The Pacific Islands Regional Initiative (PIRI) 2025 meeting in Nuku'alofa, Tonga, brought together over 70 participants from across the Pacific and beyond to discuss "Sustaining Progress, Innovating for Inclusion: The Next Chapter of Financial Inclusion in the Pacific." As a panelist in Session 3, focusing on leveraging AI and strengthening cybersecurity in Small Island Developing States (SIDS), I had the privilege of sharing perspectives on some of the most pressing challenges facing our digital financial future. The timing couldn't be more critical. As AFI's Director Dr. Eliki Boletawa noted, "Pacific nations face ongoing economic and climate challenges, and the rapid digital transformation of financial services presents both risks and opportunities." Having participated virtually during the Bitcoin 2025 Conference in Las Vegas, I brought fresh insights about global trends and how they intersect with Pacific realities. The Human Aspect - Our Greatest Vulnerability During my presentation, I emphasized a fundamental truth that often gets overlooked in our rush toward technological solutions: our greatest strength is also our weakest link i.e. the human aspect. While we focus extensively on building robust technical defenses, the majority of security breaches still originate from human error. our greatest strength is also our weakest link i.e. the human aspect This led me to advocate for my preferred cybersecurity methodology: "Block All, Open Only What You Use." This approach represents a paradigm shift from the traditional "allow all, block bad" mentality that has proven insufficient in today's threat landscape. For Pacific Island nations with limited cybersecurity resources, this methodology offers several advantages: "Block All, Open Only What You Use." Reduced Attack Surface: By defaulting to deny and only permitting necessary services, we minimize potential entry points for malicious actors
Simplified Management: Smaller Pacific nations can more effectively manage and monitor a smaller set of approved services
Human Error Mitigation: When users can only access pre-approved services, the impact of human mistakes is contained within known parameters Reduced Attack Surface: By defaulting to deny and only permitting necessary services, we minimize potential entry points for malicious actors Reduced Attack Surface Simplified Management: Smaller Pacific nations can more effectively manage and monitor a smaller set of approved services Simplified Management Human Error Mitigation: When users can only access pre-approved services, the impact of human mistakes is contained within known parameters Human Error Mitigation The key insight here is that technology alone cannot solve our security challenges. We need comprehensive training, cultural awareness, and systems designed with human limitations in mind. In Pacific contexts, where tight knit communities often share credentials and trust networks can be exploited, this human centric approach to security becomes even more critical. Transparency - The Foundation of Collective Security One of the most powerful themes that emerged from our discussions was the necessity of stakeholder transparency in sharing security flaws and lessons learned. Too often, institutions and governments treat security incidents as closely guarded secrets, fearing reputational damage. This approach, while understandable, ultimately weakens the entire ecosystem. stakeholder transparency in sharing security flaws and lessons learned Pacific Island nations are particularly vulnerable to cyber threats due to: Limited cybersecurity expertise and resources
Shared infrastructure dependencies (submarine cables)
Small market sizes that make individual security investments challenging Limited cybersecurity expertise and resources Shared infrastructure dependencies (submarine cables) Small market sizes that make individual security investments challenging When one institution learns from a security breach or discovers a vulnerability, that knowledge shared across the region can prevent similar incidents elsewhere. I advocated for the establishment of a hybrid information sharing protocol of both formal and informal channels that protect sensitive details while ensuring critical security intelligence flows throughout the Pacific financial ecosystem. I also referenced the gossip about gossip consensus protocol as an analogy of how information can spread and be verified in a decentralized manner throughout our communities. The Nuku'alofa Pledge, endorsed by PIRI central bank governors, represents a step in this direction by committing to shared goals of inclusive, climate resilient, and economically empowering financial systems. But we need to extend this collaboration specifically to cybersecurity and threat intelligence sharing. The Problem of Money and State Separation A fundamental issue underlying many of our financial inclusion challenges is what I call "the problem of money", specifically, the complex relationship between money creation, state control, and individual financial sovereignty. Traditional fiat currencies, controlled by central banks and governments, create dependencies that can be particularly problematic for small island nations. the complex relationship between money creation, state control, and individual financial sovereignty Consider these Pacific realities: Currency Sovereignty: Many Pacific nations use foreign currencies or have currencies pegged to major powers, limiting monetary policy independence
Remittance Dependencies: Pacific economies rely heavily on remittances, subjecting them to the monetary policies of other nations
Financial Exclusion: Traditional banking systems often fail to serve remote island communities effectively Currency Sovereignty: Many Pacific nations use foreign currencies or have currencies pegged to major powers, limiting monetary policy independence Currency Sovereignty Remittance Dependencies: Pacific economies rely heavily on remittances, subjecting them to the monetary policies of other nations Remittance Dependencies Financial Exclusion: Traditional banking systems often fail to serve remote island communities effectively Financial Exclusion This is where blockchain technologies and cryptocurrencies offer genuine alternatives. They provide: Programmable Money: Smart contracts can automate financial services without requiring extensive banking infrastructure
