Takatoshi Shibayama: 0:00

Hey, hey, hey, welcome to this week's episode of Blockheads Blockcast. I'm your host, Takatoshi Shibayama. I'm also the head of APAC for Ledger. I aim to uncover the creative, intelligent, and radical minds who are shaping the crypto industry today. I'm as crypto curious as anybody that's tuning into this show. We're doing this together, guys. Let's go. Welcome to License to Show, the offshoot of the Bloccast Normal series where we discuss the weekly recaps of what is happening in the ever-changing landscape of crypto, the markets, and anything else that comes to our minds. Before we start, everything we say here is not investment advice, business advice, relationship, or friendship advice. I'm Takatoshi Shibayama, and I have here with me, as usual, Lisa JY Tan, CEO of Economics Design. Welcome back.

Lisa JY Tan: 0:54

Excited to be back.

Takatoshi Shibayama: 0:55

And Nikki Joshi, COO of Emurgo, a co-founding entity of Cardano. Welcome back. Nice to be here. Thank you. And we have a special guest here today, Mr. Anthony Howe, GFTN's Strategic Forums Project Lead. Welcome to the show. Thanks, folks. Great to be here. And today I'll hand down the reins of the host job to Lisa. So take it away.

Lisa JY Tan: 1:17

Amazing. So excited to be hosting today. Today we're going to talk a little bit about Central Asia. Why Central Asia? Why now? And we've got Anthony today, who just came back from Tbilisi and he has hosted an amazing, amazing event with GFTN. So, you know, to let's kick let's kick start with some GFTN questions, Anthony. What drove GFTN to choose Tiblisi as a hub for Central Asian expansion?

Anthony Howe: 1:42

Yeah, cool. That's a great question to start on, Lisa. Thank you. GFTN, for those who haven't come across the acronym before, stands for Global Finance Technology Network. We're the custodian organization behind the Singapore FinTech Festival. And our mission in life is to bridge policy, capital, and technology to build resilient, efficient, and inclusive financial systems. We do that through a range of different interventions internationally, one of which is a forum program, which runs in various parts of the world, including the flagship Singapore Forums event. And so as part of the conversation or international dialogue that GFTN enters into, one of the regions that we've been in deep dialogue with for the past few years, actually, is with the National Bank of Georgia. And the reason that Georgia is really interesting is that it exists right at the heart of a region which, from a trade and infrastructure perspective, is known as the Middle Corridor.

Anthony Howe: 2:46

And it gets that terminology because it's the primary trade route between East and West. This is like a multi-thousand-year kind of construct, not to mention the amazing wine and culture that exists in the region as well. But that particular part of the middle corridor, particularly Tbilisi, is what we've been saying for the past few years in dialogue with them, is at the heart of that whole region. And it really is, I mean, you visited Tbilisi as well, Lisa. And I think you'll agree that once you get there on the ground, it's just an absolutely eye-opening, mind-blowing part of the world to just see to this day still as a thriving hub for trade and infrastructure and dialogue and a collaborative part of the world that is largely yet to be fully expanded and discovered. So we've been quite excited about that part of the world for a few years. We were able to collaborate quite closely with the central bank in Georgia. And we've just, I think, achieved a bit of a first for the region by bringing a high-quality international dialogue over two days and bringing together some international folks to talk about current day as well as the future in that region. There's some really interesting growth stats we can get into about the region as well, but that's the GFTN lens on why we did Georgia to start with. It doesn't take much scratching around to look at the growth trajectory of the wider middle corridor region, not just Georgia. And you've got really fascinating fintech to future innovation transition going on in markets like Kazakhstan, Azerbaijan, Uzbekistan, Armenia, Turkey, that whole region is bubbling for growth. 200 million people across the region. So yeah, lots of interesting stuff to dive into there.

Lisa JY Tan: 4:43

Yeah, Georgia is absolutely fascinating because it's it's very digital fast. And you the entire central corridor, Central Asia, Middle Corridor, they're all ripe for change, for upgrades and innovation in looking at fintech beyond leapfrogging fintech to digital fintech, also looking at tokenization, AI, quantum, and the whole jazz. It's all about embracing the cutting edge of what tech is bringing. And this time it's coming from top down. It's not just startups and companies doing that. It's a mandate, almost like a mandate from the central banks looking to transform the entire region. GFTN is all around the world, right? GFTN is the one that hosts Singapore FinTech Festival, which is one of the biggest in the world. You have it in Japan, which is also huge. You have it in South America, in Africa, all parts of the world. How does GFTN's global charter translate into regional action plans?

