Worldcoin’s global launch isn’t going as planned. On Wednesday, Kenya’s communications ministry suspended the ambitious blockchain project from operating within the country’s borders, citing “massive citizen data in the hands of private actors without an appropriate framework.” The country has launched a multi-agency investigation and is keeping Worldcoin on ice until the situation is resolved.
In a statement to Rest of World, Worldcoin said it would pause registrations in Kenya. “During the pause, the team will develop an onboarding program that encompasses more robust crowd control measures and work with local officials to increase understanding of the privacy measures and commitments Worldcoin implements, not only in Kenya, but everywhere,” a representative said.
If the issue were limited to Kenya, it might be only a small problem, but it’s not. Last week, we sent Rest of World reporters to see how the launch was going in three cities around the world — and the same problems that sparked concerns in Nairobi were evident in Hong Kong and Bengaluru too. The booths were popular, but people were mostly interested in the sign-up bonus (each new account gets 25 worldcoins, worth about $50). It raises long-standing concerns about whether the people having their irises scanned actually know what they’re signing up for. Kenya was the first country to take legal action over those concerns, but it may not be the last.
Countries like Kenya aren’t looking to Silicon Valley to build financial systems anymore
It’s a shame because, taken on its own terms, Worldcoin is a fascinating project. It is truly global, spanning 35 cities in places that are usually ignored by tech companies during a new product launch. Worldcoin sees itself as a product for the global unbanked, with all the iris scans and blockchain tech in service of a better financial system.
The problem is that countries like Kenya aren’t looking to Silicon Valley to build financial systems anymore. While venture capital was investing in blockchains, the Indian government has been busy building its own solution to the same problems — and it’s made many countries realize they don’t need to rely on American fintech for their banking infrastructure.
The Indian system is called the universal payments interface (or UPI), an open-source back end for money transfers across India. Designed to reach the millions of Indians without access to the banking system, UPI provides an easy way for anyone with an Indian national ID to start a bank account. Building the system as an API also lets existing apps like Google Pay serve as a front end — so all you need is an Android phone. Launched in 2016, UPI now handles more than 2,000 money transfers per second and has expanded to countries from Singapore to the UAE. It’s the crown jewel of India’s fintech sector and arguably the most successful digital payments system in the world.
Thanks to the broader India Stack project, UPI has already solved many of the issues Worldcoin is struggling with right now — particularly the problem of biometric identity. Anyone using the system must be registered under Aadhaar, India’s national ID system, which means there is a photograph, 10 fingerprints, and two iris scans already on file. (Worldcoin’s orb collects the same data, minus the fingerprints.) It’s also already integrated with government programs, so it would be straightforward to use the network for a universal basic income, as Worldcoin has often proposed.
To be clear, Kenya isn’t using the India Stack — but that doesn’t mean the country hasn’t been influenced by it. Kenya is working on its own Aadhaar-style digital ID, and while it isn’t linked to a digital payment system yet, they know how to get there. It could integrate with UPI or launch its own parallel network, but either option is likely more appealing than turning financial infrastructure over to American VCs.
At the same time, Worldcoin’s commitment to the blockchain and independent identity system make it difficult to integrate with existing national systems. None of these systems run on the blockchain or deal in Worldcoin currency. You could use the same wallet app to access your Worldcoin and UPI wallets, but, in the end, they’re two different payment networks with very little overlap. With UPI and similar networks already solving most of the problems Worldcoin wants to address, there will be little reason to turn to Worldcoin.
To many blockchain diehards, the India Stack will seem like a move in the wrong direction. Where the blockchain promises less government control over the financial system, India Stack means even more. India Stack also places more explicit limits on when and how you can transfer money, since anti-fraud measures limit daily transactions to 100,000 rupees (a little over $1,200). Worst of all, the whole project is built on a mandatory national ID system, something that the U.S. has long resisted as an intrusion on civil liberties.
Those privacy compromises have real consequences, but it’s not clear they’ll be enough to drive Indians to look for an alternative. If they are, Worldcoin can do a brisk business as a more privacy-conscious network — the Signal to UPI’s WhatsApp. But there would be a certain irony if, trying to build a payments system for the rest of the world, American tech gurus didn’t realize the rest of the world had beat them to it.
