Panel | Stablecoin Distribution Interoperability: From Issuance to Ubiquity

How's everyone? That's a very very big stage.

[snorts]

Um thank you everyone for being here. Very excited to chat with you today to explore a little bit, you know, payment and interoperability. I guess I'll start first by asking you to set the stage and make sure we have the same definition of what do you see and what does it mean for you interoperability in the realm of payment and in your in your context? And if you could actually use a specific use case and example, you know, not something theoretically to have your definition of like a case that you encounter. And I'll start with you, Emo.

Yeah, happy to good morning. Um like I'd say if you want to move money today from let's say Germany and to Japan, um then you're not having the convenient option of like SEPA instant, you would actually go through a cross-border payment, potentially some multiple hops with through multiple banks and institutions. And with stablecoins, I mean, at first, I mean, as with for like the initial vision was really just peer-to-peer, you just shoot it from A to B. But there's a variety of uh intermediaries required. It already starts with does your local bank even support it, which institutions like ours are building on, but it's not there yet.

That's probably the most important first step before we actually properly get into how to best route the payment and how to make it efficient. But first, it needs to be supported so that not every single user has to install their own wallet, but actually can use what they have already. I mean, in the end, you want to send money. Does the client really care fully about and what kind of rail is used to move money? So, that's something which we as institutions need to abstract for our clients.

It's kind of complexity. Clients don't really want to care in depth about how it's done. They just want it to happen. Okay. Um maybe I'll switch um Okay, go ahead.

Go ahead. Go ahead. You're ready. You're ready. I can see.

Um well, I mean, I think building building building on Emo said, like I think a lot in in in our space when we talk about interoperability is like blockchains and bridges and all that, but I think specifically when it comes to real-world payments, a lot of the interoperability gap is in the surrounding infrastructure. Like every hop, separate KYC, separate AML, like um accounting, cons- reconciliation. Like all of that stuff is very bespoke for every counterparty. And that's that's where a lot of the interoperability actually breaks down cuz I mean, we've we've like the the asset movement itself, it's it's been largely solved by now. It's all the stuff around it that is still like non-existent.

The KYC, the LEI, all those different aspects.

stuff. Yeah, the the fun stuff. Well, um if I may, uh we have a kind of an interesting position at Kivalis, right? Because we are founded by 12 banks and I believe by

You could refresh the audience because I know what you are in my research, but maybe you could for the people who don't know like what has been Kivalis, you know, like it's very like in September like a couple of months ago.

super fresh, right? So, I'm at Kivalis since 3 weeks. Before that, I was still at one of the banks. So, we've been working on this for 2 years to set it up because first you have to explain to all of the, you know, supervisory boards, the central banks, everyone else around the table what the hell are we doing before we are even, you know, launch the company. So, we have been we have set up a new company in Amsterdam called Kivalis, which is a e-money institute that is wholly owned by today 12 banks, but as I was going to say, um we are set up like an open consortium, which means by the time we go live, hopefully at some point after the summer, uh we expect to have quite a few more banks that will join our consortium.

And for us, interoperability is basically a discussion about the unique uniqueness of money um because we are thinking in terms of maybe a few years ago, if you had money at Deutsche Bank or BNP Paribas, you never thought, "Okay, that's Deutsche Bank euro and this is BNP Paribas euro." because it never made sense to make the distinction, right? And and the discussion around stablecoins is like, "So, you have Circle euro, you have Societe Generale euro, you have Kivalis euro." And we think that's a stupid conversation because in the end, it's always euro, right? You always have, according to MiCA, the right of one-to-one redemption against fiat euro.

So, from our point of view, that conversation is already settled, right? So, stablecoins are money. So, the next question is, "Okay, so what do you do with this money, right?" So, we think the economic activity is going to move more and more on chain. So, all of these discussions about on and off-ramps, I think those are temporary discussions because we believe in the future if you start looking at agentic payments, for example, or tokenized investments in, you know, real real-world assets or whatever, everything is moving on chain.