Anthony Howe: 5:37

Yeah, so that's through a very heavy focus on partnering, Lisa. We don't kind of ring up an events center and go and parachute in and put on a big show. We collaborate very, very deeply, primarily with the central banks, as the starting point for any international work that we do. And we really look to um start sort of on the ground up in terms of what that needs to look like for the local construct. It's different in every developing region. And our preference is to not take a particular country, but to look at helping regions develop. There's a lot of interest in what's called the Singapore model all around the world in terms of how Singapore has been able to establish itself as a hub in Southeast Asia for certainly finance and innovation in that regard. And so a lot of those developing regions, when we enter the conversation to start with, are interested in learning from those lessons. And what we find quite useful is sometimes it takes a little bit longer, but once we get that collaborative construct going with the central banks, we can add a different kind of impact when we start putting on the actual projects.

Lisa JY Tan: 6:52

Yeah, I'm surprised to know that everyone, everyone wants to become a Singapore. I've never been proud of holding a Singapore passport, speaking to all these central banks because everyone's like, oh, we want to be you when we grow up. It's quite fascinating. And this helps to transition to the question of building a network versus centralized organization in the region, right? Because you could have Singapore trying to parachute MAS in and trying to parachute all the Singapore, Singapore delegates in to try to transform the space as opposed to building a network, working with the local partners, understanding how do we localize the Singapore model into these regions. So, what's the strategic importance of building a network versus this kind of centralized top-down approach in the region?

Anthony Howe: 7:32

Well, I mean, I guess this is one of the themes that's very important to us in the world of decentralized or decentralization generally. Um, but also just what current day themes and macro trends are actually requiring of leadership organizations and governments around the world. The world is a fairly bumpy place at the moment, and we need to get our sleeves rolled up on different ways of collaborating in order to institute change. So GFTN is called a network for a reason. It's not supposed to be a centralized organization. It's supposed to be a different way of working, a high level internationally, through a network-building approach. And that all sounds fine at a vision level, but what it means in practical terms is very, very high purpose and high intent ways of working with the public or the sort of outwardly facing programs that we run, as well as how we work with partners internally. So heavy focus on partnering, but it also comes through in terms of how we run an event. So, for example, one of our flagship formats is this idea of a round table. And instead of having a keynote speaker and a panel, which we do some of as well, we've put a lot of work in over the last few years to develop a high collaboration format in a roundtable setting, which involves a lot of preparation on the speaker side as well as the moderation side.

Anthony Howe: 9:03

And what we are able to show is key industry stakeholders, quite often in large numbers, so six to 12 people in a round table format, thinking through critical issues and really going deep under Chatham House rules so that you can't take anything out of the room. But people get to see what collaboration actually looks like when it's working at a best practice level. And so we try to walk the talk in terms of how we run programs. And we we know that those kinds of conversations are incredibly hard to architect. You don't get to come across them very often. And so, yeah, it's it's ways of working, it's a partnering approach, and it's our fundamental belief that by designing a network rather than a big bossy central org right at the top is literally just more useful for the kinds of innovation that we're looking to prosper internationally.

Lisa JY Tan: 9:51

Yeah, I think these this decentralized approach is also quite prominent in the whole tokenization, digitization, digital assets. Well, and so here's a question to Nikhil from Emurgo. What parallels do you see between Cardano's decentralized approach or Emurgo's decentralized approach with GFTN's network model?

Nikhil Joshi: 10:09

So, first of all, I'd say, Anthony, so our colleagues at Cardano Foundation um have been doing some work with Georgia for some time, specifically around tracking of Georgian wine. So I was meant to be there a couple of years ago to meet the um folks within government and then the folks outside government who are working with them. They didn't have to apparently Georgia's very nice. I have yet to go to visit. But uh, we'll have to get you there.

Lisa JY Tan: 10:38

You will drink your body weight in wine. I think I was like 5% wine in my body at some point.

