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Transferring Power to People Through Tokenization

When she was an MIT Sloan Fellow, World Bank Technology and Innovation Officer, earned a memorable nickname from MIT Senior Scientist Andrew Lippman. “We were discussing Facebook. My point was that if Facebook can make tons of money selling my data, why can’t I make money off myself? I just want Facebook to pay me a basket full tokens for my info. In response, he dubbed me a homo-economist, which I gladly accepted as a compliment.”

Prema Shrikrishna, SF ’17

In her work at the World Bank’s Technology and Innovation Lab, Shrikrishna is a sustainable business champion and blockchain technology enthusiast. “When you look at the endemic inefficiencies in our current global economic structure, many of the problems can be traced back to imbalances of power,” she says. “People with money have power, and they use their power to get more money. If we fail to act, the imbalances will worsen.”

Notional currencies to the rescue
Shrikrishna readily acknowledges that many technical and regulatory challenges lie ahead, but she believes that we’re much closer to a societal comfort level with cryptocurrencies than people think. “Yes, crypto tokens are an abstract notion, but corporate accounting is based on notional numbers,” says Shrikrishna. “Valuations of global giants such as Apple are certainly notional. It’s a simple matter of transferring that same mindset to currency.”

Crypto tokens, in Shrikrishna’s view, are a notional means of exchange that can be designed for many different types of transactions. “By supplementing existing international currencies with tokenized systems, we might create more localized, digital notions of currencies that are built from the ground up to better serve local and regional economic needs,” she says. “With that approach, we can deploy crypto token systems as counterweights to some of the imbalances of power in our current systems.”

Paving the road to adoption
In addition to their work on the technical requirements of various blockchain-based token systems, Shrikrishna and her colleagues at the World Bank are carefully examining technology-adoption models. “We know that we have to work from both the top down and the bottom up. At the country level, we know that providing guidance on government regulations, supporting the development of digital infrastructure, and performing readiness assessments will speed the creation of genuine benefits for inhabitants.”

At the individual level, Shrikrishna’s team is looking at strategies for motivating people to engage with the new technology. “We understand that widespread adoption by individuals will require significant educational investments,” she says. “We want to make the most of those investments, and we’re learning a lot from game theory about what motivates people to engage. If we get this right, we can give greater agency to people who have historically been on the downside of the global economic power imbalance.”

 

 

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