Borderless Transactions: Cryptocurrencies can facilitate cheaper, faster remittances
Financial Sovereignty: Individuals and communities can maintain financial autonomy regardless of geographic location Programmable Money: Smart contracts can automate financial services without requiring extensive banking infrastructure Programmable Money Borderless Transactions: Cryptocurrencies can facilitate cheaper, faster remittances Borderless Transactions Financial Sovereignty: Individuals and communities can maintain financial autonomy regardless of geographic location Financial Sovereignty However, this separation of money from state control is not without challenges, particularly around regulation, consumer protection, and monetary stability issues that were central to our PIRI discussions. Cutting Through the Technology Hype The financial technology space is currently saturated with hype around AI, blockchain, and other emerging technologies. While these innovations offer genuine value, we must be careful to distinguish between technological capability and practical application, especially in Pacific contexts. we must be careful to distinguish between technological capability and practical application AI in Financial Services - Promise vs. Reality Artificial Intelligence offers exciting possibilities for financial inclusion: Alternative Credit Scoring: Using mobile data, utility payments, and social patterns to assess creditworthiness
Fraud Detection: AI systems that can identify suspicious patterns in real time
Customer Service: Multilingual chatbots that can serve communities across vast ocean distances Alternative Credit Scoring: Using mobile data, utility payments, and social patterns to assess creditworthiness Alternative Credit Scoring Fraud Detection: AI systems that can identify suspicious patterns in real time Fraud Detection Customer Service: Multilingual chatbots that can serve communities across vast ocean distances Customer Service But AI also presents risks: Algorithmic Bias: AI systems trained on limited data can perpetuate or amplify existing inequalities
Infrastructure Requirements: Many AI applications require reliable internet connectivity and computing resources
Regulatory Challenges: Traditional financial regulations often don't account for AI-driven decision making Algorithmic Bias: AI systems trained on limited data can perpetuate or amplify existing inequalities Algorithmic Bias Infrastructure Requirements: Many AI applications require reliable internet connectivity and computing resources Infrastructure Requirements Regulatory Challenges: Traditional financial regulations often don't account for AI-driven decision making Regulatory Challenges Blockchain - Beyond the Hype Similarly, blockchain technology offers real benefits for Pacific financial inclusion: Transparent Transactions: Immutable records that can build trust in low trust environments
Reduced Intermediaries: Direct peer-to-peer transactions without traditional banking infrastructure
Programmable Compliance: Smart contracts that automatically enforce regulatory requirements Transparent Transactions: Immutable records that can build trust in low trust environments Transparent Transactions Reduced Intermediaries: Direct peer-to-peer transactions without traditional banking infrastructure Reduced Intermediaries Programmable Compliance: Smart contracts that automatically enforce regulatory requirements Programmable Compliance But blockchain is not a panacea: Energy Consumption: Some blockchain networks require significant energy, challenging for Pacific islands focused on renewable energy
Scalability Limitations: Many blockchain networks cannot handle the transaction volumes required for national payment systems
Regulatory Uncertainty: Unclear legal frameworks create implementation challenges Energy Consumption: Some blockchain networks require significant energy, challenging for Pacific islands focused on renewable energy Energy Consumption Scalability Limitations: Many blockchain networks cannot handle the transaction volumes required for national payment systems Scalability Limitations Regulatory Uncertainty: Unclear legal frameworks create implementation challenges Regulatory Uncertainty The key is adopting these technologies strategically, focusing on specific problems they solve rather than implementing them for their own sake. Lessons from Bitcoin 2025 - The Power of Unity My recent participation during the Bitcoin 2025 Conference in Las Vegas provided valuable insights that I shared with PIRI participants. The most striking observation was the power of unity within the Bitcoin and broader cryptocurrency community. Despite technological disagreements and competing interests, there's a shared vision of financial sovereignty and inclusion that drives collective progress. power of unity within the Bitcoin and broader cryptocurrency community This unity manifests in several ways: Open Source Development: Collaborative improvement of protocols and applications
Educational Initiatives: Shared commitment to educating users about financial sovereignty
Regulatory Advocacy: Coordinated efforts to engage with policymakers worldwide Open Source Development: Collaborative improvement of protocols and applications Open Source Development Educational Initiatives: Shared commitment to educating users about financial sovereignty Educational Initiatives Regulatory Advocacy: Coordinated efforts to engage with policymakers worldwide Regulatory Advocacy For Pacific Island nations, this model offers important lessons. Instead of each country developing isolated solutions, we could benefit from: Shared Infrastructure: Collaborative development of regional payment systems and digital currencies
Collective Advocacy: Joint engagement with international regulatory bodies on crypto and AI policies
