PANEL: Using CBDCs & Stablecoins Across Borders

[Music] thank you [Music] big places [Music] hi guys so first of all thank you for coming out I know lots of you come from different parts of the world coming in and welcome to Paris to uh to launch ECC was a very very intense two days on stable coins actually I believe it's one of the most perfect places to have this kind of talk if you know a little bit about the history of France we have La Moni De Paris where you have one third of um the minting of the money for the whole of the European region which is actually minted here in Paris so before we start delving into worldwide schemes and cbdc's and stable coin across borders I'd like to introduce our esteem panelists so on my left we have Xavier to CEO of Eakin and also advisor on cbdc implementation and writers of various papers on the subject then Tiana uh tell I'm really sorry Tiana thank you very much Tiana Baker Taylor that's on me who is VP regulation at Circle and in charge of regulations and strategies and Julian woodloo who is CEO of many different Ventures for example Blackpool so many of them state capital groups take Dao and core team advisor at Curve so coming from my experience has commissioned right on global digital governance standards I'd like for us to remember that the first unit of money digital or otherwise was essentially to replace Bata now the first currency the Mesopotamian shakeel came into play 5000 BC when they found themselves into battle with misopotamians and Babylonians now coming from Mesopotamia to make her Towers die in going through the Chinese crypto Yuan there are as many different ideological cultures and opinions that need to translate into cross-border barter but before we focus on the friction points of cross-border monetary translation Xavier can you redefine where we are with between central bank digital currencies and stable coins so hello everyone I'm really happy to be here and congrats on organizing all this event it's been super interesting and and also we had a perfect talk just before uh interesting also a very interesting research on on this topic on on cbdc just to to have the The View you you all know that uh all of this is happening because of stablecoins and particularly um also DM a couple of years ago that that really shook uh central banks I think one one thing that happening is central banks are realizing that they need to provide money everywhere because they still are the one that that provides the the reference that we have discussed this yesterday you've heard some conversation about uh even stablecoin are still they nominated in uh in Fiat currencies so in a sense they are still pigging back on on the on on this IDs and so the cbdc's is just a money that's issued directly by the central bank but there is nothing new in that they already do some form of digital money in in the systems what's new is they are inspired but have what's happening in blockchain and trying to make it a little bit easier to access it to exchange it and to move it around and they are doing many experiments in this so I know in the crypto ecosystem that is often a negative view but in my view it's really at the moment really cautiously trying every declination of what's happening in crypto to provide the what's their role to provide money thank you very much Debian so Tiana operating at your level at Circle can you underline stable coin use cases and pick one of your favorite five cbdcs that are currently in usage so what was the beginning of the question if you could underline stablecoin use cases on your experience at Circle I think we've seen quite a few um so uh as Jim was saying earlier we're seeing a um growth increase in cross-border and cross-border remittances FX humanitarian Aid payments is another area where Circle specifically has had a number of Pilots go live in the last few months most notably with unhcr stellar and MoneyGram we've been making and enabling the unhcr to use usdc to make payments to those displaced in Ukraine by the conflict and so they receive usdc in a vibrant wallet operated by Stellar they can walk into any MoneyGram anywhere and withdraw those funds and whatever currency they need and obviously can continue to hold whatever they don't need to withdraw at that time safely on on on their vibrant wallet so that's just a couple of use cases that are you know completely removed from the crypto Capital markets use case um I think that we're we're also seeing an increase in consideration for how stable coins will be used within the payment stock so Visa Mastercard other traditional payment infrastructure rails are looking at incorporating things like usdc that are fully reserved stable coins so the Fiat backed non you know algorithmic version of a stablecoin um into essentially the the Shopify experience so you know soon in the future you will have the choice of checking out with your Visa your MasterCard your bank account or your wallet that contains usdc so I think that we're starting to move into this utility phase where we're moving away from you know the initial intended use case of being able to facilitate the flow of value I would agree with the earlier speaker that these fit backed reserved stamp coins do act as a platform for other type types of daps and businesses to to build on top of and facilitate kind of frictionless movement of value the second part of your question around you know five cbdc's that I'm excited about um I'm gonna say I'm not really excited about any and and I don't think that there's five that are live there might be a few in Pilot um but for me in those that are in Pilot and those that are still in design I think we still have a significant challenge to surmount privacy concerns a number of these cbdc's are