Stasis remote presentation

okay guys thank you for being here um with me today unfortunately I cannot join in person but I would love to present you this uh dilemma if cbdc is really a threat for crypto Universe because there are a lot of contradictory opinions and uh hopefully after my presentation we get at least more clarity where we are where are we going and why I think personally it's not a threat for the crypto univers whatsoever so first of all uh let me reflect a bit on what's really happening in the payment uh space in Euro Zone and I'm sure everyone uh witnessed it uh themselves that the share of cash is declining actually year-over-year is declining by 6% uh and it's significant number so in everyday payments we use less and less uh physical cash uh to pay for our needs plus somebody legislations that came into effect last few years banned cash payments of over 10,000 Euros equivalent so that also contributing to to this Decline and obviously the the digital payments across all of the spectrum of uh payment channels have been rising um it's uh cards credit cards debit cards all different payment interfaces uh so in a sense euro is already digital uh whether we kind of feel it or understand it it's it's happening um the the significant part of all payments that are happening through our um General consumption of goods and services is already digital and the trend is accelerating this 20% growth uh year-over-year uh what's interesting uh is that the the crypto is not part of the statis at the moment but stable coin Market has been booming regardless of crypto trading up down sideways uh altcoins dropping or uh Rising crazy Ico Ido this token generation events mcoin Mania regardless of all that that is cyclical the the massive Trend in the in stable coin market and as you can see uh the the market cap of the stable coins is already healthy 50 billion but the number of uh transactions number of holders individual wallets holding stable coins number of U uh transfers and total volume which includes defi transactions so in a sense they counted um several times but the point is simple that if we extrapolate the grow rates for the 2024 uh what what has uh happened already it's already exceeding historic Norms um the stable coin transaction volum so that's just another confirmation that we consume a significant portion of our um uh digital Assets in the form of stable coins and that we use them to pay uh our suppliers our contractors pay salaries um do crossborder transactions and obviously use them for speculative purposes to trade in Defi and centralizing ex changes but to make uh another argument about the share of digital payments it's also a part of that statistics which is not yet public because until MAA the stable coin has not been accepted as a legal mean uh of payments so n will change that but that's a topic of a different conversation so what exactly isbdc and why people think uh it could be a threat well obviously the Central Bank cannot uh uh just sit and watch that there's such a massive demand for digital channels to to pay and to receive and store assets and uh money so what they were started to look into is to introduce some technical solution where customers or say individuals have access to direct central bank account uh with some say form of money uh or some balance of that account and I argue that it's will be just a replacement of metal coins for for a number of reasons but let's just reflect on this so okay imagine you have an account in Central Bank uh and you've got some wallet uh from from central bank right where you can store some funds what will happen is uh you will immediately um move funds from other commercial Banks to that account because in a central bank supposingly there is no risk there's no credit risk the Central Bank cannot go bankrupt it cannot uh be liquidated right and so your deposits uh cannot be lost um and this is what central bank is not uh uh allowing to happen because if a commercial bank system loses deposits then it will not be able to lend uh money to the economy and then the whole economy uh will shrink massively so Central Bank needs to figure out some solution which first of all must be available 24/7 online or offline in all of the 277 member states plus EA area in all remote places where there are no internet or maybe not even electricity there are some places in Europe which still do not have electricity or it's not 247 and central bank has to provide a technical solution which will work there to to replace some form of cash uh why why is that because Central Bank is a mandated institution it has to create something that has a legal tender legal um obligation to be used in all payments of services across uh Nation across the country so it has to be some solution which uh uh basically will be a replacement of some physical cash some uh money that anybody can access and give to a service provider or supplier or point of sale grocery store post I mean you name it or even a taxi driver and obviously it will come in a form of permission some centralized infrastructure there is no point of using any open- Source blockchain here it will be some centralized database that will store this uh information about particular uh users particular accounts and and their balance so let's uh look at all the setups that are currently either in uh operation or um in design so okay you've got this commercial uh banks that have accounts in central banks right and that can provide um accounts to individuals and corporates the safeguarded limit there is €100,000 Euro uh that's the amount you are guaranteed to um be compensated if the Commercial Bank goes under because a Commercial Bank is a credit institution it