Keynote by Paul Brody - Global Blockchain Lead, EY

Yeah, there we go. I'm the global blockchain leader at EY. I'm also Oh, I'm also the chairman of the Enterprise Ethereum Alliance. Got to only gesture with one hand. That's like silencing me.

Um, so, uh, but I want to talk about the future of money and in particular, I have this idea that the future of money is fundamentally about streaming, right? that we are literally going to go from this traditional model of sending money in quarterly or monthly chunks and we're going to move over to a streaming model where we move money as we need it when we need it in relatively small increments. In fact, at increments that are so small that people today might be surprised at how small they're going to get. So let's talk about what's driving this. Uh first and foremost, what's driving this is global regulatory convergence, right?

uh if we wanted to have banks and other businesses work on chain use stable coins really have to have regulatory compliance and that's what's happening all around the world. It's a very positive thing. Individuals in small countries are dollar they they are they are dollarizing they're transacting on chain already but if you want to have your electric bill your utility bill your taxes your business transactions and payments done on chain it has to be regulatory compliant. So governments governments don't go after individuals. They don't go after the person on the street corner, but they absolutely go after large companies with deep pockets.

So regulatory kind of global regulatory convergence is extremely important. And indeed now that this is happening, there is an absolute stampede going on into the uh uh uh stable coin space primarily. Um just I think I've seen our business kind of explode. Everybody wants to have a stable coin strategy. Companies want to know should they have their own stable coins?

uh all kinds of things like that. So this business is absolutely booming and you can also see it in the actual stable coin volumes. Uh what's driving demand? Three things I believe driving demand. Number one, people are buying assets with stable coins.

So uh you know even though there's a lot of talk about ETH as a store of value, the truth is most of the store of value that's onchain today that's actively being used in investment is stable coins. It's being used to buy assets, real world assets, digital assets. Secondly, consumer payments. Consumers are paying each other. They're paying for stuff.

Again, especially in emerging markets that are dollarizing. And then lastly, we're at the beginning of a whole b business ecosystem development uh process where large companies are going to start transacting with each other uh and with their suppliers and business partners around the world. Uh over on the consumer side, what does this mean? So for consumers, we are getting very quickly to a point where banking on chain looks and feels pretty much indistinguishable from banking in the real world. Now I want to say that banking on chain is still messy because of the horrible crypto UX, right?

We we love to complain in crypto about the user experience, but I took my actual 17-year-old son to a real bank branch to try to open a bank account for him, and it took us two hours of paperwork. So, uh, complaints about the crypto UX feel kind of quaint after you spend two hours showing your passport and birth certificate in an actual bench bank branch. Uh, but it's getting better uh on on chain. Um, we have a very similar process taking place for businesses where banking integration and crypto integration are starting to look the same. So, first and foremost, unlike consumers, businesses care about regulation.

Secondly, unlike consumers which seem to overwhelmingly want US dollars, businesses actually want local currencies. Right? If you're an enterprise and you are transacting in Argentina in pesos and you're regulatory required to do so, you and you want to transact in in global transactions on chain, you're going to need local currency. And I believe it's B2B transactions that are actually going to drive demand for for local currencies on chain. They want stable coin interop, right?

There's literally hundreds of US dollar stable coins. They need confidence that they're all going to be interoperable. They're going to be easily exchangeable. Banking integration, very important. And ERP integration, right?

How many of you have heard of SAP? There's a few of you. SAP is the main software system that large companies run on. Everything runs on large companies inside of SAP. And this is really important because if you want a company to do something, it's going to get done in SAP, right?

And so last year, for example, EY became the first company to receive a fully automated stable coin payment to our institutional crypto provider through SAP. SA SAP has built a wallet for their enterprise system and they built institutional integration. And so as a result, we had a client, they paid an invoice in PayPal's PYUS dollar uh stable coin. It showed up in our computer system as cash paid against that invoice. So uh really really important.

Basically, once you have this SAP integration, making a stable coin payment is for large companies, it's exactly the same. Making and sending looks exactly the same as uh doing a bank integration payment. And that's really important because large companies really don't like doing things that aren't kind of fully automated and plugged into their systems. So where is all of this going? I talked the title of this presentation is the future of money is streaming.

And and this is what I'm talking about here. Right now today, uh we stream music, but it wasn't like that. And some of you are much too young to remember, but once a time, once upon a time in a galaxy far, far away, we bought analog albums, right? Which you can still buy in like special shops that are hilarious. Um my son actually buys like analog albums.