So, at one point, we believe the equation will flip and then you will not be talking about, "Okay, so how do do I integrate my wallet with a credit card?" or "How do I off-ramp?" Instead, you're going to be asking yourself, "Can my employer pay me in stablecoins so that I can use this, for example, at BNP Paribas to access a tokenized money market fund?" Uh and so for us, interoperability is more about get making ourselves ready for the future and having as many banks already there so that when people say, "I already have an account at, I don't know, Raiffeisen Bank or or Danske Bank or whatever." uh they are already part of this thing or this future digital economy uh that we are building toward and we'll not have to think about, "Okay, is this USDC?

Is this EuroC? Is this something else?" It's going to be, you know, completely abstracted away. So, it's a bit a bit of a different conceptual approach that we have. So, do you mean that you're going to be like a an abstraction layer for like your, I would say, like the banks that going to be part of your consortium so they can really don't look about like the underlying technical asset and just saying, "Hey, this is you're going to get one-on-one euros."

Yeah, so that's Okay, that's another interesting conversation, right? Because for a bank to accept a stablecoin is not only about the tech, it's also about the credit rating, it's about the setup, about governance. So, in that sense, yeah, it's true that, for example, you a an American coin that I will not mention probably will not pass the risk assessment of banks if they want to use it for interbank settlement or for settlement of securities, but a stablecoin that was set up by banks that is, you know, regulatory compliant, that has, you know, the right setup, uh will probably have uh risk assessment such that for these banks in the consortium, it becomes a cash equivalent. And once you have cash equivalents on chain, then you can start building a lot of, you know, really innovative stuff. And so, for us, also it's not only about the tech.

We're going to start at Ethereum mainnet, right? Um so, that's of course also important that that we're going to have this interoperability right from the start between, you know, institutions, but also DeFi um because we are trying to build an ecosystem from scratch. There is no euro ecosystem out there. And that's the big challenge. So, that's going to also provide kind of economic interoperability between DeFi, between lending, between, you know, whatever protocols are out there and what the banks are now issuing.

At some point, we think you will going to you are going to have, I think, more secured DeFi in the sense that more institutional liquidity and more institutional grade infrastructure will underpin it. Uh and this will in the end lead back to what I was saying, that at some point, the equation will flip and then people will probably move more money on chain than off chain. Very very exciting to see, you know, like some people are bashing Europe sometime about innovation and and moving moving slower. And I'm French, but I live in the United States, so I hear like those speech and I I find like this is pretty exciting because I think you're the first consortium like to do this in Europe and really putting like the euro that's been pretty much missing from the space uh in in in globally in the in the blockchain space. Tony, we were together yesterday on stage also.

Um you founded like UBX about like a year ago. And your position as I guess a settlement really also interplayer for like stablecoin. I'm curious also to hear your perspective with what you heard from the other panelists right now. Yeah, great to be back and look looking at the look at what what's the exam question. The exam question for ubiquity and interoperability is really about acceptance.

We're we're in a bizarre place in the development of tokenized money where everyone is focused on issuance. Mhm. Now, acceptance is the unlock that enables issuance and enables a pluralistic market structure. So, there's actually there's a point in space-time that we can all work towards. What is that point?

It's when every bank and fintech on the planet offers wallets to their customers. Because that builds the acceptance network. You know, you cannot accept a credit card unless in the in the old days, you had the swipe machines. If you don't have a POS, you cannot accept You need the machine. If you don't have a POS POS device, you cannot accept a card payment.

If you don't have a wallet, you cannot accept a stable coin payment. So, the common objective of everyone in the ecosystem is every bank and fintech on the planet has a wallet. Now, that's the first thing for us to address. Folks in this space there are so many category errors. And here here's here's an error I hope that Kivalis doesn't fall into.

Ah, there you go. Okay, go ahead. Free advice, right? Oh, we're an issuing consortium. And we will all accept each other's token.

And we'll only accept the Kivalis token. Wrong.

[laughter]

Category error. The acceptance infrastructure needs to be mutualized. This is the unlock. Then you have a situation where every bank and fintech on the planet have wallets connected to multiple chains. Any token can be transacted across the infrastructure.

And those banks and fintechs offer the interoperability between the old world, the bank account paradigm, and the new world, the tokens and chains paradigm. So, we all have to be very very clear-headed in our go-to-market. And very often folks in the in the crypto blockchain industry they're very focused on me. My proposition. How do I win?

