Universal Access to Central Bank Digital Currencies | Co-Pierre Georg

Many humans on our planet remain DIGITALLY excluded. Those who are excluded can be limited or unable to participate fully in society. 

This divide between those with digital skills and those with barriers to access and use continues to widen. Co-Pierre George, who holds the South African Reserve Bank Chair in Financial Stability Studies, and his talented team at University of Cape Town, see this as a call to action for innovative products and services that close this social and economic gap. In the last year, these XRPL Grant winners developed Nautilus Wallet  which provides universal access to digital rights assets without needing a smartphone. 

This episode leads us through a start-up experience of solving challenges of financial exclusion. 

This concludes our Season 4. We will resume with Season 5 in the fall. Special shout out to THE WEBBY AWARDS for honoring All About Blockchain as the best of the internet!

Transcript

Lauren Weymouth (00:00:00):

I am Lauren Weymouth your host of All About Blockchain. And we're closing this season with a very important topic of financial inclusion. Have you tried to abandon your iPhone for a day to commune with nature or spend focus time with your family? I don't know about you, but I start to itch. The internet and digital tech is at the heart of how public economic and social life functions. And we're clear, it has transformed how we communicate, how we work, entertain, consume, and access public services and basic info. So integral to all aspects of life. But the spread of access and use is uneven. And many people remain digitally excluded. Those who are excluded can be limited or unable to participate fully in society.

This divide between those with digital skills and those with barriers to access and uses continues to widen. It's a call to action for innovative products and services to solve this challenge and to close the social and economic gap. Enter our guest today, Co-Pierre Georg, I'm gonna brag about him because he is super humble and won't do it himself. And I want you to listen with intent.

Co-Pierre is an associate professor in the School of Economics at University of Cape Town, where he focuses on financial technology and teaches courses like FinTech and cryptocurrencies. He has held visiting positions at many US schools like MIT, Princeton, Columbia, and Oxford in the UK. And if you like what you hear from him today, and you wanna brush up on your own FinTech acumen, you can find several of his courses on Coursera. I work with him as part of Ripple's University Blockchain Research Initiative. And he's also received awards from Algogrand Foundation, The European Central Bank, and Volkswagen Foundation, to name a few. He holds the South African Reserve Bank Chair in Financial Stability. Welcome Co-Pierre.

Co-Pierre Georg (00:01:52):

Hi Lauren. Uh, great to be here.

Lauren Weymouth (00:01:55):

So you and your team have been busy conducting research on Central Bank Digital Currencies, focused on offline payments and financial inclusion, privacy considerations, and interoperability. You've generously donated time to educate policy makers on CBDCs. There's so much to unpack here today, but we'll focus on your spinoff company, Nautilus, diving deep into the solution you've built that will benefit the digitally excluded, those without smartphones. 

(laughs) And joining us is your master student, Titose Chembezi, who serves as business developer for Nautilus. Welcome Titose.

Titose Chembezi (00:02:28):

Thank you, Lauren. I'm excited to be here.

Lauren Weymouth (00:02:31):

All right. So before we ask you both how you make digital wallets for the digitally excluded, Co-Pierre tell us about your work that has led you to privacy as a service.

Co-Pierre Georg (00:02:41):

We started about four years ago to think about the change in the financial system. I was at a Quant finance Institute at UCT that was sponsored by the big banks in South Africa. And because we had this really close relationship with them, we were hearing more and more that there's this big shift coming and the banks aren't quite sure how it's going to look like that, but, but they know that they have to get different kinds of students. So they approached us and said, "Look, we really need students who can solve complex problems that you can put in front of a computer and from day one, they can be useful. And that know about AI and blockchain. Can you do something like this?" Because even internationally, there were very, very few programs, that focused on this. And in South Africa and Africa, there was just nothing.

