CoinTelegraph spoke with Christoph Hering from BitShares Munich on the current refugee influx into Europe and why cryptocurrency and blockchain technology might just be the perfect answer to the crisis.
Hering is the PR Manager and Crypto Coach for BitShares Munich. Born and raised in Munich, he is an active trader and bilingual entrepreneur.
He has over 5 years of experience in financial analysis, working with structured products and handling of international commercial transactions.
“The current crisis is a big chance for the German economy and society.”
- Christoph Hering, BitShares Munich
CoinTelegraph: What is the refugee situation like right now in Germany? What type of impact is it having on the country and the economy?
Christoph Hering: Most Refugees arriving in Germany left everything behind. The families that arrive in Munich just own what they wear, holding a smart phone in their hands. They need to start building their lives all over again. Germany is struggling with the current refugee wave.
Some say it’s the financial benefits of €143 per month that started the mass immigrations. Others are coming because Mrs. Merkel lifted the rules for Syrian refugees. However, all refugees have to start with their asylum registration. The German government is currently covering all basic needs such as accommodation, food and a financial support of €143 in cash.
But if the refugees really want to start their new life in Europe then they are required to open a bank account to receive any kind of additional government financial support. Therefore the BaFin apparently has recently lowered the KYC standards in Germany.
In my opinion, the current crisis is a big chance for the German economy and society. Germany has all the infrastructure in place to welcome thousands of new employees, students and for most consumers. I think we will see a strong consumption increase in most industries over the next couple of years. Please remember, when the refugees can stay here, they need to rebuild their lives from scratch. If Germany can set the right framework now, we will all grow together.
“[Refugees] might not get a regular bank account at a local community Bank in Germany, but everybody can open a Wallet with their smartphones.”
CT: How do you see cryptocurrency like bitcoin or BitShares (and bitEUR) helping the refugees?
CH: I think cryptocurrencies could be a key element for the refugees to start with basic banking again. They might not get a regular bank account at a local community Bank in Germany, but everybody can open a Wallet with their smart phones. Bitcoin and more stable cryptocurrencies like BitShares (bitEUR, bitUSD, bitCNY, bitRUB, etc) would be a great start for their new life. Imagine all of the open minded refugees discovering the benefits of Smartcoins!
It will start a wildfire among their communities, enabling them to send stable currencies like bitEUR to each other in less than 10 seconds and foremost to/from their home countries supporting family and friends. Think about it, a bail-in-proof secured decentralized wallet that holds your life savings? That’s a clear no-brainer for me.
CT: Would this be largely donations or some type of income?
CH: It can be both. The people have countless opportunities to donate money for the refugees today. Big Organizations like the Red Cross are collecting money from all over Europe. Their biggest problem now is how to distribute the donations among them.
“Cryptocurrencies could help us to distribute the money to the refugees directly. No middle man anymore […] we need to give refugees their chance to spend their money by themselves.”
Current non-profits’ overhead is far too high and often result in material goods rather than monetary donations. Wouldn’t it be better if we can donate the money to a pool that distributes the funds evenly? Cryptocurrencies could help us to distribute the money to the refugees directly. No middle man anymore. I think we need to give refugees their chance to spend their money by themselves.
On the other hand, the German government pays every refugee €143 per month. It will be even more when the refugees get their visa and can stay. You can consider it as kind of basic income for everybody. The question will be how long Germany can keep up with their monthly financial support. We also have to consider that refugees have to support family and friends abroad. How much money is lost because the refugees have to use the old-school and expensive money transfer networks instead of Smartcoins to send money back home (or vice versa)?
CT: How can they be on-ramped if many of them are destitute?
CH: I do not think that all refugees who came to Germany are destitute. How else could they afford the multiple tickets to travel all the way up here within two weeks? I think they struggle to access their savings and would need new on-ramps to transfer their money.
They cannot trust the regular Banking Industry in the Middle East anymore. Wars and bank collapses destroyed most of their savings. Ken Code (@kenCode_de) and I at BitShares Munich discuss these things daily and are providing solutions for those in need (Point Of Sale Systems (POS), ATM's, Smartcards, coaching programs (and for the Missions) so they can raise money, light wallets, our annual Expo, meetups, etc).
Together with our Partners we are working hard to set up multiple Fiat on-ramps into BitShares. The legal requirements for all of us are tough. I would welcome to see the German regulators supporting us more. However, at the end it depends on the Fiat Exchanges - if they offer any special refugees services. Imagine if the refugees could fund their BitShares Wallet anywhere and bring back their own money. BitShares swaps them all 1:1 and fees are kept under a few cents.
“When I walk around Munich I am excited to see countless refugees with modern smartphones in their hand.”