not being issued on open source technology they're bringing on closed loop which to me begs the question what's the point they won't be interoperable they won't be exchangeable um so you know that is not to say that I don't think that there is a use case for cbdc's but I think it's at the wholesale level and not at the retail level personally thank you very much you're perfectly right actually the from the the latest numbers from the the bis there's about I think a 100 different uh cbdc's like 130 between 2023 and 2030. so they're in actually in Pilot processing they're not still launched yet um and we're putting the the finger on the major pain Point here is how is the fights going to be taking place between uh stable coins which have actually are working in are are moving those liquidities through barges and the cbdc's that are going to be coming in so I was thinking to you for that one after it was really quickly let me address that I just want to challenge the premise that there's a fight so every one of these panels that I sit on um lately has been cbdc's versus stable coins we have a system of public and private money today works very well um now you can argue that the two-tier banking system disadvantages some and there is a reason why we're implementing these decentralized Financial Technologies um to increase access and to allow for more Equitable equitable distribution of wealth and value but I don't think that it's a war and I think that they will coexist they will serve different use cases and you know there is a potential for example um the head of the New York DFS proposed that at some point in the future if the U.S were to issue a cbdc there would be no reason that that cbdc couldn't be the backing asset for usdc by example so um I just I challenge the promise that there's a war going on I don't want to go to war with essential Bankers personally please do challenge the premise that's what the debate is for Juliana if you have any thoughts on that yeah I think um I completely agree with you this car system has been trying to position defy as the system that will replace the current system but to my opinion defile defied and and the different uh features that are on pouring the empowering this technology will just enable uh to solve many different problems in uh CFI so what I believe is not necessarily like defy or stablecoin will become a major mean of uh like transferring different assets but I think like cbdc will become unfortunately the biggest stable coins in the car system because this is where the liquidity is and they will be used as a collateral to some of the decentralized version of those stable coins um I don't necessarily agree with the statement that all the cbdc today are not necessarily are not very good I would say that I think one place that is very interesting to look at cbdc's Europe why because of gdpr and because of privacy first and not saying that the wool and the by building something that is serving people in retail first because um it's it's always a lot of lobbying but if we normally look at building a new technology with the framework that is currently in place which is for example gdpr it's it's a framework in place to respect privacy for people and also end-to-end encryption so normally this should be album and they should enforce the development of a cbdc that is close to something transparent open source not necessarily completely open tools but can actually serve the retail people and the people on the ground so I think there's only one place in the world that I see the potential of using a cbdc that is as close as a stable coin in a D5 place is Europe I don't see any other place yeah but the proposed digital Euro today is not going to use open source technology as designed right now or in discussion and it has a number of caveats for yes we'll put privacy preserving technology or safeguards in place but they've yet to articulate how certainly not using any of the current technologies that we would be talking about you know ZK for example there are transaction limits so right now it's proposed that you can only hold 3 000 at any given moment there's proposals where it's time limited so if you don't use it you lose it like how does that work that's not money that's a gift card so I think that you know I I challenge that because I think that Europe has been working on this for some time and we're now starting to see leading into your political statement a significant amount of black backlash from numerous areas across the European commission parliamentarians and you know even commercial banks that are very concerned about the current you know plan of travel with the digital Euro which is exactly emphasize my point I think the most advanced version of cbdc that is close to civil coin is in Europe but as you said still [ __ ] so meaning that the entire rest of the cbdc are [ __ ] but the best of the [ __ ] is in Europe currently foreign I think we have an end of the debate ladies and gentlemen [Applause] this is the Diplomatic version the voice of reason coming that was a diplomatic version no but but um just to say that in Europe there is actually to me three digital Euro projects because the current proposal are retailed and there is almost two versions of the retail one is almost a PayPal app and I agree with you it's a it's a bad imitation of what we have seen in the web to payment space in in the last decade it's a bit weird to to see um trying to to do again the same thing what's what's really bringing but the problem is as I've said before the Central Bank feels they're getting disconnected from what's happening in payment and they are trying to find a solution in the retail although in the current proposal there is this offline payment that will be