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As part of the Digital Currency Council’s Continuing Education partnership with Inside Bitcoins, the DCC’s CEO, David Berger, had the opportunity to interview the thought leaders that will be speaking at the Inside Bitcoins Conference in New York City on April 27-29, 2015. Today, we share an interview with the thought leading regulatory compliance and AML expert Juan Llanos.

David: Tell us about how and why you got involved in Bitcoin and digital currencies.

Juan: I came into Bitcoin and cryptocurrencies via two entry points, if you will. I have been working in the non-bank payments and remittances industry, and developed a parallel career as regulatory compliance and anti-money laundering expert since the early 2000s.


Both of these have oddly converged into the emergence of digital money and Bitcoin. I first heard about bitcoin in mid 2011 while researching or a lecture in cybercrime and new payment methods. Unfortunately, I wasn’t smart enough to learn how to buy bitcoin back then. As soon as I learned about it, I realized that as a value-transfer mechanism, from the anti-money laundering point of view at least, it was already a regulated product. That’s why I’ve been saying for years that Bitcoin was born regulated. I presented my point of view to the Bitcoin community in New York at the end of 2012 and early 2013, just before FinCEN issued the famous March 18, 2013 guidance. On the business side, as a fintech entrepreneur creating products for the underbanked, I saw the potentially transformative potential of this new technology, and the writing on the wall for my business at Unidos Financial Services, Inc., a traditional money transmitter, processing cross-border remittances for the underbanked.

David: What inspired you to join Bitreserve? What makes Bitreserve unique?

Juan: Bitreserve appeared at a time when I was already well embedded in the Bitcoin world, as an advisor to several companies in Silicon Valley, New York and South America. It was around the time of the Senate and New York Bitlicense hearings, and the uncertainty about MtGox, then the largest exchange and its impending implosion. What they proposed made a lot of sense to me -a way of bridging the digital assets and real assets worlds. Plus, the management and engineering teams are absolutely impressive. The engineering incorporates elements of the new blockchain technologies: speed, low cost, real-time transparency, and the user interface is absolutely beautiful. For a centralized cloud money system to match digital liabilities with real assets and thus prove solvency in real time when the standard is closed, opaque ledgers was very inspirational to me to everyone involved.

David: What are you most excited about in digital currencies and blockchain technology right now?

Juan: In 2002, when I started working in non-bank financial services for the underbanked, I was introduced to the work of Hernando de Soto and his most famous book The Mystery of Capital. One of the key aspects of his central thesis is that because assets cannot serve as capital due to the lack of reliable asset registry systems, a huge portion of the global economy is condemned to remain underground, informal and underdeveloped. When learning about blockchain technologies, I immediately made the connection to de Soto’s work. The ability to register assets in an immutable database, and the possibility of automating contractual terms and conditions in what is known as “smart contracts.” That is what I’m most excited about right now.   This alone could do more for development and financial inclusion than the often misrepresented use case of remittances.

David: What do you see as the greatest challenge facing the industry?

Juan: I’ve often said that the biggest challenges facing the industry are many: regulation (the natural lag after innovation plus the risk of over and misguided regulation), security (both from the systemic and the consumer loss perspectives), speculation (and the attendant volatility, which is the number one obstacle to massive acceptance of the coin), complexity (the number two obstacle to massive acceptance), disruption potential (the natural resistance of the status quo to innovation). I have more recently started to break these down into the many things that need to change in order for innovation in payments, money and finance to happen. Here‘s an example of certain aspects of regulation where disruption is also called for. Regulation and public policy goals are a huge obstacle today, because aside from the stated purpose of protecting society, they also have the unintended consequence of protecting the status quo.

David: What’s on the horizon for you?

Juan: Now that I’m no longer at Bitreserve, I will take some time off to evaluate options, reengage with the industry as an advisor and investor and build my own projects. These are exciting times and I feel very fortunate to be part of this industry and its enormously transformative potential.

David: Thanks very much for your thoughts, Juan. Looking forward to a great conference.

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