And not enough on our. So, there's something super obvious. If we want interoperability, if we want ubiquity, if we want the world of tokens and chains to win then the place we have to arrive in space-time is when every bank and fintech offer a wallet. Yeah, we're working on that, right? So, that's one what's that's one aspect.

And the other point, you're right, it's to say our banks will only use Kivalis because yeah, that's you know, it's a zero-sum game. So, what we're also thinking is in terms of how do we make sure that we are not the only guys playing this game, right? Because that's also like, you know, moving zeros from here to here, right? Uh and that's why we're also talking to other issuers, other European issuers, Monerium, for example, and a few others. Uh because we think we cannot uh think that Kivalis is going to dominate this.

We need more players out there. Just in order to have, for example, peg stability at Curve or at Uniswap or whatever, you need to have more than one, right? Uh we're also thinking in terms of interaction with US uh FX uh tokens or could be something like, I don't know, some kind of institutional grade FX platform. Um but the basis is what you say, uh our banks need to build this infrastructure. That's what they are doing today.

This is why they invested in Kivalis because they say, "Okay, I understand I need to invest in this. I need to offer a wallet infrastructure." For what use case? Probably first going to be, you know, using stable coins for payments or for accessing tokenized assets. Uh but this will grow in the in the future, right?

When when you have the infrastructure, then you can use it for whatever you want. You can use it for Bitcoin, for Ethereum, for something else. So, yeah, totally agree. Ivan, I see you smiling and laughing. Uh do you want to add something to this?

Yeah, I I mean, it just from from from someone who lives on chain, like some of these things are like like issuance was the focal point 2 years ago. Like like the a big part of the battle around the Clarity Act is cuz circa 18 months ago, people realized like issuance is a very sexy business, but you actually have to pay for growth. So, they were looking for ways to like distribute the yield to the user. So, at this point everyone who's like deeply in the on-chain world is thinking of okay, like how do I get how do I onboard the user? How do I incentivize the user to come here?

Granted, to your point, like people tend to live in their own bubble. But um that sort of point of view of like I'm going to be an issuer and that's that's where I'm going to capture the value cuz I I've lobbied the US state to give me some sort of a regulatory moat around this is is already outdated um today. Eman, you wanted to also to react before. Maybe not that point specifically. I know your bank.

I don't want to put you like in a in trouble with your compliance department.

[laughter]

Yeah, I can understand that you wouldn't do that. Um um like like we've talked now a lot about accept acceptance, but actually one thing which which often is overlooked is um whenever we off-ramp the between tokens, there's actually reserves also flowing which we still need to make also interoperable. That's actually something which we're So, basically you have you have uh completely in the background what's often not talked about is like different reserve banks. So, when you off-ramp to another token and on-ramp with another one, specifically with if it's large tickets, there's still the existing payment rails and um where we need different aggregators basically. So, larger banks, G-SIBs ideally, um which are uh banking those different issuers so that you can seamlessly actually swap in between the tokens.

Will every bank be a reserve bank for every token? Definitely not. Um but for selected tokens, you need to have like this high liquidity that you have direct access for for swap also on the liability side, so on underlying reserve. Yeah, so that's an interesting point because we are we are thinking exactly in those terms, right? So, we see what the central bank is doing with the digital currency.

And we see these experiments with API, you know, wholesale CBDC. And there is an obvious solution there, right? Give access to European issuers to issuers to API or to this wholesale CBDC program because then you have this deep liquidity, you have this integration between markets. Then you have a kind of a real euro on chain because it has liquidity against the central bank. Uh that's a discussion to be had in Europe, I think.

Probably we're not ready yet. But I think at some point this discussion is to happen. The central bank is always saying we are very concerned about stable coins because if they become too big, then this becomes a systemic stability issue. But it only becomes an issue if you keep this thing sandboxed and cut off from the rest of the capital markets, right? So, that's one point where we think there has to be a conversation at some point.

