Solutions in Banking from a Technical & Business Perspective

[Music] everybody to this now valentine we're live now we're live now yeah thank you okay thanks victoria and um yeah hello um dear audience of the evc i am valentin zierhausen ceo of the digital eu association and it's an honor and a pleasure to motivate this panel um with um two very exciting guests i'm here with luis cabacho co-founder and ceo of uh vutun and sudhir upadhyay he head of engineering and executive director of onyx link of jpmorgan we will hear more about both projects in this panel and i may kindly ask you to uh introduce yourself in alphabetical order maybe luis would you start and to introduce yourself hi hi sure well first of all thanks for having me here i am luis carbaja i am the ceo and founder of botun we are a startup that has been developing blockchain solutions for over three years from some of the solutions that we have on our platform we lately are testing one with the central bank of spain that is a payment solution in the blockchain stellar that basically will make it easy for corporates for corporations to use crypto uh to make crossword payments so happy to to be here i'll go next um again as luigi mentioned it's an honor to be here and thank you for having me here i am and i had the engineering team for lincoln digital assets at onyx which is a line of business within jp morgan uh focused on uh blockchain-based solutions uh for financial industry um and um and i've played multiple roles within the organizations multiple roles within investment banking from credit risk mark address quorum engineering iml and finally uh into blockchain space and again yeah very excited to be here and and sharing my experience and um with your audience so absolutely fantastic yeah thank you very much the digital euro association is the think tank that focuses on cbdc and digital uh payment infrastructure programmable payment infrastructure and this is why i'm very excited to talk to you both guys um both of you because um yeah i think like your companies are really on the front of developing a infrastructure that it's like very um like progressive in technology technological terms and um i would like to have this discussion about you and that's a short information for the audience we are all three um very tech safety and but we agreed to like um yeah leave leave the tech side out a little bit but for the developers and especially the young developers in the audience we agreed that we will have a very short um career opportunities session at the very end of this um this panel so yeah i'm very happy to dive in um maybe just a general question at the beginning um which uh challenges and considerations to private banks and institutional investors and corporates face when when they implement blockchain technology again alphabetical order maybe luis can you start all right okay well i guess that is for me i think that right now the main challenge is to to really understand what is good and disruptive uh versus what is something that is not drastically um meaningful for for these private banks because at the end of the day there are a lot of solutions that are already in place that blockchain seems to provide a better tool to do it but you need to really go deep and identify that's true or not so i guess that to sort out what is really good and disrupted versus what is like something that improved the system but it's not really something big it's what is really challenging right now especially because there is so much hype from the space that sometimes you you know sometimes people don't they need to do i guess a better due diligence in what is good out there so dear what is your approach yeah of course i think i'll just extend uh lewis thoughts and you know views right uh in my opinion there are really uh three uh three aspects number one is education number two is integration and number three is adoption right um and by education i don't necessarily mean like you know blockchain 101 and content there's a lot of public literature there's a significant amount of knowledge that community the blockchain and developer community and has done to actually spread that knowledge i think what's missing in general especially across the enterprises industry is how does this actually apply to solving a business problem right we all sometimes we put our technologist ahead and say hey here is a technology let's just implement it rather than and you know putting that solution in the context against what i think lewis you're kind of referring to that is putting that in the context of a specific business problem and once we identify and have the business leaders actually correlate to that that it becomes a lot more easier the other so other part right and in especially in enterprises is around the integration um we all know blockchain is definitely evolving and and and will continue to mature over a period of time um and but however it will still continue to be you continue to remain a part of the ecosystem right and what i mean by that is if you are part of an ecosystem then the integration becomes extremely important how you actually integrate with existing you know traditional existing systems in in an enterprise or organization unless that is solved in a very effective manner we will continue to have some of those challenges in adoption right so in my opinion those are the really two uh if i can you know sum it down to two challenges that those are two ones that i i find um and we need to work together as a as a community on solving those challenges yeah thank you very much um especially for i'm shedding light on ecosystem and integration into business processes and i want to dive deeper on this but um before that um luis i have a direct question to rutong because you are um like we all know like ecosystem is important there are different blockchains different programming languages rust solidity golang and um yeah i think the market has to like has to for i don't like we don't know what will happen but your um your platform works as a middleware to certify and track data and um digital assets in the blockchain and i think your approach is a blockchain agnostic and you can work with private and public blockchains and yeah how do you select um the blockchains for the use cases and um yeah what would be your advice to like maybe