So we went to think a bit about, what do we want to do? And we created a masters in financial technology, that focused on FinTech in Africa, taking the African lived reality that we experienced in, in South Africa and try to turn this into something that can help, the industry transform. And we started by analyzing that the biggest obstacle to this transformation is the lack of skills. So we set out to create this, this big agenda on how do we create the necessary skills. So we started from, we need a master's program because it's really the top level skills where students actually go out into the world afterwards and really make their mark.

We put this together with colleagues from different departments. I teach the course in FinTech and cryptocurrencies, and then we realized, well, okay, if we do this, then what kind of students do we want to include? And we decide, okay, we want students from all kinds of walks of life and with different backgrounds because that's what's going to be needed in the future. You don't just want your finance majors, or your MBAs or whatever, you want really a mix of students. So it's a big disciplinary degree. and to make sure that everybody has the same comparable sort of skill set, even with a diverse background, we started creating a whole bunch of online courses on Coursera that we put together just to make sure everybody comes in knowing the basic things.

So when we started the program,we got hundreds and hundreds of applications. When we launched the program, my secretary was literally on the phone for three days, yelling at people that we don't need their money and they should just go away because we couldn't handle the sheer like demand for this thing, when you look at sort of UCTS social media stats and, and sort social media stats in South Africa, you see around our announcement a big uptake in the use of Bitcoin and crypto on Twitter in, in South Africa, just because I think we've hit the point exactly right when we launched this.

And because there was this huge interest, we get hundreds of applications every year. And that for every professor is such an amazing blessing to be in that situation, because with all these applications, you can actually select the top students. So we are getting the top students from, from all across Africa. And over time, we've created this environment where they want to strive for the biggest, toughest challenges that the continent has to offer in that space. And that led us to, you know, we need to think about privacy and we need to think about inclusion because the digital divide is actually much broader than the financial divide in Africa.

So there's more people who are digitally excluded than there are financially excluded. And sort of in the crypto space in general, there's not enough work being done on this. So the, the students, and then the, the PhD students and postdocs, and we launched an innovation hub recently with, professional software developers that, that work with us to, to build open source software. They really wanted to sink their teeth into this, big, hairy beast of a problem."Look we want to find a way to give users privacy in this."

In today's world, when you think about Facebook and the Cambridge Analytica scandal, when you think about the academic research that is being done on how Facebook causes the spread of right wing activism and attacks on immigrants in Germany and how they contribute to the genocide in, in Myanmar. It, it really puts you to think, to say, "Well, this, you know, the question of how do people actually keep control and ownership of their personal data is the biggest problem of our time." And in crypto, it's completely prevalent.

Four years ago, we started out and all we wanted to do is put a private key in a smart contract. And it seemed like such a straightforward request. You know, we want to make sure that people can put private information on a blockchain that you can still use it, but it has completely spiraled out of control and led to a like four year and counting research agenda, that we are now slowly but steadily turning from research into,  actual companies that build products that are useful for people.

Lauren Weymouth (00:07:11):

That's the dream, right? Taking what you're learning through the research and actualizing it through real products and services that you can, turn into use by consumers. So it was the Central Banks who told you that there was lack of skills?

Co-Pierre Georg (00:0723):

The commercial banks initially, but the central bank quickly reaffirmed because I, I have a close connection with the South African Reserve Bank who very generously sponsored my chair and a couple of PhD students. You see the same lack of skills in, in central banks in fact, even worse because they can't really pay competitive salaries. They have to address the whole question of crypto differently from banks. Banks just need to compete and survive, and you know, that's tough, but it's doable.

As a central bank, you have to think about creating infrastructure. How do you build infrastructure for this next evolution in payments, for this next evolution in the financial system? And that infrastructure is really hard to build because all the problems that you have in the private sector, you have times 1000 because you need to think about them immediately at nation scale. So central banks are very keen to, to work with us and, and sort of engage and discuss, and we have several collaborations ongoing where we try to unpack these problems.