Maybe in a few years, we will see. Uh but I think the solution is out there. And once you have that, then this problem about having enough liquidity in the liability side also becomes irrelevant because then you have you know there's nothing better than than having a wholesale CBDC as part of your research for backing a a euro-backed stable coin. So, we hope that the the discussion goes into that direction. We will see.

Feel free to jump in, guys. I don't want to be like the guardian of the of the of the of the voice right now. But I find it pretty exciting to see like the conversation between the four of you really revolving around more coordination process. And we don't talk about tech as much as we used to. And I think this is very encouraging and healthy, I think, for the ecosystem because I would imagine like maybe 2 years ago even we would have been like, "Well, this chain and this type of token and how we need to design."

And we don't talk about this anymore. And I think Ivan, like you prefaced that pretty well. Like we solved like the the technical problem, you know, we know how to swap. We know how to, you know, represent a payment on chain. And and now we're all like more on that phase where we actually need coordination.

And um and that make me wonder, you know, four of you are evolving in the same space. You're you could be partner, a little bit of competitors in some way, but now we take the four of you in one room. And uh and we're going to do a we do a workshop. What would you like to work with like the the three others in the in the in the room right now if you were given a a choice to like have a specific topic? Tony.

Yeah, again, looking at the exam question of um ubiquity. So, I am not a fan of cards on the front end of stable coins. Um this seems to me, you know, fintech with cards on the front end of fintech accounts. If You mean credit cards? I mean cards, crypto cards on the front end of stable coins.

Like the new Neurons card, Menas card, those type of um I dislike cards on the front end of stable coins. The why why is that? Because essentially the the the general purpose token is being co-opted by the legacy uh payment rails. So, you know, let's say that we are out for a nice uh meal all together. We uh we come comes to the paying of the bill, hand over a card.

We walk out of the restaurant, the restaurant hasn't been paid. What's happened is that the card has obtained an off an authorization. And then the restaurant pays 2 and 1/2% sales tax for the purposes of getting that off and then the the payment 2 days later. If we are able to have stable coins and tokenized deposits accepted at the point of sale. Then, by the time we walk out of the restaurant, then the restaurant has been paid and hopefully doesn't have to pay 2.

5%. Now, how do we solve that? The point of sale contains something called an EMV co-kernel. That's the stranglehold that the cards industry has on payment acceptance. If we want token-native payments at the point of sale without going through cards, then there needs to be a kernel, a token a a a blockchain-native kernel in the point-of-sale devices that can accept a wallet-to-wallet, peer-to-peer transfer.

And this industry has huge financial resources. And it needs to be directed against conquering the territory needed to bring about ubiquity. So, issuers of tokenized money, chains, wallet providers, and many other participants would like it to be the case where you can walk to the restaurant, tap with your phone, and a peer-to-peer transaction has taken place in stable coins or tokenized money without going through the card rails. And in order to achieve that, there's a common project we can do. It can be a beautiful open-source project, which is a new kernel in every point of sale on the planet that accepts stablecoin-native payments without going through cards.

So, that's a common project we can all work on. Very interesting. I think you're referring to the EVM co um that happened, I think, in the late '90s on the credit card when they actually built like a consortium to make that um and we need to have that moment for crypto and having that technology for like native payment. EMV co-kernel is the thing in the point of sale that enables the contactless payments to be made through the cards networks. Now, we work on a different paradigm, a paradigm of tokens and chains.

We need there to be an equivalent of the EMV co-kernel inside every point-of-sale such that we don't have to put cards on the front end of stable coins. It's an abomination. I agree, by the way. And uh that's one of the things I mean, we respect Tony a lot because he's a very smart guy. So, that's one of the things that we actually would like to work uh as Kivalis on.

Uh UBIX can be a solution, right? I'm not here to, you know, to promote or anything. Um but actually, that's also the point of having this consortia because once you have all of these banks behind us, it's like 200 million or customers of those banks, right? There is a certain mass behind us that can help us say, "Look, point-of-sale uh providers, there is this new technology that we would like to push as part of a this industry-wide um initiative." But it will take time.

I don't think that we're going to be that we're going to have a stroll in the park trying to to establish this, right? It takes a finite amount of time that begins when we start the initiative. Yeah, so we I've I've spent some time in the house as well. Um It's an it's an incentive problem. Everybody's trying to become the consolidation point.

