LONDON – Former Prime Minister David Cameron said on Monday that the technology that underpins digital currency bitcoin could be used to revolutionise governance and reduce global corruption.
Cameron, who was Prime Minister of Britain from 2010 until July last year spoke at the launch of fintech startup Blockchain’s new east London offices.
He said that what “most excites me is the potential that your technology has to fight corruption and to deal with failures of governance and governments and the rule of law all over the world.”
Blockchain – the technology, not the company – is a former of decentralized database that allows people to edit a shared ledger and will only be edited with the agreement of the majority of parties who use it. The system allows people to agree on an outcome without having to work through a middle man.
Banks and financial institutions have invested millions in developing commercial applications for the technology. Santander has estimated could save banks up to $20 billion (£16 billion) a year in administrative costs for things like settlement of trades.
Cameron, who admitted he was "only someone in the very foothills of understanding" the technology, said: "Obviously you've got amazing opportunity using blockchain technology in areas like banking and finance and insurance, but I think some of the public policy applications are potentially transformational."
"The more I was Prime Minister, the longer I did the job, the more I could see that corruption and the failure of governments, the failure of rule of law, the presence of conflict in so many countries, was actually what was keeping them and their people trapped in poverty.
"I think there are so many opportunities that your technology has because it is digital, because it is decentralized, because it is transparent, because it is held away from governments. You have this opportunity to give the poorest and the most marginalised, the most dispossessed people in the world, to be able to have property rights, to be able to carry out transactions, to be able to save, to be able to invest. Your opportunities for instance in the remittances markets - a huge market - to help people have lower transaction costs and better property rights, are massive.
"But I think you also have the opportunity, if we can get it right, to help these governments and these countries to be less corrupt, to have the rule of law, and to have something else that we have in this country which sits alongside the rule of law, which is not just a set of rules but a sense of trust in the institutions that we use.
"I think you're on the brink of a very exciting revolution in all of those areas, which as someone involved in public life is very interesting. It's great to be at the start of a revolution here in London, I hope you keep this revolution going, I hope the government hears loud and clear the things that you need, and I hope you go on succeeding and growing."
What Cameron, who is reportedly being lined up to lead NATO, is proposing is essentially decentralised, transparent government processes, where budgets can be audited by anyone and services monitored by users.
Taxpayers wouldn't have to worry about a corrupt councillor fudging the numbers on a project to siphon cash into a crony's account, for example - any payments made would be recorded on the blockchain and available to view. And people couldn't have their property rights taken away by a despot who changes the record because ownership wouldn't be controlled by a central government register. (Of course, there are more sinister ways to take away property than through paperwork trickery.) Last year, while Cameron was still in office, Britain's government trialled the payment of benefits using blockchain.
Cameron's vision aligns him with George Galloway, an unlikely political alliance. Former Labour Party MP turned independent Galloway promised to run London's £17 billion mayoral budget on blockchain when he unsuccessfully ran for Mayor in 2015.
Fighting global corruption was one of Cameron's priorities in his second term as Prime Minister. Cameron held a global summit to tackle corruption shortly before leaving office last year and said at the time that corruption is "the root of so many of the world's problems." At the conference, Cameron was memorably caught on a live mic describing Nigeria and Afghanistan as "fantastically corrupt" and "possibly the two most corrupt countries in the world."
At Monday's event, Cameron said he is also excited by the potential to put things like medical records on blockchain and to record intellectual property rights using the technology. Estonia has already partnered with a company to offer blockchain-based medical records across the country.
'I want us to be a success specifically in fintech'
Former Tory Party leader Cameron said on Monday that he is "passionate about making sure London continues to be a successful tech hub."
He said: "I'm very proud of what we did in office to support Tech City. It was happening anyway but we got behind it, we worked with you, we tried to go through all the things that tech city needed to really take off, whether that was broadband speeds or available property or some of the big tech companies coming and locating here. I really want that to continue to be a success."
He added: "I also want us to be a success specifically in fintech. There's a huge opportunity here in Britain, not just because of the proximity of our fin and our tech, whereas in America they're divided by thousands of miles and Trump voting states, but because I do think we have particular talents and abilities here in the UK. The City of London has always been a fantastic innovator and we need to be as good an innovator in digital as we have been in the analogue world."
As Prime Minister, Cameron appointed an official government fintech envoy and led trade missions overseas to promote UK startups. Cameron first met Blockchain (the company) on one of these missions.
Cameron's successors in government have been equally hot on fintech. City Minister Simon Kirby told BI recently that the government is "absolutely committed to fintech" and is organising a week-long series of events to promote British fintech in April. Chancellor Philip Hammond, who has already publically praised British fintech, and Bank of England governor Mark Carney, another advocate, will both speak at the event.
Cameron said on Monday: "It seems to me there is this massive potential of disruptive technology and insurgents and startups that can take on the jobs, investment, and prosperity of the future. It's so important we have some of those insurgent businesses right here in London and not just in the United States."
The former PM praised Blockchain, the company, as a potential future "unicorn" - a company valued at over $1 billion. Blockchain provides digital wallets that let people securely store the cryptocurrency bitcoin and also provide data analytics and a platform for developers. Former Merrill Lynch chairman Bob Wigely is a board advisor and former Barclays CEO Antony Jenkins sits on their board.
Blockchain employs 60 people across New York and London and had Europe's largest ever "Series A" funding round, $30 million (£24.1 million), in 2014. Cofounder and CEO Peter Smith said at Monday's event that it recently transacted $1 billion across its network in a 30-day period.