Currency for the future
PNG entrepreneur’s push for Bitcoin
Ayoung Papua New Guinean entrepreneur is bringing Silicon Valley to Papua New Guinea to help boost financial inclusion in the country.
Shane Ninai, managing partner of Day One Investments, is encouraging the use of the virtual currency, Bitcoin. “For the first time in history, we have the technology to bank the unbanked,” 25-year old Ninai says.
With only 20 per cent of the country holding bank accounts, PNG is an ideal place to create an alternative low-cost banking system, he says, but notes it is likely to take up to 10 years before the technology will become fully mainstream in PNG.
That technology is built on two emerging, internet-based platforms: the Bitcoin virtual currency and Blockchain, which manages online transactions (see definitions next page).
“The first step (in PNG) is to create all the regulatory ‘sand-boxes’,” says Ninai, “which involves having the Bank of Papua New Guinea experiment with this new technology.”
According to ABC reports, the Bank of PNG and an Australian aid contractor are looking at how Blockchain could dramatically improve PNG’s low rate of financial inclusion. The Australian Government has allocated $AUD200,000 to help the bank investigate the possible applications of Blockchain technology.
In emerging markets, Ninai told a Blockchain conference in London in January, a regulatorled model is the only way to ensure that these systems have value and are transacted at scale. The regulators’ appreciation of this innovation and a willingness to experiment is key.
Ninai points out that PNG is a country dependent on close human relationships – where $5000 dollars in cash may not mean as much as three pigs and a shell necklace.
“Informal and alternative economies and governance systems … are deeply ingrained in our culture and are still alive and well; and the Blockchain allows us for the first time to capture this activity.”
“Instead of trying to fit the unbanked into a narrow financial system, Blockchain allows us to create and capture these alternative economic systems that bypass normal markets.”
Ninai says that while this technology has taken off in the US and Europe, the real value is to figure out how to get it to scale in developing nations, where people are most excluded from formal financial systems.
In 2015, Ninai participated in the Kumul Game Changers entrepreneurship program, where he was selected for the highly competitive Silicon Valley entrepreneurial
accelerator program at Draper University. After graduating, Ninai joined Draper University staff as an entrepreneur-inresidence, mentoring some 170 innovative companies.
Co-founder of Day One Investments, a Silicon Valley-based venture capital fund investing in Blockchain technology companies, Ninai’s partner is Tim Draper.
His company, Draper Associates, aims to transform industries with new technologies, and to build platforms for extraordinary growth, jobs, and wealth creation.
Ninai says Day One Investments is scheduled to close its fundraising soon, having secured capital commitments from a reputable anchor PNG investor, along with international investors.
He says he has identified East New Britain Province, where shell money is a form of accepted currency, as a potential pilot province.
“To this day, micro-finance institutions and savings and loans societies are willing to provide loans against this shell money because they recognise it as currency,” he says.
“For micro-finance institutions, this technology has a lot of potential and that’s where we’re seeing the most interest.”
East New Britain Province, where shell money is a form of accepted currency, is a potential pilot province.
Shane Ninai … “PNG is an ideal place to create an alternative low- cost banking system.”