Nikhil Joshi: 10:44

Quite heavy, so that's a lot of wine. But okay. So yeah, look, I I think some of the points, Anthony, you you you mentioned there like certainly rig through the the idea of having the central bank as this kind of, you know, maybe an anchor point, but there needs to be the more entrepreneurial or venture side that comes in, and then probably a mishmash between homegrown talent versus who kind of understand the root problem, the you know, what is within that particular jurisdiction, what are the problems that need to be solved, as well as those who are outside and come in with a fresh pair of eyes. And I imagine your sweet spot, right, in terms of this this network or even a specific round table is getting the right combination of that. And I think that's you know, especially for an ecosystem like Cardano, um, where it is so decentralized, finding it it can be at times, you know, herding cats for that reason, but it does have the upside of bringing various players with the various view viewpoints and you inch your way incrementally towards finding, well, I'll call it the sweet spot, right? Of of ideation and not just ideation, but then the ability to execute. So that's what that's what I assume in terms of what you were trying to find, in terms of who were the right partners to create this aspirational network, right? What should it be in its end state?

Nikhil Joshi: 12:07

And I think what Cardano strives to be, um, particularly as well, because we've got a a lot of footprint in in Asia, in Africa, in Latin. So that regional hub anchor point or focus also resonates as well. So I think it's it's it's it's very interesting. And and and I just go back to the point around Georgia. So Lisa, where you started was this this point around Central Africa. And I think quite often we're caught up in digital, in technology, and it's a entirely brand new way of doing things. But quite often the technology is supplementing trade, right? In that region, particularly, the Silk Road, the original Silk Road, our China outwards, that still exists today. I went to um a couple of years ago, I don't know what the right word is, I was going to say testify, I don't think it was testifying, but I went to Wyoming and I spoke to the stablecoin commission there. And you know, Wyoming on the one hand is quite front-footed in that it was the first state to look at having its own stablecoin. But at its core, it's still a agriculture and oil state, right? And so that was very much around how to use technology to supplement the existing underlying trade, not craim, you know, should we say DeFi for the sake of DeFi and it's a whole brand new route to GDP. So I think there's a lot of parallels here as well.

Lisa JY Tan: 13:25

Um yeah, just fun fact, I know I don't know if I can say it's a specific country's thing, but one of the stunts in Central Asia, they're doing a lot of trade with China because this is part of the Silk Road. And right now it's still using very old school Swift payment gateways and payment methods because there's so much trade going on between China and this one of these stunts. That's at least a billion dollars in trade every single year. Right now, what's happening is it goes from this local currency to USD and then USD to CNY, which is the Chinese yuan. Throughout this, you incur about 8 to 10% in exchange rate fees. That's insanely expensive. And digitization or just looking at how tokenization, digitization can change this entire area is to make trade a lot easier, a lot swifter without Swift, ideally. And just putting everything on train, on chain, you get to track, you get to trace, to there's the whole movement of money. You get to financialize this entire region, and that is absolutely interesting. So, question to Tucker from Ledger. How does Ledger view the infrastructure readiness in Central Asia for digital assets adoption? Is this something you guys are looking at?

Takatoshi Shibayama: 14:35

Well, can I uh I'll definitely answer that question um later, but uh I just wanted to get a little bit more macro view on like what is going on in it uh Central Asia because you know I think for a lot of the guests uh the audience, maybe they don't really know so much about Central Asia. Like what is what is the general like economic uh uh backdrop of Central Asia? Is there a lot of trade going on in between? Are there you know problems that we do need to solve between the Central Asian countries so that we need this so-called network effect to exist in Central Asia? What are the kind of macro macro backdrops of of this region?

Anthony Howe: 15:13

Yeah, I can help out there a little bit if you like, Lisa.

Lisa JY Tan: 15:16

Yeah, go for it.

Anthony Howe: 15:17

Yeah, so I hinted at it before, Taka. Um like if you think about the whole middle corridor region, you're looking at a population of around 200 million people. And the nations that uh certainly we've been focusing on for the last project have been obviously Georgia, uh, but also Kazakhstan, Azerbaijan, Uzbekistan, Armenia, and even Turkey over to the west a bit more. So that region is projected to grow around about 5.5% in 2025 and a little bit more next year, um, which is significantly above global GDP growth of around 3%. You've got Georgia leading that growth. Um, they've had incredibly low inflation for the last few years, with a 7% growth projected for this year and a little bit less next year, which is the highest in the region. And the trade expansion forecasts for the region from the World Bank are estimating freight volumes tripling by 2030, with travel with travel times going to be cut in half along the middle corridor because of infrastructure improvements there. And so that's that's kind of like the super macro piece.