Knowledge Sharing: Regional networks for technical expertise and best practices Shared Infrastructure: Collaborative development of regional payment systems and digital currencies Shared Infrastructure Collective Advocacy: Joint engagement with international regulatory bodies on crypto and AI policies Collective Advocacy Knowledge Sharing: Regional networks for technical expertise and best practices Knowledge Sharing The Pacific has a cultural foundation for this kind of cooperation, traditional concepts of collective responsibility and mutual aid that span centuries. We need to apply these principles to our digital financial future. The Seven Properties of Perfect Money Drawing from monetary theory and practical experience, I asked the audience to look up what I consider the seven essential properties that any form of money should possess, whether traditional fiat, cryptocurrency, or future innovations: seven essential properties that any form of money should possess Durability - It must withstand the test of time
Portability - Easy to transport and store
Divisibility - Can be broken into smaller units
Scarcity - Limited supply that can't be arbitrarily inflated
Fungibility - Every unit is identical and interchangeable
Acceptability - Widely recognized as a medium of exchange
Censorship Resistance - No single entity can prevent its use Durability - It must withstand the test of time Durability Portability - Easy to transport and store Portability Divisibility - Can be broken into smaller units Divisibility Scarcity - Limited supply that can't be arbitrarily inflated Scarcity Fungibility - Every unit is identical and interchangeable Fungibility Acceptability - Widely recognized as a medium of exchange Acceptability Censorship Resistance - No single entity can prevent its use Censorship Resistance Gold achieved the first six characteristics, which is why it served as money for millennia. But gold failed the seventh test when governments abandoned the gold standard and began controlling its use. Bitcoin, with its fixed monetary supply of 21M, has a built-in scarcity tied to real resources. For the first time in human history, we have money that achieves all seven characteristics. Building Toward the Future The PIRI 2025 discussions reinforced that the future of Pacific financial inclusion will be built on a foundation of security, transparency, innovation, and cooperation. As we leverage AI and blockchain technologies, we must: the future of Pacific financial inclusion will be built on a foundation of security, transparency, innovation, and cooperation Prioritize Security: Implement human centered security approaches that account for our greatest vulnerabilities
Embrace Transparency: Share knowledge and lessons learned to strengthen the entire ecosystem
Question Fundamentals: Examine the relationship between money and state power, seeking solutions that serve Pacific communities
Cut Through Hype: Focus on the human aspect and practical applications of technology
Build Unity: Learn from successful collaborative models and apply them to Pacific contexts
Demand Excellence: Insist that any monetary system serves all seven properties of perfect money Prioritize Security: Implement human centered security approaches that account for our greatest vulnerabilities Prioritize Security Embrace Transparency: Share knowledge and lessons learned to strengthen the entire ecosystem Embrace Transparency Question Fundamentals: Examine the relationship between money and state power, seeking solutions that serve Pacific communities Question Fundamentals Cut Through Hype: Focus on the human aspect and practical applications of technology Cut Through Hype Build Unity: Learn from successful collaborative models and apply them to Pacific contexts Build Unity Demand Excellence: Insist that any monetary system serves all seven properties of perfect money Demand Excellence The launch of Tonga's Fintech Regulatory Sandbox Framework during PIRI represents exactly this kind of practical, collaborative approach. It creates space for innovation while maintaining appropriate oversight, and it's designed specifically with Pacific needs in mind. As Hon Dr. Aisake Valu Eke, Prime Minister of Tonga, noted, this framework "aligns with these goals by creating a controlled environment to test innovative digital solutions that can enhance inclusion, resilience, and access across the region." Conclusion - A Pacific Led Digital Future The conversations at PIRI 2025 convinced me that Pacific Island nations are uniquely positioned to lead certain aspects of the global digital financial transformation. Our challenges of geographic dispersion, infrastructure limitations, climate vulnerability are forcing us to develop solutions that could benefit the entire world. But this leadership requires that we remain grounded in our values and focused on practical solutions that serve our communities. We cannot afford to be distracted by technological hype or to implement solutions that prioritize innovation over inclusion. The path forward requires security first thinking, transparent collaboration, monetary innovation, practical technology adoption, unified regional action, and an unwavering focus on serving our people. As I emphasized during the panel, our greatest strength will always be our people, and our greatest responsibility is ensuring that technology serves them, rather than the other way around. security first thinking, transparent collaboration, monetary innovation, practical technology adoption, unified regional action, and an unwavering focus on serving our people The future of money and financial inclusion in the Pacific will be built by Pacific Islanders, for Pacific Islanders, using the best tools available while staying true to our principles of community care and collective prosperity. As I often say, "If we take care of our own, they will take care of us" mand that principle must guide our digital transformation. Visit https://pasifika.xyz/ to learn more about the work we are currently doing for the Pacific Island Financial Inclusion Initiative. Visit https://pasifika.xyz/ to learn more about the work we are currently doing for the Pacific Island Financial Inclusion Initiative. https://pasifika.xyz/

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