for permission to do something. If I have to, I will – but not because I don’t have other options.
“I’ll give you an analogy: All my life, I’ve been fighting for women’s rights – for women to be independent and self-sufficient. Nowadays, I hear many women in the younger generation saying, ‘why do I need to do this for myself? I’ve got a choice, I’ll marry someone and he must look after me.’ And then I ask myself why I fought so hard for this if there are still so many people who don’t want to take ownership of their own lives? Then I realise that free will and the option to choose is the bottom line.
“So bringing that analogy back to the crypto world, my concern is that there will always be a lot of people out there who will never want to be responsible for themselves. That’s where the service providers will come in and say, ‘I’ll look after you.' So in essence, through our work in this industry, we’re not eliminating the intermediaries, but at least, we’re giving people options. If I want to be self-sufficient, I should be able to. And if I want to be looked after, I should be able to do that, too. This is where I see the opportunities for the current and new service providers that can adapt to offer these new products and services”.