Anthony Howe: 16:31

The other interesting piece, and there's plenty more to go into on this, we got we got a fantastic briefing from Governor Natia at the conclusion of the summit, which is lots of more stats available. But one interesting thing to look at there is this inclusion gap and the opportunity that exists for all the nations around that reason, region. So you've got mobile banking penetration varying wildly around all those different countries, right? So Kazakhstan, 81% mobile banking penetration, Georgia, 70%, Armenia, 55%, Azerbaijan, 46%, Uzbekistan, 44%. So even just to start that conversation about financial inclusion and access, there's a fair bit of variance that you can start solving for. And there's a there's a real hunger in the region to start leveling up on that basic question of access for people. You've also seen what is reasonably talked about in the region as a fintech explosion over the last few years. Kazakhstan grew from 50 fintechs in 2018 to about 200 in 2024. Azerbaijan doubled from 22 fintechs to 55 in 2024. You've got massive underbanked populations in those various countries, which is basically white space for digital wallets, new banks, open finance solutions.

Anthony Howe: 17:53

A lot of the central banks have been quite active already in terms of open banking trials, CBDCs. So you've got this uh spirit of innovation that Lisa touched on there as well. Um, and I guess particularly to Georgia, you've still got that larger macro trade and infrastructure backdrop of being just the natural trading hub of the region already. It's just that the finance and the innovation finance piece is now sort of coming to the surface. So I mean plenty more metrics to dive into, but hopefully that just gives a little bit of colour.

Takatoshi Shibayama: 18:26

Yeah, no, thank you. Thank you. I mean, you know, obviously I've been trying to kind of get into that market. I mean, to answer your question, Lisa, I mean, ledger hasn't really done much in the region other than have uh a couple of chats with local banks that wanted to custody crypto assets. And as you probably know, like Kazakhstan's been mining Bitcoin for quite some time now, so they need a wallet to kind of hold on to those things. So we had a couple of conversations, but it's really good to understand like the whole macro view of like with that region so that I can start thinking about you know how I can kind of go into that market and service, maybe not the banks, but maybe more on the fintech side of things, because definitely there seems to be you know a little bit more speed in that area and then a wider audience to kind of capture.

Lisa JY Tan: 19:12

Yeah, very good points. And I also want to add on to what Anthony said. And I was I was speaking to a couple of commercial banks and central banks in the region. The region as a whole, as Anthony mentioned, there's like 200 million people in place in as a population. What two of the exports I would say are minerals, so a lot of oil, gold, aluminum, steel, so a lot of minerals from underground, and these are still untapped places. So there's like a lot of gold in Uzbekistan, apparently, and that's that opens up a huge opportunity. There's also huge agriculture, and one other thing, one new thing that they have been exploring is new energy generation. So right now there's uh a lot of a lot of hydroelectricity in Georgia, but they also just created a new wind farm because there's this huge piece of land, and all these new energy generation, to me, from a crypto perspective, it's like, okay, great, new places that we can start mining crypto assets.

Lisa JY Tan: 20:06

So I think that is quite exciting. There are a few pieces of land that is available to do all these mining mining um activities. The only thing is they don't really have access, as Anthony mentioned, other than financial inclusion, it's just access to a lot of other, you know, like the top-tier GPUs or other top-tier hardware to be my mining, to increase the mining capability. There's also a growing middle class, growing young people in this 200 million population. And there is there is always growth and really exciting stats for trying to go into a new space. The other thing is also that the financial market is still quite young. It's relatively young. Right now, all they're doing, most of the banks in these regions, as much as there's a lot of money flowing in, is still doing a lot of basic lending and borrowing. Things like credit market, things like financial markets, things like a bit more sophisticated derivatives market, they're just not there yet. And these commercial banks are very excited to move things forward and digitize, innovate, and trying to include financial inclusion into their mandate. And also looking at trade finance. Just like Nikhil mentioned, the still exists. T

Lisa JY Tan: 21:14

here's still a lot of items moving from China to Europe, Europe to China through this middle corridor, through Central Asia. Trade finance, I think, will be a conversation moving forward. And one of the examples I was painting is imagine right now we can, let's say there's gold or oil coming out of one of these countries. They need to go through different countries with different kinds of jurisdictions and checkpoints and things to report. Everything can be on-chain, so it's all traceable, it's all trackable. Based on that, you can have an AI agent attached to this on-chain contract of, let's say, this amount of gold moving across countries. And the AI agent can extract different kinds of information to report at different jurisdictions as they cross borders. That can make trade finance of the physical movement of goods very efficient through tech innovation, through tokenization. And then trade finance becomes a whole thing that helps ease the movement of flow of funds across these countries. And I think as much as we have traditional digital or like online money that's around, digital assets with the programmability can be a very, very big push in this space. And I'm really excited about that. And that is one of these innovation pillars.

