Pacific Island States Call for Unified Cybersecurity Protocols and Digital Sovereignty

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.

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:

• 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

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.

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

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.

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

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

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.

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

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

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

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

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.

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

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

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:

1. Durability - It must withstand the test of time
2. Portability - Easy to transport and store
3. Divisibility - Can be broken into smaller units
4. Scarcity - Limited supply that can't be arbitrarily inflated
5. Fungibility - Every unit is identical and interchangeable
6. Acceptability - Widely recognized as a medium of exchange
7. Censorship Resistance - No single entity can prevent its use

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:

• 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

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.

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.