Lauren Weymouth (00:08:23):

So banks let you know that there was a lack of skills, you went out creating educational programs, which lucky for your admission department, there was a huge demand for, and you're solving the problem of workforce development, right? You're turning out people who have skills in this field. What are some of the key decisions banks are dealing with and trying to address?

Co-Pierre Georg (00:08:42):

I think the main thing banks dealing with at the moment is the uncertainty about how this system will look like. What, what is the infrastructure for the financial system in, you know, five, 10, 15, 20 years, and then what is their role in it? Private crypto has clearly shown that you can innovate financial services without having a bank involved, at least not directly involved or only involved on the periphery. And banks are, you know, they're naturally terrified by this. Change is always bad, the question is for whom, and they fear it might be them that are at the short end of the stick. So they want us to create students who are able to solve complex problems that aren't well defined. That is a big challenge for university.

Our students were always good at learning for the exams and then you put them in an exam and they were doing so well. And then you train them for a job and they would go out and they would get jobs so easily and they would succeed. But that's not enough anymore in a situation where the, the world around you changes so quickly, you need to create students that don't just want to have a job, but who want to create a job and that want to innovate. That mindset really bringing this to the students and enabling and empowering them to do exactly that, that is the main interest from the banking industry was. And we have many students who, who go out and work with banks and, and do so happily, and we have students who start their own companies and over time, they connect with one another and it's really amazing to see what they create out of this.

Lauren Weymouth (00:10:09):

Well, you're molding entrepreneurs, and that's one of the reasons we were excited about having Titose on this podcast with you. Talking about the digitally excluded, it counts for half the population in emerging markets. Tell us about the digital asset wallet you built for this massive community.

Co-Pierre Georg (00:16:28):

When we set out to work with central banks and central bank digital currencies, we quickly learned that one of the biggest challenges is that they want CBDC to be accessible like cash. So cash is universally accessible, you don't need a phone, you don't, don't need anything back a bank account, but everybody has a bank account. But as I said in South Africa, I think over 80% of the population has one. So it's not that we are unbanked, we are underbanked. If you want to take that population that doesn't have a bank account and you sort of study them and you have a look at how they look like, they are low income, sometimes low financial literacy, in most cases, no smartphone. So the solution that we build operates on the assumption that even folks without smartphone themselves have occasional access to a smartphone.

So we created a platform using trust execution environments, where folks without a smartphone can walk up to a taxi operator or spa as shop owner, you know, one of those informal vendors, in townships, in rural areas, can walk up to, to the person say, "Look, I want to create digital asset wallet." And then using the smartphone of the connector, you can sign up, you can create a QR code that, that you get to identify yourself. You set a pin and you get an SMS with two factor authentication to your feature phone. So then you take this account with you in form of your QR code. And you walk to the next sponsor shop owner or taxi driver. You can pay them, or you can pay your friends. And the sponsor shop owner can charge a small commission.

So as soon as you allow the model of having occasional access, all of a sudden you reach everybody in the population, because even if you don't have a phone, you walk into someone who does, and what you then need to do is you need to incentivize the folks who, who have those feature phones to actually open them up and become intermediaries like tiny micro intermediaries, for payment services. Now, the big challenge with this is that you need to give the folks who don't have smartphones, the same kind of privacy guarantees that you give to people who do have smartphones. So for example, that you keep their private keys actually secret, and you don't just promise to them that you keep them secret, but you prove to them that you do keep them secret.

And that's exactly what our technology does. We are able to prove to the users, you know, we don't keep a copy unencrypted or we cannot access  your private keys, but you can still use them to sign transactions on the blockchain, cross border sent money within a country, to wherever you want. And it really opens up the space of possibilities because with trust execution environments, you can do cool functionality for folks who don't have smartphones, including searching somebody by their name or searching by their phone number and then send money to them.