Lisa JY Tan: 22:24

The two other innovations, oh, there's two innovation pillars, AI and tokenization. I think we have quantum in place as well. There were some central banks coming together to talk about AI tokenization, quantum as key pillars. So just go back to you, Anthony. How are these quantum AI tokenization covered in the context of Central Asia? How is how are the governors of the central banks thinking about this?

Anthony Howe: 22:46

Yeah, so I mean, bringing together dialogue like that where you put some of these future-paced concepts up for discussion with the likes of central banks is a really interesting exercise unto itself. You know, we we had a fair amount of work on our hands to just work with the various departments in in the different central banks around what they what their frame of reference was on those particular initiatives and how they wanted to address the question. And if we had the luxury of um a video on this podcast, I can show you where that, I could show you where that dialogue ended up, which was in the opera and ballet theatre in Tbilisi.

Anthony Howe: 23:25

And so if you can imagine this spectacular building where some very sort of thoughtful intellectual minds are coming together to do a dialogue about how those um new concepts are going to be dealt with in a collaborative fashion, it was really quite special. And I guess that that side of it was really interesting to me, but also just the the the some of the basics. Like Georgia processed about 4.1 million tons of cargo in the last 11, oh, sorry, in the 11 months of 2024. And that stat just stuck with my mind the whole time because that's a 63% increase on what they've been processing previously. And it's because of a huge amount of volatility in that region. You've got population shifts going on because of the wars in the region and China stuff happening. And so that trade route isn't is not just a like a concept. It's a it's a living, breathing thing that's undergoing acute change at the moment. So therefore, things like ways of doing things faster really, really matter. They're not going to impact just an incremental change. They're literally going to help make sure that the growth can be sustained as opposed to just falling over. So traditional systems just won't service the kind of growth that is underway in that region. So you need to be thinking about AI as a cost of entry to the party.

Anthony Howe: 24:58

Y ou need to be thinking about the processing power and the variance that's possible with quantum compute. You need to be able to have tokenization as a base layer in terms of how things like a trade finance asset might be originated. If you if you think about those transactions that was responsible for the 63% increase, and have a think about the the kinds of systems that those trades would have had to transact on in 2024. Imagine if every one of those transactions had embedded instant settlement within it through some uh through stablecoin instruments or some of the things that we're talking about at the moment. The market for innovation in various parts of the world tends to shift and flow. In this particular region, it's highly acute.

Nikhil Joshi: 25:46

Hey, Anthony, can I can I ask you a question? What what what's the thinking in that part of the world around trade currency? US dollars or or is it something else?

Anthony Howe: 25:55

So certainly lots of talk about tokenization as a trade instrument. There's a a growing understanding about the fact that the instrument of stable coins is something that's gonna service a B2B market, not necessarily a retail market first. And to that end, a trade currency that might be a stablecoin-backed instrument. There's lots of views about what what the presiding stablecoin is going to end up being. But I would say there's a very there's a pretty decent mature understanding about how that type of instrument is going to work for unlocking some of these trade flows, even today. The stablecoins panel and round table that that we ran in Georgia was like very, very popular. So it was like jam-packed with uh both audience and speakers. And we also heard, I guess, quite a number of like mature and well thought through use cases around how those instruments are going to help address both private market use cases, but also this public-private collaboration that needs to take place.

Anthony Howe: 27:03

So regulators need to support the existence of these trade currencies, as you call them, in order for them to exist beyond a particular sovereign. So, for example, if you wanted to have a trade environment that existed across the middle corridor with all of those nations, from a regulatory perspective, it'd be a really good idea for all of those central banks to get together and support that kind of initiative. Um, as to picking which instrument is going to be the right one, plenty of macro trends playing into that at the moment, and lots of sandboxing already underway in all those countries in terms of how that looks. Everything from CBDCs through to the USD backed things through to uh proprietary instruments that can be issued as well. I wonder if that answered the question.