even customers on the selection well this is well this is something that when when we start we were sure that blockchain standards were not very close to the market in the sense that they were different solutions is a fast-paced stay a space where a lot of innovation is going there are new protocols that are coming out every year and quite honestly some of these these new protocols really make a huge difference compared to the previous one so from that point of view is why we decide to keep our platform blockchain agnostic because we believe that what it was a great blockchain solution last year maybe it's not such a great solution this year and the business need to be able to adapt and to adopt whatever network is better for their business program so from that point of view is that um why we keep our platform blockchain agnostic and can work with different even private or or permission based blockchains versus public blockchain so once we try to put together a specific solution for a business program what we try to dip deep is in what a specific this business problem needs is transaction output is costly is exactly what needs because i think that different networks have different solutions for these kind of important questions and you need to have to basically pick whatever is the best at that point and that is basically what we do if we are thinking about for example payments yes there are a lot of public networks that they from which you can do payments in the blockchain but which ones are the best and for me there are like three or four networks one of them was stellar and we that's why we pick stellar in this case for a specific payment solution you will talk about nfts maybe the the network will be different right we will be talking about ethereum we'll be talking about polygon we'll be talking about new ones that are coming out right as we speak so this is why we try to keep this layer agnostic and from that point of view pick whatever network really makes sense at the point of where we are building that solution yeah thank you very much for this answer and um yeah i'm giving it to you soon here because i think now we are coming to the synergy of this panel because um um luis you like with your company you are basically building on the blockchain but so there you are i'm heading a development team that is actually building building building a blockchain yourself and um with uh um onyx link or maybe you can shed light on this at jp morgan you implement i think it's an enterprise permission blockchain and um yeah so what is your approach on on like yeah what what louis said and like yeah maybe even one of the best um best practices regarding implementation of the enterprise blockchain yeah sure um so before i go actually again uh i'd like to extend the thoughts a little bit more on the in the prior question as well right although it wasn't intended for me but i'll you know i think so and it's spot on right like for for me as the person who's actually heading the engineering team for our business so for me the most important thing is how do i solve the business problem what specific technologies whether it's permission public private as long as my objective of solving the business problem for our business stakeholder holds true i'm willing to take you know move into that space regardless of what the current state of the technology is but i have to solve that problem so um permission at the moment and private permission at the moment because that's where it solves the business form related to payments privacy uh you know if you are doing in the in the digital assets market space right we need the most important thing is privacy and performance right and payments uh jpmorgan does like close to six trillion by the way six trillion payments clearing every single day that's perhaps you put things in perspective that's perhaps one-third of the united states gdp right um or perhaps you know it's double the amount uh what apple actually reached yesterday the three trillion dollar uh you know market cap right so yeah wow so um so to me solving those challenges are very very very important right um now coming back to your specific question around permission blockchain right what are the practices um uh going back to my earlier answer related to the ecosystem aspect of it right um blockchain is a small vertical within the entire ecosystem and it has to play nicely with everything else that exists currently right uh the cyber the risk controls the legal um you know appropriate software design the reporting higher archival of data there are n number of things that are just you know an extension or should integrate well with the blockchain layer right and a number of existing software design practices hold good in even the block units and and we all know that you know even though it has picked up very recently the technology the multiple aspects of the technology have existed over decades like you know from cryptography to consensus algorithms to all of those it has come together now and it is almost like from a blockchain by itself but underlying technology stack has existed for decades in in some cases uh and the standard software design practices continue to apply even as we evolve like you know the blockchain space yeah thank you very much i um luis maybe do you want to react directly before i ask another question that he is making very good point right in terms of specifically what are the times that they face it's true it's not easy so nothing more to have yeah and to react to this maybe um like what do you what do you think are the like key risk from a technology and also from a business perspective in uh in adopting the blockchain technology that is like yeah maybe like also easily overseen in the public discussion like what what are like some insights that you can share sure um so the good thing about public one is that the platform exists like and every year perhaps every every few months there is a new platform coming and and it's competing which is good for the community and good for the overall you know in this space right and at the same time it does already provide some sort of resilient environment so you have ethereum and you know and the new ones i won't necessarily name or endorse any of those but um there are a number of platforms coming they're well resilient and in some