He's like, "Dad, do we have a record player?" I'm like, "That was thrown out a long time ago." Um, and then we bought whole CDs and at a certain point it got cheap enough and easy enough that we started buying and downloading or stealing and downloading individual tracks, right? And eventually we just gave up and we went to streaming. We we we don't even stream a whole song anymore.

We stream like tiny bits of a song. And the argument I want to make is that this is what is going to happen to money, right? Once upon a time, we got paid every two weeks and we got bills monthly and we paid our mortgages or our rent monthly. I believe we're slowly going to go away from that. And what's driving that is this transition that blockchain is making affordable and possible.

We are in the middle of a payments transition from things that took that cost dollars and took days towards that things that basically cost under a penny and take less than a second. And once making payments is essentially free, the idea that you would change how you run your business, especially at a global level, starts to become really appealing. This idea of like why would I wait a whole month or why would I keep big piles of money everywhere just in case becomes unnecessary. And I think what we're headed towards, for example, at the um at the enterprise level is a completely different way of managing your treasury. So today we have global treasuries, but they don't keep a lot of money.

where you keep the money is in the individual operating countries. But if payments are free and instantaneous, you're going to put your have a big global treasury that's centralized and and aggressively managed for yield. And then you're going to have little small bank accounts in other countries that just keep the minimum amount of money necessary. Right? So if you pay your workers on Friday, then a Thursday night at 11:59 p.

m. you're going to send the money for that. Anything that's needed, right? But basically the whole process is going to shift from big chunks of money to tiny amounts streaming over time and the result of that is going to be kind of a just in time payments and financial system and it's not just how companies are going to manage their treasuries. I believe it's also going to affect how basically enterprises and consumers interact with each other.

And I'll give you just two very specific examples. It's pretty common in the US and Europe that companies have incentives not to use energy during peak time periods. The problem with these incentives is they're not very powerful. Like if you want to run your dishwasher tonight, right? Okay.

Yes, it's going to cost you 25 cents more in electricity, but the problem is like your electric bill is not coming for 30 days. On the other hand, if you're paying your electric bill every night for the con electricity use consumed today, a savings incentive that's valid today and pays out today, it's much more effective. And the same thing turns out to be true with working. You work on an hourly basis, you're a gig worker, you you drive an Uber, you deliver packages, right? The incentive to do another package, do another delivery, take another ride.

It's much more effective if you're getting paid today for work you did today. And in fact, we have data from social research scientists that basically says um incentives like these are 100 to 300% more effective when the payout is the same day than when it is 30 or 60 days away. Right? And by the way, uh if you're an enterprise and you have you're the electric bill or the gas company or the phone company today, you extending your customers 30 days of credit every month. Why?

Why not charge them every night? You have the data systems. It's not like the old days where people didn't know how much they consumed. They know now. So, you can charge them literally every single night for any kind of incremental product or service that they use.

And you can pay them. You can do daily payroll. So, my prediction is that although this sounds crazy, we are headed into a world of basically streaming these transactions pretty much in near real time. What's been missing is all of the integration and the infrastructure required to do this. And now that we have both the regulatory compliance and the technology available to do it, we're starting to sort of accelerate towards that path.

And that is kind of my expectation, right? We are at the beginning of this acceleration phase. Um, and if you go back to the story about uh music, so it took quite a while into the digital age for music to flip from a purchase to a subscription and from a download to a streaming model. And I think we're in the same phase here now in the world of crypto and blockchain. We are several years into the crypto era, but it's taking time and maturity for people to see the power of this business model and think about how to move forward on it.

So, uh, I think we're we're um we're we're at the beginning of a very substantial transition in payments over time. Uh, I will just finish up with, uh, a little bit about, so I'm from Ernston Young. What is it that we do? We do three things. We do the traditional thing.

We do four things. We do the traditional things that you would expect a big four accounting firm to do. Financial statement audits, tax accounting, uh, business consulting. But in addition to that, we are an ETH Maxi firm and we invest heavily in blockchain engineering. If you haven't heard of it, we have a I'm going to talk about this tomorrow.

We have a layer 2 privacy technology called Nightfall. Uh it's deployed on Plume. It's deployed on Cello. Uh we also build smart contract security auditing. I'm the chairman of the EA in their free time.

And I even managed to get GA um get Vitalic to endorse my book uh which is apparently safe and effective for falling asleep without any drug use if you have jet lag. Uh and then lastly uh thanks for listening and if you would like it I have a limited edition NFT minted on the base network that you can have uh as a it's called a proof of Paul. Uh, and I also have, if you want to see me in person, I have POA apps as well. Limited edition PO apps. And that is it for my talk.

Thank you very much.