Everybody wants to be the nucleus around which others are are um gathering. You know, it's like, "Oh, I'm I'm going to create my my own bank chain and I'm going to have have my own bank chain and you guys are going to come to me." And then like everyone's like, "No, no, you come to me." And like, "Okay, now we're thinking of like consortiums." But I mean, ultimately, the reason why, you know, 10 years down the line like it resolves on ETH is because it is already scaled to a point where no single party can own it.

And it's like, "Okay, well, like we can't agree who's going to own this, so it's going to be that shared infrastructure." And but the problem is if you're starting already knowing it's valuable, it's very difficult cuz everybody wants to say how it's going to how it's going to work. And you know, in essence, um like everybody's going to try to apply some sort of competitive pressure, leverage, um you know, regulatory modes, or balance sheet, or user base in order to define how this thing works. And ideally, the platform their competitors. Yeah.

That's why that's why the point-of-sale thing should be an open-source project. And it should be multi-chain and not just not just ETH. But it should you know, that this is this is a a common good for the world of tokens and chains. So, I would I I very, very much think that the industry has to You're right, everyone everyone is talking about their own talking their own book. But there are some things that will engender positive network effects for everyone, massive unlocks for everyone.

So, we have to do both. It's not that difficult to walk and chew gum. Let's do both. Youmo, you wanted to add something? I mean, it's different rails, but I mean, we already see some sentiment overall in the industry.

I mean, with a move from the new app like we are all for account-to-account payments. It's not supporting stable coins yet, but I mean, it's a good move in off the industry to jointly work on how can we enable it that we in between one another can settle without necessarily having to have also on the merchant point-of-sale, which I think is going to live going to go live in the next couple of months. But of course, it's just SEPA instant. But um whenever that may spread further and maybe going a little bit Tony, as you said, like open source. Um and also goes cross-currency.

I mean, that's latest way it makes really fun. And we're currently it's quite expensive to settle payments. [laughter] Look at that, guys. We have like a panel with a lot of trad-fi we're talking about crops almost like open source. Um but I'm in complete agreement with you.

It's it's very exciting and to to to hear you talking about this. I would say I've been doing some research on that for the last couple of months. You know, the the EA being like a standard organization, I've been studying like what other industry have been doing, you know, how they've been able to come together. And in the like the EVM co was one of the thing that I've been looking at. And actually, I've been contacting the people who who built this because the story is quite exciting, you know, like they were about to fail.

And it's because they created that consortium and they were able to come together and say, "Hey, this is how we we're going to create that technology that's going to make the acceptance to to to use your word that we now have credit card everywhere in the world. And I find this extremely exciting to hear the four of you saying, "Well, we should do something open source and collaborate on on something like that." Um maybe I'll send you a proposal after after that talk. Uh shameless plug. But like but seriously, it's uh I think it's a it's definitely like direction.

I think open source and being and seeing open source also like being more and more as a as a valuable process to build with private enterprise. I I think it's extremely exciting because it's the most powerful and probably like the the safest way to build things where everyone has to keep each other in check, you know, as you said. I I have a like you don't want to capture, you don't want someone that's going to push that tech and that's going to be able to exclude. But it works for everyone. And so, when you work from a very neutral infrastructure, and it can be infrastructure, but also like a process which is open source, I think it produce, you know, really like powerful results where you can have business built on top of that.

And if you think about it, open source is what I mean, the the concept of working collaboratively has been around for a long time. But like the Free Software Foundation, I think it was like 19 1980 something like this, probably or 85. So, it's not very old. Um so, very exciting to to hear you talking about this. Um I guess I've digressed a little bit, but you know, we established like we need to have really like something so we can not use the credit card.

Um I won't question you too much, but I think there is sometimes some some way you can do actually the credit card while also having instant settlement on the chain. But I'm not specialist enough to be able to talk about that. Um I'm curious now like we we are working on let's say we have that payment system, you know, open source that everyone can use and make distribution of stablecoin ubiquitous. Um what are the next, you know, thing that we need to work on together? Well, I mean, one thing which actually, funnily enough, is completely missing at the moment on is like atomic DVP for payments.