cases you know independent by itself right so as as a as the d app developer let's just say uh that doesn't have to worry about the resiliency feature the security feature of all of those when you move into the enterprise blockchain you and if you're building our permission networks in that case you have to worry about every single things the failover the resiliency the risk management all of those which are in some form already or do exist in the public version has to be managed effectively within the enterprises and those are the risks that i have to manage from engineering perspective and our business has to manage from their business perspective which in some cases in public domains you already have it like you know ethereum is sensitive resistance and all of those so um and at some point i do see it some kind of hybrid mode where there could be interaction between or you know interoperability between the enterprise ones and the public ones and and in those scenarios uh and when that happens there is a potential that we could manage those risks and challenges much more effectively or with much less uh you know investment than what we have to do right thank you very much and um i've got um actually two questions from the audience that perfectly fit to our guidelines it's uh riki nakamoto thank you very much and uh there's you um also dear member so a shout out to all dear members um it's about stella and luis you work very tightly with stella and um yeah so yeah maybe could you tell the audience yeah what you build on stella and yeah what you're actually testing with the central bank of spain right yeah so we we're really excited about what we are trying to accomplish in so basically the central bank of spain last year or sorry this year they put together a fintech or sandbox sandbox for fintech solutions uh we were one of the startups admitted to test our fintech solution and what we are trying to do to check with them or basically what we are trying to prove them is that companies multinational companies can use crypto in this case stellar for doing this cross-border payment with complete um or with fully compliance with all the financial requirements that they have in different geographies as you probably know for for cross-border payments companies they still use the swift system the swift banking system and there are better options that is the same system that they have been using the companies for over 30 years and technology allows now to be to do better faster settlements and one more thing that is kind of interesting for us to explore is the use of what is called stable coins because i think that that could be also something that can be used by corporations if they obviously if they find that is fully compliant with the financial or the regular um rules that they have today so in this uh solution we are partnering with pricewaterhousecoopers that they are our integrator partner with big companies in spain and basically with them we are checking how they can do these crossword payments between geographies using our system that's completely outside of the banking or the traditional banking system and be fully compliant with all the financial rules that they need to comply with in all the geographies okay thank you very much and there she has a statement that seller is perfectly perfect for an institutional use case [Music] would you agree on that and we will talk about this in five minutes later well i i think that we i i agree especially especially we are talking about the financial services and payments i think that that is a great infrastructure i think that's why stellar has been also very active on the cbtc space or trying to identify how their infrastructure can be used for for cbdc so i will agree with that but with this kind of discussions is i think that is it's always useful to say uh is very good for institutional cases yes but for what cases you know because at the end of the day it came down really to the specific use case that you need to provide a solution for us so here we're saying is a business problem that we need to solve because obviously the technology is nice it's cool but you know this is the best technology to solve these businesses and if this is the case stellar i again i think well obviously what i can say right but we believe that is a great infrastructure for for rather use cases especially in the financial services yeah thank you very much so um both of you have i would say like this extensive knowledge about business processes in this very strategic approach like choosing choosing the right technology for every like business process or a model and um here i think um it's it's not very clear to our audience that you are actually building your own blockchain with onyx link right did i get it right and could you like maybe explain like why you choose to build your own blockchain uh yeah so a minor clarification we are actually not building uh an underlying implementation of the blockchain we are actually leveraging an existing blockchain of course ethereum a fork of ethereum which is quorum uh quorum was a fork of ethereum that was initiated way back in like 2015 where uh our team added a privacy manager primarily and different consensus algorithm on top of ethereum uh which is more suitable for enterprises right and as you know as the consistent theme during this conversation has been is what is right for the business what is right for the business and solutions in that case raft actually provides us a much more um uh much more deterministic results compared to some of the other consensus algorithms that is there in ethereum based solutions uh so um within onyx so as i've suffered earlier onyx is a newly formed business using within within jp morgan uh and and as you can find from its public site we have three main uh stripes uh one of the link which is the interbank information network for um for resolving payment related inquiries right and i will go if you have time i can go more in detail but uh that's for all of the payment related use cases uh then we have onyx digital assets uh which is for all the uh you know digital assets tokenization on on the block on the permission blockchain and finally we have coin and clearing system uh for uh that actually uh you know uh relates to jpm coin and so forth right on the um so we are left we are leveraging