Usually you do need both addresses to do that or there's some central register, like a phone book somewhere, which we don't want because of privacy concerns. So you don't want on a nation state level, you don't want the government to have everybody's wallet addresses. So you want this in a distributed decentralized system and then you need to figure out, so how do I get this functionality? And we found sort of a sweet spot in this privacy, functionality sort of Venn diagram.

Lauren Weymouth (00:13:33):

We can really hear how this opens the door to everyone being included and in a very fair way. It sounds like it's putting the shop owner as the connector who facilitates payments and digital finance for the communities. And I can hear what's in it for them because now they're getting even more traffic into their place of business, 'cause people are utilizing this extra service, so it can help them with sales. Is that kind of a what's in it for them?

Co-Pierre Georg (00:13:58):

Yeah, that's part of it. So they get more customers coming in. They can charge a small fee, which is transparent or we'll show what the fee is. But more importantly, they get rid of cash and cash is not just super expensive in South Africa, the cost of cash is about 2% of GDP, which is about as much as if everybody would suddenly start paying the taxes that they are supposed to pay. it's a huge cost, not to the economy, borrowed mostly by merchants, disproportionately by merchants in the informal sector, because the cart machines that they use traditionally are wildly expensive, so they accept cash.

But now all of a sudden they are exposed to a whole, you know, variety of risks, because there are points of flash cash holdings. So it's not just money that gets lost, it's lives that get lost because of that security risk. So we are helping them to reduce their cash holdings, have more foot traffic, have a little bit of a commission. And what you can do once you have created a platform like this, you can have like store inventory, linked to this and you can sort of make prepayments easier. You can create sales history for those guys so that they can approach the formal financial sector and then get access to credit.

And that's something that people really need to, to wrap their head around financial inclusion is not about access to payments. Everybody has access to payments. It's about access to payment data, to the history of your payments and repayments. So financial inclusion is all about personal data and making it available to credit providers.

Lauren Weymouth (00:15:28):

And can the people using your product license their data for specific uses?

Co-Pierre Georg (00:15:32):

Yeah. So once we started with this very specific use case of universal access to digital assets, we quickly realized that this core technology can actually be used in a much broader context. So we built a privacy as a service platform and that platform you can upload personal data. It's always encrypted. So we don't see the raw data. It always stays encrypted. you can combine your encrypted data with other users' encrypted data and then you can license access to this data to whoever wants access to it. So you can say, "Well, you know, Lauren, I trust you. You can run, you know, this and this piece of code on my data and you can get all the analytics from it. But, I would like to charge you a small fee, and you can run it 17 times and then we talk again." And that kind of licensing access to data without loss of privacy doesn't exist really at the moment but it's at the foundation of how you can create property rights for digital objects, for data. So solving this...

Lauren Weymouth (00:16:30):

And creating a way for user to monitor.

Co-Pierre Georg (00:16:32):

Oh, of course. that's the economist,and me will always cherish that. But it's not just the monetization. it's about self authorship. It's about who are we as humans? Are we exposed to algorithms that sit within, closely guarded companies that aren't shared with the world where we don't know what is put in front of us. And all of a sudden, ou have democracies being affected and, people voting, on the margin for a candidate that, wouldn't have been elected otherwise. It's not just about being able to monetize the data it's about being, being able to be free.

That really is a challenge at the moment with the current data paradigm that we have. So with our solution, it's possible, we think to create a different kind of paradigm where users are not just in control of their data, but where they own it. And if they wanna monetize it, I mean, you know, happy for them, but you can also give it away for medical research, but you can say, well, you know...

Lauren Weymouth (00:17:22):

Right. You're really opening doors. Yeah. You're really opening doors and creating new possibilities that don't currently exist. Titose so here you are a business developer at this new startup Nautilus, tell us about your role and how that's been for you?