I mean, yes, you can send one another now stable coins also in the backs business, possible technically. Um but you still need to get rid of that settlement risk at the moment. Cuz otherwise, it's just a faster, maybe also cheaper rails, but um I mean, that's the magic of blockchain in the end, one of the key promises which we still need to unlock. Well, you have lightning, right? So, I'm from El Salvador and there I can pay my coffee via lightning.

I get an invoice, it gets it gets settled automatically or basically instantly on the L2. So, that's one leg. And do you already have that in the institutional infrastructure? Well, it's it's a different thing, right? You were talking in general about Yeah, yeah, but low kick.

If it's for coffee, yeah, [laughter] for for coffee, it works fine. Yeah, yeah, yeah, I know. I know what you mean. But I'm But I mean, the the same principle applies because once you trust the mathematics to do this for you, it doesn't matter if it's for $5 or for 5 billion. It's the same thing, right?

It's still the same math. Yeah, it's just one direction. What I'm saying is like, well, you need whenever you actually exchanging two streams of payment that it's something which in the DeFi industry already works very well when you do atomic swaps. But it has not been implemented in the institutional infrastructure providers in the market infrastructure. At the moment it's still just two completely independent legs from one another and I think that's probably one of the most important steps actually for the industry to achieve.

Because it takes all the risk and if there's one thing for the financial industry what we are most worried about is well, risk. Yeah, but I mean, that's what I'm saying. That's a trivial thing, right? Because the technology is out there. It's not that you have to invent anything.

It's just about It's not rocket science. That's something which from if you just working on the smart contract layer, that's something which you can achieve in a couple in a couple of minutes. There's templates out there and so on. It's basically just about what needs to be done. Yeah, so you just have to agree to use it, right?

So it's it's for me it's trivial. Yeah, of course, it's solvable. Yeah, as I said, just something which uh the industry or the license provider needs to provide. Let's do it. I mean, so some other things that we're going to have to build on top of stable coins that we've discovered in the traditional payment space need to be transposed [clears throat] across.

So I'll give you a a couple of very simple examples. One is if we want stable coins to be useful for business-to-business payments, then businesses are you let's say Redwan, you send me you send me 20 invoices. I'm paying for 10 of them. Million dollars with a stable coin payment. I send you the stable coin payment.

How do you know which 10 invoices I'm paying for? So in in wallets at the moment, best case you get some sort of memo field. You cannot fit 10 invoices into a memo field on a on a on a stable coin payment. So this is at one unlock. Another thing that we've discovered in faster payment systems is there's a lot of APP authorized push payment fraud.

One of the measures to to reduce authorized push payment fraud is a service called confirmation of payee. What is confirmation of payee? Can I check before I make the payment that the wallet is owned by Redwan? So there are many of these lessons that we've discovered in TradFi that stable coins will have to adopt and deliver. So I need to be able to for if stable coins are going to be used for B2B payments, we need to have a seamless way of doing extended remittance information which works across different forms of tokenized money, which works across different chains.

The chains don't necessarily want to carry thousands of lines of invoice data. So the these are I firmly believe that the general purpose technology of tokens and chains beats the special purpose technology of ACH and all of these things. But we have to achieve a at least parity on some of these missing missing pieces. I'm going to fall in the trap of talking my own book, but um and we're thinking of the previous conversation we just heard uh I would say confidential privacy is like kind of supersedes all of that. Um because, you know, in the in the case of um Like invoices.

I don't want you to know how much I'm paying Tony.

Exactly. Yeah, maybe maybe maybe maybe maybe you're a good negotiator and I'm I'm I'm providing a service for 50K and I'm charging him 100. I don't want him to see that. Yeah. Yeah.

So like and we we do have confidentiality and privacy tooling existing um I think the compliant part of that that binomial is the the challenging one because, you know, different regulation, different standards, like the the the accompanying information um that is required varies from jurisdiction to jurisdiction, from counterparty to counterparty and all of that. Like some sort of a standardization around that layer would be a very good, you know, way to propel interoperability. We were recently talking to um Marco De Rossi from uh ConsenSys about ERC-8004 because they are building this uh agentic ID and reputation um standard. And I was telling him, "Why don't you build this also for institutions or for person?" Because that's going to solve a lot of headaches that we have, right?