lends money it uses a bank multiplier um and if the bank on a run happens the bank may not have all the money to give all depositors which just witnessed another situation with credit Swiss which lived 150 years and then in a few weeks time it collapsed so uh in order to keep economy going there is this insured amount which uh protects depositors and uh uh make them feel safe to deposit money with commercial Banks now on the right side there is this central bank account right which will offer you the the way to send and receive some form of digital Euro which we call cbdc and interest interestingly enough it's impossible to have unlimited balance there right because then anybody who is keeping funds in the commercial banks will move money to a central bank and the whole Commercial Bank lending Market will collapse so uh cbdc is already uh designed in a way where it has a strict account limit in its current uh Tech paper the limit is just €3,000 per account so um on on the other side the are stable core initi who will be n licensed who will have some rules how they segregate their funds and under psd3 which is a payment service directive three coming online 2027 they have will have access to Central Bank infrastructure as well so a commercial stable Co issue is something that is regulated that is unlevered it doesn't have any Bank multiple or this one to one uh always one to one uh reserves invested in in some government bonds which is the safest way of uh allocating funds to generate some Guild then it will have uh the central bank accounts actually weed uh this setup um our stable coin stores some of the reserves in uh European Central bank and then it will have some commercial Banks because under regulation again there is the same dilemma if uh Regulators allow this narrow banking it's called concept then people will move money not to central banks but to say commercial stable Co issuers who have accounts in central bank right so this is why this is why if you want to get any yield on your Fiat instrument the only way to do is to access a commercial bank deposit if you want to have a flexibility of issuing a commercial digital Euro uh at the same time uh Safeguard properly safeguarded you could buy mcro regulated stable coins you you won't get any yield out of these issues uh we are restricted to to paying yield for the same reason because we allowed to have the Central Bank infrastructure central bank accounts or if you want to access pure central bank money it is exactly what will be called cbdc but keep in mind that given that there is very low limit just 3,000 EUR per account and I think the banking Lobby may push it even uh further down because 3000 doesn't make sense for uh uh for them either and um and and then it's just a replacement of metal coins we used to keep in our pockets to uh pay for say parking or a trolly in the grocery store uh usually when there is some consultation about particular regulation that is coming the limits are only going down not up so in the first one uh the limit was 3,000 but I anticipate in the final version of uh this cbdc uh product the limit will further decrease so uh where we come into this and how we became the biggest Euro stable coin in the market uh we always thought about the stable coin uh as a regulated product and um I was the first to introduce some form of Regulation uh in Europe um with the help of the local government back in 2018 um and then uh we also were the first to bring a proper auditor to the table to audit the product and to provide customers with the assurance that assets are held one to one and then also significant boost for our adoption have happened when we started taxing the central bank account in Lithuania and making payments uh from from that account on behalf of our customers and receiving funds there because uh it was very convenient safe and uh fully electronic fully digital so you could argue that a commercial uh stable Co inier who holds money with central banks is also uh form of cbdc but uh the difference is that it has no limit per account it runs on public blockchain so it's fully programmable you can do whatever you want with it it's self custodial uh because the cbdc uh from the central bank will not be self- custodial it will be still a centralized database storing information about your account also CBC will never generate you any yield while the commercial uh stable coin uh under MAA which you self custody you could access some yield uh in defi iies which is relatively safe and not regulated for now um and then yeah basically that that's that's the that's my argumentation for um to prove the fact that cbdc will will just replace uh our metal coins which by the way are already a drag on the economy in order to circulate this coins through through the economy um commercial Banks and central banks have to uh pay significant uh costs because all these coins need to be minted they need to be uh collected uh from from the commercial Banks they need to be circulated so it's already economic benefit if consumers switch from something um that represent Euro in its physical form in form of coins into cbdc which will be um same basically product but in the digital form or you could expand um uh your options what you can use with the digital Euro by accessing privately issued stable coins that are regulated in Europe so please uh if you want you can try accessing our stable coin this very very simple and easy how you can get a hold of it or even we are short uh in time here um you can follow up with any questions you might have that's my Twitter account on the left or my email or even telegram I will leave this on the screen for a while thank you for your attention [Applause]