Titose Chembezi (00:17:35):

When I joined, I really believed in the vision of the company, because I think it's important that as central banks are designing their, CBDC that they should have the solution that's going to help people from the low income sector group. one of the key features about The Nautilus Digital Wallet is that, it's able to help people that do not have smartphones, be able to create their accounts and transact, 

The experience has been rewarding because we deal with, a variety of clientele from central banks to banks. and that's the top tier, but we go all the way to working with sponsor shop owners,in our pilots and making sure they're involved in the whole process in how we are developing our solution because it's meant to help them and make their lives easier and be proud of the whole process. On one day I could be in the streets in one of the townships in Cape Town and the next day, like in February, we attended a conference the Digital Currency Conference, held in Washington where we won the financial inclusion award for our wallet.

Every day is quite different and I like that variety. It's kind of like with the middleman, making sure everyone is involved in this design of the future of finance.

Lauren Weymouth (00:18:51):

Okay. You kind of touched on some distinct characteristics of working in South Africa. Only about 3% of our audience on this podcast comes from Africa. So I'm sure Europeans and Asians, North and South Americans and friends from Oceania would find it really interesting to hear any special circumstances unique to growing a business in South Africa. Can you share some stories?

Co-Pierre Georg (00:19:11):

Titose, do you wanna go first? (laughs).

Titose Chembezi (00:19:13):

laughs), uh, I think I'll finish off (laughs)

Co-Pierre Georg (00:19:18):

...We can start with load shedding right now (laughs). So, because our electricity company was captured by friends of the former president, it is in the dismal state and electricity supply is regularly down and it's, makes it really hard because whenever this happens the normal cell towers tend to go down. So you can't even go on 4G or whatever to have meetings. So meetings are scheduled around load shedding, and since Load shedding isn't plantable, you have a weather forecast and you have load shedding forecast. So that already makes it challenging for a company like ours that is a hundred percent digital. then there are physical issues.

We had a meeting with our head of operations, that we wanted to schedule at a certain time. And she said, "Well, you know, that time I can't do it because I have to mend the barricades." But as it turned out, we had large riots in South Africa, where over 300 people were killed and it was concentrated on an area where she was living and they were actually putting up barricades and there was a shift schedule. And then you had to mend the barricades and that you had to make sure that no looters would come to your town. that's just the tip the craziness mountain  that you experience in South Africa.

You have to deal with the department of home affairs, which is erratic at the best of times, where you just struggle to get work visas for students, even if they're highly trained, exceptionally well qualified from one day to the next our minister now decided that students who have a degree from a South African university are no longer eligible for a work permit afterwards.

And was decided one day to the next, without any announcement, So all of a sudden you sit at the university and, you know, all the students who came, hoping that they could work here we spent billions of rand on educating them and then we, send them on a bus back home to where they come from and that's it. 

Lauren Weymouth (00:21:02):

Is there anything you wanted to add Titose?

Titose Chembezi (00:12:04):

So Co he touched on the broader items of what the problems we experienced in South Africa and I will bring it back home within our startup especially since we catered to the low income sector group, we started off with a study and trying to understand how they move money. how the migration issue currently is in South Africa. And the thing is you could spend 30 minutes in trying to just explain how you could help them with things like cross border remittances and helping them with payments- how the agents that we want to work with can facilitate services for people in their community.

As you mentioned at the beginning of the startup, like financial literacy is low in these sectors. So you have to spend time as well in educating them. that has been perhaps a struggle it is also been rewarding because it has really enlightened how we could be more specific in our development to cater to this community.

Co-Pierre Georg (00:31:27):

I mean, in a way we are privileged to be in a position where we are because Cape Town is, a fantastic place to live and to work and everything. And we do have a very,, broad community here with people from very different ways of life, with very different means. diversity is actually a huge asset because we can just go to townships and directly talk with the folks and figure out, what they need, what they want. I always say Africa is a laboratory for the future. And that's because in Africa, the cost of remittance payments is so high that it's really important to develop solutions to bring this down because it's just for intra-African trade and just the intra-African economy. It's such a massive part. Sending money across borders, which physically is really, really dangerous.