And so I think there are a lot of pieces out there if you look at what builders are doing. It's just that maybe sometimes they are applying it for problems that probably are not there yet instead of applying it to the problems we have today, right? So uh I think that the topic about confidentiality is also a little bit overblown. So you have people working with fully homomorphic encryption which is super interesting, but extremely expensive and slow, right? Then you have people working with CK proofs uh that of course they are a bit faster than if FHE, but still it's very expensive and and and not really scalable.

Then you have other people who are saying, "Ah, then we have to go to a private uh enhanced network like Canton." And then you say, "Okay, but then you're basically trusting the guy who holds the key that he will be you know, not a malicious actor." So in the end you're over-engineering the stuff for something that perhaps has a very simple solution, right? I'm not here to tell you what the solution is. But uh I do believe that this kind of conversation in the industry has sometimes to go back a little bit down good down to earth, right?

And and not try to over-engineer stuff all the time. So I hope that uh by collaborating with the Ethereum Foundation and with, you know, open source projects that we might find solutions to problems uh that probably were not intended for it. Uh but in the end might make things more efficient, you know, you don't have to spend so much effort on it. Um which is actually what happened with Bitcoin, right? So Bitcoin was not developed from scratch.

They basically put together lots of different solutions that were already there. So I do believe that's probably going to be the same here in this particular currents we have. Um but I don't have a magic glass ball to say uh what's the solution going to be like. You know, I think actually you meant you said something about like people are solving problem that don't exist yet. I don't agree with that.

I think sometimes they they have solution, but they don't know how to formulate the problem that it's actually solving, you know. Cuz this this there's some work in some new EIPs and ERCs and I was with the use case lab from Ethereum Foundation couple like 2 weeks ago in San Francisco. And um and they showed me like one of those um and I forgot the name, but I I I really new way to have I think like intent and and he actually as they were explaining me, I said, "Oh, I think this could probably serve like uh solve a problem that it's facing, you know, like one of the that you described." And so it's connecting I think the the issue that the institution face with the solution that the the engineering community has usually already solved uh in in Ethereum because they extremely prolific. And and I think it's connecting those two that sometimes is missing the most, you know.

We we are amazing at building tech and pretty poor at building product because a lot of the ecosystem has been funded generously. So they never had to fight for a product market fit. So you have like a lot of interesting tech floating around, but like shaping that into a product that can actually gain adoption is is something that we we haven't done as well as we could so far. Yeah, I think that's perhaps the lesson learned from this panel, right? There has to be a conversation between the builders and the and the institutions because I think that's where the value is going to come out of.

I mean, there's a lot of very smart people out there and they probably have solutions to all our problems we are having. So probably that's for me the lesson from today that we should foster this conversation. Yeah, I mean, in every kind of transaction which we're actually working on, we always notice and tech and any sort of problem which could could be potentially solved by tech is solved already. It's really mostly like legal question, how to align the governance structure around it and just agreeing on not technical standards, but just kind of how can we standardize transactions and our business flow because it's not like payment didn't exist before. We just need to adopt adopt the new rail and see how we can absorb the risks which are there and abstract them for the end user to actually reach the product market fit and not just build it and hope that somebody will somebody will use it, but actually build great products for our end clients.

Amen to that. Absolutely. This is also why we have organization like the EA you know, like to offer like that uh anti-trust compliance structure for allowing conversation between institution and and and then startups. Um cuz I think also something that I witness is sometimes the at least the Ethereum ecosystem is like, "Wow, why don't you go on a all core dev call? Why don't you just post a message on uh on Ethereum Magicians?"