quorum to build solutions blockchain based solutions uh for uh peer-to-peer interactions for digital assets coin and interbank information network uh which by the way has close to uh 400 participants that have signed up and 100 plus you know in just about two to three years time frame right on this on the digital assets side right um we actually launched uh an intraday repo project about just about a year i think it might be just about a year right now um and and for the for the audience some of you are familiar with what a repo is report is a repurchase agreement between two different counterparties uh on for a specific asset so for example if i sell you an asset then at the time of the selling itself i actually get it and enter into an agreement with you that i will buy back at a specific price and a specific interest rate right and so far the repo market has been pretty much a specific duration because of the logistics involved in settlements so forth so always overnight and above in this case we would actually do intra day which means you could sell an asset in the morning and buy six hours later and do a settlement that has been amazing so there's a lot of news if now i can send the links to you to the audience after that but that's the digital assets part of it on the link side we also have account validation service which is confirmed so before you send a payment to a participant especially for the cross-border payment and we leverage the peer-to-peer interaction between two different participants uh for uh for those services so in a nutshell there are three stripes and all of these types are based on blockchain out of the solution that we built so the rumors are correct that even the banking sector and interbanking sector can highly benefit from the technological innovation of a blockchain system right of course of course nice and first yeah it will definitely be leveraging i mean technology is at the heart of uh you know uh heart of our solutions right we of course relates to the business and we are definitely going to leverage uh those technology whichever is available and suitable for the business i think this is a very nice key takeaway message obviously our audience is also very interested in the blockchain realm in general because there's this question about scaling of scalable blockchains like solana and avalanche or layer2 solutions like polygon and um yeah potential i'm utilizing in the industry obviously so maybe um yeah as a last take on this um yeah what are your thoughts about like scalability and layer one solution and uh i i luis i know that um you are also i think you are kind of implementing a layer two solution on a stella so i mean layer two does not always mean ethereum so maybe um yeah a minute about that louise yeah well very quickly i think once scalability has been an issue in this some of the solutions that you are able to put together in this industry especially at the layer one level so layer two are very good options to implement better scalability solutions but when when we are talking about layer one versus layer two i think that we need to go a little bit deeper and understand what kind of player to one we are talking about because once again if you are talking about uh bitcoin is very different than ethereum infinite is very different than stellar so this layer one are very different between them or if you talk another one like algorand or solana right so there is something new kids on the block and since then they are having so many benefits so yes i think that the year one have their limitations and you need to be careful which you are choosing to put to build your business solution on top of that and it's true that layer two are helping with some of these issues especially with scalability i think that polygon is the best example of what disabled or they what they have been able to do with with ethereum blockchain uh and the nft market probably is one of the best examples in which you know the meeting of the fees were so crazy in terms of price and a different blockchain that you know to implement some uh layer two like polygon uh has solved this this issue right because the cost of the transaction is much lower than that so um once again i think that depending on what exactly business trend you are trying to to to solve player one um which is the way to go if or if you have scalability issues yes liar two is possible in the stellar blockchain is very recent that the layer 2 has been coming out there is one it's called starlight that i think that is very interesting and so if you are curious about layer 2 options uh definitely i will take a look on that one because it's very very interesting the solutions they're applying to make it more of the payments infrastructure okay thank you very much we slowly have to wrap it up i promised some carrier advice so maybe what do you consider when hiring a developer team what carry advice would you give young developers or even like non-tech persons that want to go into blockchain and plus some like last sentences from you maybe sudhir do you want to start yeah absolutely i think the most important thing that i look for the hiring engineering and team is number one is how the core engineering skills and number two is leave hungry hungry super hungry to learn something right the technology is evolving so rapidly that you know um uh i can't expect someone to have like five years of knowledge of blockchain and you know those are more like synthetic you know skills right i think really uh core development skills core engineering series and hungry to learn i mean some of these technologies evolve over a period of time and one can catch up very quickly on those uh at a very rapid pace as well as long as you're hungry for learning completely statement there is no so much experience in the market so you are hiding people that are really hungry to learn and that they are really exciting being on that space and and learning new things every single day completely agree with that career advice yeah thank you very much uh i think the space is just super exciting so hi victoria and thank you very much for having us here you okay thank you so much lovely discussion and guys if you have more questions for them please reach out to them through the people's tag and now please go to the next section all right [Music]