You can't go to Zimbabwe with a bag full of money, just because you want to send it to your folks back home. So you have to find electronic ways of doing that. And that has always put Africa and South Africa in particular, in a position where we have developed a lot of different remittance solutions. and these solutions have to be at very, very low cost. Now in the digital economy where you have all kinds of digital objects that are abundant because they can be copied almost for free, to create an economy on top of this system, you do need very, very low value, no tiny micro payments to underlie the transfer of digital objects and the creation of wealth in the digital economy. So in Africa, we've gotten used to dealing with like tiny margins and trying to find the cheapest possible solution that works at scale.

And that's going to become more and more important as we move into the digital economy and as this digital economy sort of is evolving. And as you know, data becomes more scarce because blockchain enables this and non fungible tokens are an example of this. You know, you had this object that could always be copied freely and because it has infinite supply, it has a market price of exactly zero. And suddenly somebody says, "Well, you know, this Michael Jordan shot in the game against Utah Jazz, let's, let's mint an NFT for that thing and make it unique and sell that unique copy rather than the infinite copy version." And suddenly it becomes a mark then you have a price for this. And as this is emerging, these low value payments are really crucial to create the digital economy. So we are a little bit ahead in that sense and we shouldn't be too shy to tell the world that they can actually learn something from Africa.

Lauren Weymouth (00:24:29):

Well, you're speaking my language. It's why I'm so proud to work at Ripple, right? Our mission statement is that we provide crypto solutions for a world without economic borders, right? And we've very much focus on remittances, making sure that people can send home money, cross border that costs less, takes less time. So it's faster, cheaper, more transparent. But going back to what you were talking about earlier, so in South Africa, there's riots, there's energy outages, there's hiring barriers, there's not enough work being done on catering to low income sector and an incredible amount of education needed to get that sector up to speed. You still have been moving along your company at a very fast pace. When did you actually found Nautilus?

Co-Pierre Georg (00:25:17):

We started in October, 2021. So about, six, seven months ago. It came out of a lot of research that we've been doing before. So it didn't just, you know, fall like mannah from heaven and we just had to stand there and collect. That was actually a lot of work by lots of people going  into this beforehand, thinking about specifically privacy as a service. Like what do we need to give people privacy? This four-year-old question?

Co-Pierre Georg (00:35:38):

How do I put a private key in a smart contract that really guided us along this path to say, well, if you can build a solution that, that allows people to use their data and license it to others, commercialize it if you want but retain their privacy defined as the ability of individuals and groups to define for themselves how information about them is used by others. That's sort of the political science definition of privacy.if you want to create that what do you need to put in place? So this, this research has, has fueled the company. We started it and we were exceptionally fortunate in, in a variety of ways.

Finding the right people and then finding the right partners. I'm the CEO of the company, but I'm basically, unnecessary, which is the best possible kind of, of situation because we have a great team. We can actually build these things that we in a big community effort fought through for years and we could just sit down and say, you know this is what we wanna build. Let's just go for it. Like people built the internet back in the day.

But then the other piece is having partners and even though this is Ripple's podcast, I won't be shy to sort of praise Ripple for the role that you guys have played in helping us along the way 

So starting with UBRI as a partner that has always been very important to us because it enabled us to provide bursaries, to give students the ability to just stay on a year longer.

And then in the next stage, doing the hackathon we won the UBRI hackathon with our solutions of helping us, with internal deadlines. You know, it's always good to have that deadline to say, "Look, we need to really hit this and we, we wanna hit it well." then moving forward from the hackathon into a grant. So we got a grant from XRPL Grants to develop this further. That was like two months of runway for us that we could use where we didn't have some  investor breathing down our necks, you must do X, Y, Z. And instead we could be free to go for the infrastructure style solution and really focus on building this thing in the way we wanted it to.