And and that shows, you know, how very far from the reality of a Can you imagine, you know, you explaining to some of your executive like, "Yes, I open like a ticket on GitHub with the Ethereum community for for those requests." This is not the way we we can engage, you know. I think it's I think it's our time to be inclusive for different market participants. And so the open source has a way of dealing, you know, like us individually we can do it, but there is also we need to have a different space for for like the institution to engage with the community. And and and those are like some of the thing I like I'm most exciting to build and collaborating with the Ethereum Foundation and some of the participants that have look already because the process is pretty well designed, but it's how we're going to adjust this to include other voices because right now all the conversation on the protocol and yes they have to be protected in some way you know because of the ethos of the ecosystem and I'm talking for Ethereum especially but we also need to have a space for you know like the Dutch the CD the equivalent the BNP the G all the G sub like Agora like you know BIS to be able to contribute into this and I think that's will be like a bigger lock in the future for if we if we solve that that will really accelerate because there's brilliant people as you said if I'm like in engineering and then there is people that have problems and once we allow them to meet I think it's going to be unstoppable and I see time is up blinking so maybe I'm going to leave some time if there anyone has some question and wants to to grill a little bit more our panelists over there we have a hand raising Get you Ernesto Hi guys I have a question to you mom you know you said that there's no one right now who offering swaps for institutionals right so why and how we can solve this problem how we can introduce for institutionals atomic swaps Well when I say no one specifically let me maybe elaborate on that one a little bit when you think about market structure you have like existing players who today do like securities trading who are like licensed as a CSD specifically it's kind of how it works and you have like us as banks like offering payment rails and honestly I think it's an evolutionary question rather than that it's as I said technology is there it's just that at the beginning if you look at the different transactions like bond issues and so on it's kind of like okay now we move one token yes the other leg is also there we can do it it's just a natural evolution and I think we're rather still in the beginning this will come for sure it's not like something really holding us back or so it's just learning building growing together Any other question over there and at the back I think also Um hey there so much thank you quick question so you know it was mentioned several times that you know certain issues could be solved through public goods whether it be that kernel you were discussing whether it be privacy Ernesto that you mentioned um as a whole in our industry public good funding public goods themselves open source software seems to be like quite on a radical decline so I'd be interested to know what your organizations are doing to support that are there things that you think that institutions can bring to support these open you know source public goods that will benefit your own projects as well because that's something that clearly is is being you know degrading within the industry which was doing really well say 10 5 to 10 years ago and and was funded by a like quite risky let's be honest tokenized you know strategies but now that's changed I can only speak for Equa valis right so what we are doing is we are starting conversations with Ethereum Foundation with different protocols with different authors of ERCs to see how we can develop co-develop in them and give them design advice so that this is practicable and useful for the banks in our consortium for example so that's one thing we do believe is quite important the other one is we are also very keen of open source so we plan to be fully transparent with our smart contract is everything is based on open Zeppelin so nothing you know tricky or weird and then the banks in our consortium are also starting to release ERCs for particular stuff there's one bank in our consortium that just released two ERCs for smart derivatives and for smart bonds and and they will probably also release a few more so I think at least in this small circle people are starting to understand that and they're believing this as well I don't know about you know the other institutions You know not not every common objective is a code base you know some of some of these things are business objectives or point of time or go to market strategies as I don't want to repeat myself too much but I was saying yesterday that I worked in banks for a long period of time and had a succession of people from the different chains come into the bank and say I am the best chain and all that does is push back adoption because you make the bank perform a computation that takes 3 years to to undergo and a much better go to market is to encourage the bank to implement wallets that connect to many chains So not every way point on this journey is a code base and if there were some method by which we could agree on you know the you you you back with this access to digital assets um there there are several roads to get there are several roads together part of it is is open source projects and part of it is stuff that's done in consortium um but there may be a bit of consensus building to get done I I'm enjoying very I'm enjoying very much at the moment there's a very very big Twitter spot or between Canton and ZK sync

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it's it's amusing but it it's as if is the how how are these two entities or how are these two projects at odds with each other when there are 20,000 banks on the planet who are not on chain How is that It's like we have you know we're at the edge of a great big ocean and we're fighting over one shrimp it's ridiculous So maybe [clears throat] something about what are the what's the ground what's the territory we have to conquer and then looking up from these tribal rivalries Well a united message to I think conclude because I think we are out of time right Thank you very much thank you very much to panelists a pleasure to chat with you and thank you stay with us for a minute thank you for your question guys