Nikhil Joshi: 27:51

Yeah, well, I was thinking about the underlying currency. Is there a is there a you know I I would guess right now it's it's still predominantly US dollars. Is there talk of it moving away from US dollars to something else? And then uh and then past that, the instrument, because you mentioned stable coin, but you also mentioned quite a lot of talk around CBDC. So would that be is there any thinking around wholesale CBDC versus retail CBDC So I guess I've now turned it into two questions.

Anthony Howe: 28:18

Yeah.

unknown: 28:18

Yeah.

Anthony Howe: 28:19

Well I'll I'm I'm the um I'm the balanced moderator and Lisa's banging to answer this question. So you go.

Lisa JY Tan: 28:25

Yes. Let me so I've spoken to a few central banks and I've spoken to a few commercial banks and a few people on the ground. So I'm coming from the perspective of me doing a bunch of primary research in the area. So there's a huge dollarization in in the space. So it's a big problem because it means going from one currency to dollars, dollars to a secondary currency. And you just lose a lot along the way. So that's why they want to have a more efficient payment, cross-border payment across these countries. So we have seen Kazakhstan launching the stablecoin with visa, I believe, a couple months ago. And that is one of the first big stable coins in in the region. And Kazakhstan is a is a quite a big population and they're quite a big country in the region.

Lisa JY Tan: 29:08

Georgia actually explored stable coins about two years ago. Cardano was in talks with them as well, and it was interesting because so was a kind of like a mandate by the central bank to start exploring exploring stable coins. Ripple got the contract and Ripple was working with them on it. It lasted for a year, and then everything stopped because they were still quite uncertain about stable coins. I think Uzbekistan, so talking about the dollarization, it also means that payment rails are primarily in Swift and they're quite expensive and they're quite time consuming. Uzbekistan, as I mentioned before, they were quite a closed country. They only started to open up in the last 10 years. What they've done in the process was to develop their own payment rail and payment system within the country. So they have this, I don't know what it's called, but it's a sim similar thing to Singapore where you can use the QR code, you can scan and you can make payments across bank accounts, which makes it makes it very efficient. And that's what they have. And they're trying to expand across the country. One of the other things that is also around, so other than the USD rails, you also have the Russian rails. And that is something you can find in Georgia. I don't know what they're called. It's not Swift, but it's basically how you how you transfer rubles. And that is another another aspect, but because of this huge currency instability, that's a bit can be a bit costly to always make payments in rubles.

Lisa JY Tan: 30:24

So I think it's interesting to look at tokenization as an opportunity to allow for efficient cross-border payments. Just like what Singapore is, I think Singapore's Project Blossom is only starting. And I believe we're looking at atomic settlements between central banks. You know how Singapore, Singaporeans with a Singapore bank account, you go to Vietnam, you go to Thailand, you can make payments in the local currency with your QR code, and it goes from bank to bank immediately. And all of this gets settled at the end of the day, and you can do atomic settlements between central banks to do your cross cross-currency payments. That is quite interesting, and I think that's something that they could definitely explore. But the market isn't mature enough, so there's quite a lot of things to do. You've got to start as one little big steps.

Anthony Howe: 31:08

Certainly with the onset of the Genius Act, Nikhil, um, there is at least a current day indexing towards USD-backed staples. That's, you know, that's a huge tidal wave of support for that technology that's been unlocked with that legislation in the US, and it's having a a little bit of a halo effect internationally. One of the questions we raised on the round table was are we automatically now becoming too US centric without thinking about how these instruments are going to be backed? And I can't say that there was a reasonable definitive point of view that arrived, that was arrived at from that dialogue. And we had some serious experts around the table. And so I think the jury is just still out. But I don't think you can discount the the watershed moment that the Genius Act represents and how it's literally legitimized that category in traditional finance institutions almost overnight, when this time last year it was still, as Lisa was pointing out, something that was unsure, hard for central banks to support because it just didn't have the the gravitas. So yeah, it's a it's a long-winded way of saying maybe it's going to be USD backed Nikhil, but um I think there's plenty of things to to look at at the moment.