CT: Do you think that cryptocurrency can lighten the load on Europe’s strained economies that are supporting the refugees and provide much needed liquidity?
CH: Yes, I think this crisis is a great chance for cryptocurrencies to hit the mainstream. When I walk around Munich I am excited to see countless refugees with modern smartphones in their hand. All of them could just download one of our Wallets and be their own bank. Now the biggest challenge for the Crypto Community is to close the loop.
We are creating the cycle where Cryptocurrency users can earn and spend their Smartcoins anywhere. Most Vendors refuse currencies like bitcoin due to their volatility. They are forced to sell the bitcoin immediately. What if they could keep it?
BitShares' Market Pegged Assets like bitEUR or bitUSD are pegged to the real EUR and USD value while offering all of the benefits of cryptocurrencies. No need to sell anymore. Hold and earn. I think the crypto community needs to reach out to vendors and refugees to offer our solutions. Thousands of new consumers shouldn’t sit on stacked cash alone.
“Transplanting little chips with blockchain hashes in everybody would be a horrible dual use. A better way could be modern Passports with QR or RFID Chips connecting to a blockchain.”
CT: What about the problem of tracking and documenting refugees? Can the blockchain be used for refugee identification and record-keeping (compared to conventional means of applying for citizenship, country ID, passport etc.)?
CH: We really need to think out of the box when it comes to blockchain citizenship. Transplanting little chips with blockchain hashes in everybody would be a horrible dual use. A better way could be modern passports with QR or RFID Chips connecting to a blockchain. We do not need to store the data locally. We could use, for example, the smart contracts system on BitShares and get direct blockchain access, using modern passports holding one part of the private key to access records of the current asylum state, social welfare and all relevant saved personal data.
I think if you seal that information via an encrypted, decentralized, multi-signature blockchain that would be real game changer. This would not only help refugees without passports, it would help us all. I am convinced smart contract blockchains like on BitShares will provide the right tools for visionary entrepreneurs.
CT: Can the blockchain be used to provide dispute resolution and locate needed services to refugees?
CH: Yes, the blockchain has the capability to serve us as a universal legal ledger that contains all kinds of laws. The blockchain could be the universal fraud free judge, following a set of laws that have been defined and voted in by us, the people. I am excited to think about the countless opportunities of smart contracts in combination with fraud free blockchains.
What if we apply Big Data tools on a public blockchain and analyze undiscovered needs for all refugees. Imagine we have a blockchain system that grants asylum according to predefined parameters. We could see in an instant why people's visa gets denied or approved, with consensus. The information can be stored with account permissions in a public/private domain and we can even arrange for voting if any parameters need to be changed.
I believe that blockchain technology has the power to bring back the power to the people. Imagine a nation that could vote on their own immigration laws directly! Did I mention the BitShares platform already?
CT: So most of the refugees have smartphones? Do they have access to the internet? If not, would bitcoin debit cards or POS devices be more convenient then?
CH: Yes, most of the people have simple smartphones. But those are not luxury items like in Germany or the rest of Europe. They cover the basic needs of most refugees and are used to communicate with family and friends. They are also used to navigate through Europe. However they depend on open WIFI hotspots to connect with the world. A working cryptocurrency debit card could be very helpful.
The Crypto Currency Exchange Denmark (CCEDK) just recently launched their Nanocard in Partnership with BitShares. The Nanocard allows their users to fund a wallet with multiple cryptocurrencies and spend them at any POS System that accepts EC (debit) Cards or Credit Cards. The Vendor then receives fiat or crypto, whatever they wish. No extra software is required. This is a game changer in the cryptocurrency industry. Get online, fund your wallet and spend it offline at every POS System. Imagine sending your kids abroad with such a card! I wish I had a crypto allowance when I was a kid.
“Although we cannot stop the use of force directly, we can give those people in need a secure financial system that works seamlessly over all borders.”
CT: Are you planning to work with other blockchain-based organization such as Bitnation’s Refugee Emergency Response (BRER), others?
CH: Of course, take a look at PeerTracks or Coinality. Multiple charities are making use of the blockchain too. We are witnessing tons of businesses moving onto the BitShares blockchain for all kinds of Big Data functionality such as commercial properties, cars, fundraising, lending, rewards cards, and even livestock. Think about all of the assets the refugees had to leave behind!
CT: How do you see this crisis being resolved?
CH: De-fund aggression and co-exist. I firmly believe this is the best time to bring people into the blockchain Industry. Visionary entrepreneurs and startups are building products and services to serve their specific needs too. Although we cannot stop the use of force directly, we can give those people in need a secure financial system that works seamlessly over all borders. Blockchains like Bitcoin or BitShares has redeveloped the basic human need of P2P value transfers. The personal finance revolution with cryptocurrencies is here and nobody can stop it.