And then go back to, to reply afterwards and say, "Well, look guys, what we've built, we know that for your CBDC projects, this actually solves a real immediate pain point for you. Why don't we partner up." And then being sort of through this partnership, forced to go through a professionalization phase, oh, here's your due diligence, please send it back to us. And we wanna do this end of Q1, can you make that? That really helps us as a company to get our house in order and to make sure you put all these things in place. And that helps you with other interesting, projects and it helps you with other partners coming in. So that was really for us. It really was fantastic.

Lauren Weymouth (00:28:19):

Well, thank you for saying all that. And just for our listeners, what Co was referring to is this XRP Ledger community life cycle, where there's support for new use cases coming up, being built on the XRP Ledger, starting with a hackathon, moving into as you progress and develop further, an entire grants organization. And then if you really have traction, the enterprise can actually adopt, and pay for your product or service in, some of the solutions that we're building out. So we have a CBDC team that is in a sandbox with some countries, building out solutions and using your digital wallet as part of that.

Titose Chembezi (00:28:58):

Just to add on top of what Co said the impact of what UBRI has - I'll just like to put the disclaimer out there that today I'm working with the startup that's making sure we cater to the people in the informal sector and that wouldn't have been possible hadn't I got a bursary to do my masters at UCT. So I get to play my part in uplifting my continent because of that investment.

Lauren Weymouth (00:29:25):

Well, there's nothing more powerful than that. Thank you for sharing. So you're building on the XRP Ledger. Why did you choose to use the XRP Ledger? what are the benefits of building on the XRP Ledger that you found 

Co-Pierre Georg (00:29:37):

So if you want to build CBDC solutions, you need to think nation scale. if you think nation scale, you do a quick back of the envelope calculations, how many transactions per second do you need for that? As soon as you do that, the number of potential blockchains really get narrowed down to a handful. I mean, luckily this number is increasing but it's, it's still a handful. The connection we had with Ripple was always quite deep because Coil as a Ripple spinoff has a Cape Town office. So when we started our program, we already had discussions with the Coil team sitting there telling us this is the XRP Ledger.

And from the beginning, we included it in our teaching, early on, we spoke about Bitcoin, and Ethereum obviously, but we always had the XRP ledger as the third example. So because we created skills in that space, it's very easy then to choose a blockchain. But the key thing is the scalability and the interoperability, which is, in the mission statement which really is important. If you don't just wanna build a product and that's the big difference, we don't wanna build Facebook. We want to build the internet. And that means you need to work with technology that enables you to do this.

That doesn't try to create a closed loop ecosystem, that doesn't try to lock you in. That instead enables you to do the things that you want to do quick and easy and dirty sometimes. And it still works.

Lauren Weymouth (00:30:56):

Titose, how have you gone about educating yourself on blockchain and bringing yourself up to speed to feel comfortable working in the space now?

Titose Chembezi (00:31:03):

My background is in traditional finance, and when I finished my studies, it took a bit of time to actually find a job. So in between that time, I thought about what I could do to use my skills. And there was started competition that is the Southern Africa Development Committee, they released a FinTech competition where you could submit ideas. I thought about a solution and I submitted it. I tried to look for a co-founder to build out the solution. As anyone can attest running a startup is quite difficult. I learned a bit from that and then I decided, you know, what I would like to learn the technical skills myself.

I Googled FinTech programs and I found the specific program at UCT It was such a steep learning curve, and I took every single opportunity there was available to learn as much as I can. 

As I progress in my masters, we also had the FinTech and cryptocurrency course with Co and that was a really a good treat to end off the program. And then from there, I actually worked on a project with one of his PhD students on trying to send value through SMS, especially since looking at the low income sector group they don't have access to smartphones. And we pitched our solution and won 150,000 rand from the University of Cape Town. So if you like observed my journey, it has been from the start that I've focused on trying to help the low income sector group. In various ways, I've thought about how to help them. It's been a real testament working at Nautilus because not only is it after I've trained up with skills, but I think having the leadership of Co has been really, really grateful because he's had a wealth of experience from this industry. I really hope to see our startup scale because we could do more than in South Africa, there's a lot more countries that we can help.