Lisa JY Tan: 32:27

So sorry, just one more point and and and I'll stop. So one of the things that I've I've noticed, we're speaking to a lot of people, and there's a big difference between American experts or American educated uh locals that I speak to versus local locals that I speak to. One of the catalysts of why things are starting to move this year is thanks to Donald Trump's uh election. Before Donald Trump came in, there was a huge US involvement in the region, like huge. But about 10 months ago, things started to to be pushed back and and the US influence has decreased quite significantly. And I can s and that could perhaps be the catalyst of them trying to be more independent, trying to small more like small countries coming together to become a big region. So a big region of 200 million people having their own payment system, payment rails, easy to do cross-border within this region, is very, very powerful given the reduced reliance in US. And I think that is probably a very interesting catalyst that we're seeing this year starting now.

Takatoshi Shibayama: 33:24

I think it also depends on like the saving habits of people. So if I take LATAM as an example, as I mentioned in previous episodes, that Latin American people tend to save in US dollars. So if you go to like Argentina, Uruguay, et cetera, a lot of the more high value stuff are priced in USD as opposed to their local currencies like real estate, cars, et cetera. I do wonder like what would be the common denominator currency or commodities that people actually save. Like some other countries actually save more in gold as opposed to local currencies or US dollars. If Central Asia has a tendency to value gold over other assets, that could be some point of exchange as opposed to using US dollars, right? Let's say you change from whatever currency there is in Georgia to gold, gold to Kazakhstan's currency, um, or something like that. Or, you know, since we're talking about crypto, I mean, why can't it be Bitcoin or or some other um potential uh cryptocurrencies, right?

Takatoshi Shibayama: 34:24

So I think the de-dollarization is natural to happen, I feel like, because you know, we're heading towards more into a multipolar world where US hegemony is not the only prevailing uh power in this world. It's it's better to diversify our how are you saying, the currency dependency. And especially for like a region like Central Asia where it's sandwiched between European powers, Russia, China. I think it makes sense to have something of their own as opposed to, you know, pegging it or not pegging it, but like kind of standardizing it to a currency that's far away, half around half a worry.

Lisa JY Tan: 35:00

Yeah, completely agree. And I think we're seeing we're starting to see the de-dollarization begin. I bought a piece of art and they were pricing it in USD, and I wonder if in the next two, three years we'll start seeing it price in the local currency or even potentially in CNY. Because China is also starting to, you could see a bit more Chinese influence coming in. They just bought a port, they just made a brand new highway, which makes it easy to travel within within the country, and you save like 50% of the time. Quite interesting to see how the the region plays out, and we're still in early days.

Anthony Howe: 35:34

I think the one of the other metrics that really stood out to me from dialogue up at Tbilisi was just that basic high-performing entity in that region of Georgia and just low inflation. And if you're trying to build credibility as you grow a region, if you can say that year on year, for the last 10 years, you've been able to keep growth consistent and you've been able to not debase your currency too much, internationally. That's kind of like a high achievers club. And some of that, some of that kind of basic discipline is actually what's required to start forming the basis of a leadership position. It's not something that you can launch a new currency that's going to be the globally adopted standard straight away, but it's the kind of behavior that allows you to have some credibility if you do want to do something different. And that might be something as small as just introducing a USD-backed stablecoin as one of the instruments that you used to that you used to trade with. But it could also lead to other instruments as well. But you have to start with that basis of trust, particularly from the central bank level. And I think that most of the central banks around that region are are trying to do a good job of that, and Georgia can really demonstrate it.

Takatoshi Shibayama: 36:49

I love that you're we're all shilling uh Georgia today. How do you actually create because it's interesting, I mean, everywhere around the world we're seeing inflation, and Georgia is not seeing inflation. So is there something that they're doing a little bit differently in terms of supply chain, or maybe they're a lot more self-sufficient in supplying their daily needs? I mean, how how do they really sustain that low inflation?

Lisa JY Tan: 37:14

I think the country is just not as open as they're not traded as internationally, and they're just starting to open up. For example, in Singapore, we've got PAVE Bank that is based in Singapore but got its license, its digital bank license in Georgia. And I think we'll start seeing a little bit more money flowing into Georgia, and that could be there will be a new, like uh a demand, a demand driver to see inflation growth. Right now, there isn't as much economic activities, as much as there there is a lot of natural minerals and they're trading across there, there isn't that much international trade going on yet, compared to, say, you know, like the US or Singapore.