Lauren Weymouth (00:32:51):

Well, we can hear the passion in your voice. And I really believe that the future is your oyster. It's funny because Co told us at the beginning of this episode, that it's not enough just to educate people, that you have to empower, enable entrepreneurship, and you are a leading example of his efforts in this. You've also noticed that the University of Cape Town helped fund some work. How else has the university backed your startup or been instrumental in providing support for future initiatives? This is one startup Nautilus, there might be others that are coming up and out from other PhDs,  looking to graduate and start their own businesses.

Co-Pierre Georg (00:32:28):

UCT has a good history of supporting startups. They invested in Nautilus, very early. At a stage where we couldn't get other investors because there was nothing, but the team and venture capital in South Africa is exceptionally scarce. There are a handful of VCs, very, very few of them know how to invest in FinTech companies, none of them will invest if you don't have revenue. 

They helped with filing a patent. We filed the first patent from the economics department for our privacy as a service protocol based on, trustless solution. And, they have helped us go through this process, which is painful, and long, and difficult. So all of this has been navigated with their help. 

The main thing is having reliable partners around you that can give you legal assistance sometimes, point you to the law firm that you should contract when you want to draw up your company's documents. Or if you have to try to figure out how the insane South African labor law works, like how do you appoint people? It's actually difficult. There's a whole song and dance that you have to perform to do this properly.

So that all was helpful and being modest in what you ask in equity in return. Some universities especially in Europe, the tech transfer offices, they quickly ask for like 10, 20, 30% equity and that can make a company uninvestable. If you at a university, have a discussion with your TTO and try to convince 'em that a convertible note is actually the better way to finance the startup, because it actually makes sure that you can still raise the necessary funding to achieve the scaling that you need. And FinTech does work different The funding that we collect goes into scaling, and that is usually in the interest of investors. 

Lauren Weymouth (00:35:10):

That sounds like really good advice. Speaking of investment- Are you continuing to fundraise?

What's the next step for scaling?

Co-Pierre Georg (00:35:17):

It feels like perpetual fundraising. Because we've scaled quite a bit in terms of revenue, but also in terms of projects and what we are putting together for partners. we are in the middle of our next fundraising round and we have commitment from South African venture capital firm interest from some overseas firms that would enable us  to go really to the next level and turn this proof of concept that we have for the general purpose privacy as a service solution, into a proper MVP where we want to go out and we want to work with researchers who have like highly sensitive personal data that they want to work on in the medical field, for example, and they really struggle with being unable to combine it and then doing analysis on larger samples. So in my mind, that is an immediate application of what we do, because we can give this privacy guarantee, it's not just, we promise we won't look at your data, no, we can prove to you that we don't have any back doors into the code, there's nothing that we can do to override your, your privacy protections. So bringing this to market this year, that's sort of the big goal. And for that, I think we are always looking for more funding to accelerate this. 

Lauren Weymouth (0:36:27):

There are many custodial wallets enabling people to own while they don’t possess their assets.

You built one with a primary focus of allowing people without smartphones and computers to have access to blockchain technology, such as the XRP ledger. Your system is uniquely positioned to solve financial inclusion, especially in the CBDC space, but it is applicable for private crypto as well. We applaud you for your blockchain for good use case and for being pioneers in the space. Thank you so much [inaudible 01:00:33].

Co-Pierre Georg (00:36:56):

Thanks a lot for having us and for showcasing the project.

Lauren Weymouth (00:37:00):

Listeners, I hope this was inspiring and you got something out of our conversation. We know you can spend your time in a million different ways and really appreciate you spending it with us. This is a wrap of season four of All About Blockchain. We'll return after the summer to introduce you to more talent doing deep dive interviews on blockchain use cases and breakthroughs in the space. Until next time-