Takatoshi Shibayama: 37:51

Is this some some something similar like in Southeast Asia where you have stable governments and relatively stable inflation? Because if you had to compare it with Africa or Latam, it's a different economic backdrop, right? Whereas like in Southeast Asia, after the Asian financial crisis, the currency has become a lot more stable and the monetary policies have been quite stable as well as uh inflation as well. I mean, it it does seem like it's a model that maybe Central Asia can take from Southeast Asian countries as opposed to the other developing regions.

Lisa JY Tan: 38:24

From some movers and shakers that I've spoken to, one of the things that they're looking, they're looking at a little bit of a bigger picture. So Georgia now, because Georgia is small enough, they only have a population about 3.5 million people. And so it's small enough and it's nimble enough to start capturing new opportunities. And one of the opportunities that they're preparing for is the war ending within in Europe. So the Ukraine-Russian war. Because they want to get the infrastructure up and ready so that once the war ends, a lot of a lot of trade can pass through and flow through um the country. From what I understand, there are like three different routes. The Silk Road is not just one road. There's there are a couple of different routes that you can pass your goods through. And there are three routes. One is the the Russian-dominant route, one is they call it like the US proxy, which is like quite US heavy US presence, and then one is the one that Georgia wants to start building as a credible route for goods to pass through. And so if the opportunity is right now and and they're trying to move towards that.

Lisa JY Tan: 39:21

Politics-wise, yeah, speaking to a lot of people, I was there for two weeks, so I spoke to a lot of different people. Politics-wise, there has been a uh what's it called? Like a protest against the current government for the last one one year. In fact, they just celebrated the one-year anniversary last week. So the government has been in in charge for the last 12 years, and but the people are protesting against them right now, claiming that they are like puppets of Russia. I don't know the the things because different people are telling me different things. So, in some sense, there is some stability in the government because it's been 12 years, but the people aren't happy with them. All right, super. As we're coming to the end of our podcast episode this week, maybe we can go around to just talk about one takeaway that you've you've had from this very short conversation.

Takatoshi Shibayama: 40:07

Drink Georgian wine. Definitely like to try that. But yeah, that definitely the take a takeaway is that it seems like it's a it's a growing region and which is influenced by a lot of you know superpowers around the region. And for me, it feels like it needs to have some kind of protection against the changes uh within those kind of superpowers around. And because you know, China's growing Russia influence may be unstable, and uh there's obviously a lot of US influence as well, but like it needs to have like a certain hedge. Maybe, you know, to me, it feels like it might need its own type of um how to say centralized currency or some exchange currency that is not influenced by these superpowers. And that might be Bitcoin or it might be gold or whatever it may be, but it feels like they will need something of its own um to keep the region as stable as possible.

Anthony Howe: 41:03

Yeah, I think I think that stability is definitely on the way. Um it doesn't take long to meet some of the folks in that region to s just sense the the high intent around getting that piece right, Tucker. And I come back from our experience in Tbilisi with a quiet resolve around the fact that it's not really whether Central Asia's gonna grow. That that's obvious. The statistics are there, the sentiment is there, but it's just one of those situations in time where you've got to decide whether you will be a part of that growth and how you will do that because there's lots of interest and hunger almost in terms of collaboration. That that they those regions definitely want to partner with the models of Southeast Asia or the West. But you have to get to the detail end of what that collaboration looks like and kind of take it on yourself to get a little bit more involved. And it's a complex environment. It's not a straight-in walk-up, you know, you can just kind of do anything you want there. There's lots of problems to solve in that part of the world. But the growth is kind of a given. You just have to get a little bit more deterministic about how you're going to approach it.

Lisa JY Tan: 42:21

Yeah, for me, just like how we see China leapfrog and completely go from cash to mobile payment, completely ignoring credit cards. I can see Central Asia going from cash-based society and simple banking to the whole tokenization to allow for trade flow between this cross-border trade flow in this region. Because tokenization or blockchain helps with this aspect. There's a real need to use blockchain for transparency and tracking and traceability. So I'm quite excited to see how this is going to grow. Yeah, if anyone is interested, definitely check out Singapore FinTech Week next week. I think there'll be quite a few Central Asia people and representatives there. Otherwise, book your flights to Georgia, drink a lot of wine, and have lots of fun there.

Takatoshi Shibayama: 43:05

Nice. So thank you very much all for joining this podcast episode. And thanks for listening in the audience. If you like what you hear, give Blockcast a like and subscribe on Spotify and Apple Podcasts. And for all your juicy web 3 news, keep updated on blockcat.com.