fully Anonymous on the limit so I think some ideas that are dear to the crypto ecosystem I think are getting into the institution there is enough people inside trying to push that but the most important info conversation is there is another digital Euro project that's the world sell and still in a more early phase and I think here that they are getting really closed captioning not available [Music] DM you know knee Libra and the idea that we would you know decentralize monetary sovereignty the Europeans had a you know very allergic reaction to that um however if we're looking at the way that some of these cbdcs are proposed you know we still need banks for some things in my opinion right I mean Banks create credit uh stablecoin issuers like Circle do not were a reflection of the current monetary policy we're referencing the the Fiat uh um the dollar or the year out so um in that case I think that it has challenged them to think about how they will be able to kind of plug into not necessarily just you know the a web 3 ecosystem right of of on-chain 24-hour transactions but all of the things that we don't yet know will be um digitized I guess and it is a crappy way of saying it but that next level I think what the challenges today looking at it through the lens that they're looking at it was a better version like a faster horse right of you know the current horse that's pulling the cart today if we're not going to reinvent the distribution of central bank money in a way that is constantly upgradable and that allows for interoperability central banks will be in the same position that they are today that's not going to change the velocity and then from a commercial Bank perspective if cbdcs are capitalizing on Commercial Bank deposits I think that is where those commercial banks are having significant concern which goes back to in a loop the challenge around monetary stability and sovereignty so I just don't think that they've figured it out I think that's been a reaction talking about infrastructure also as well and interoperability really looking at it from a technological standpoint uh Julian Xavier what are your thoughts on on the most optimal way that we can make sure that stable coins really circulate across borders without any friction without going through Bridges um I think they are two different pieces of technology that completely change the view on cbdc and stable coins and and broader scope of of the blockchain ecosystem the first one is account abstractions and the second one is one of the Technologies you mentioned and I think it's zero knowledge proof at the moment central banks and regulators and all those guys are on the reaction phase where they're trying to not necessarily stop uh people from having better safety net or access to monetary system but because they don't really necessarily understand and it's not because they don't want us because they're not sufficiently educated in in this ecosystem because they already have a job they already have a certain scalp of understanding and they on the daily basis doing their own their own jobs so for them to understand what we're building on our side it's the same as us we don't necessarily understand what's going on in the European commission or on the uh International diplomacy level so my point is as soon as they start understanding the power of those different pieces which is a construction where you can not control but not manipulate either but interact with people money but guarantee that those people they are always in the ownership of the asset that the Earth and then secondly if you can bring zero knowledge proof to make sure on the kyc AML aspect of uh the regulatory framework then you basically solve all the different issues because as as you mentioned I think that was a good point we all need the current system being I think I still like statistics were more than 90 percent of people using uh Twitter or a tick tock of Facebook they don't remember their password so how can you tell billions of people in the world that not your key not your money I think this is good for less than 0.1 percent of the population worldwide which is like geek and and developers and people that really understand the underlying aspect of the technology we are building on top of but for the rest of the people we need the current system to help them be safe and also transact with those different tools and the only way we can achieve this as again it was a good point we're not in War what we are is a way of knowledge trying to educate people that those type of features are necessarily important for them to fight the current problems that they are facing which is basically I don't know silver Bank closing down uh ATM being hacked on a daily basis people stealing money I think those type of features not us trying to Circuit please use defy you need to use D5 because I think this is [ __ ] what we need is like look we have built some features that are empireing D5 using some very Advanced mathematical and and concept about uh Game Theory I think you should adopt them there's nothing to do with the thing that we're building defy if you don't want to but it will solve a lot of you different problems and as soon as they start adopting those different products for us is easier because we can also Connect into zero knowledge proof kyc ml mechanism you guarantee that those fun are used properly without actually knowing who's using those fund you can also interact with people money without actually control the money controlling the money and then on go across border it's a it's a miracle because you can interact cross-border without necessarily going to uh or removing the concept of blockchain which is anonymity and being able to control your own funding Etc um on on technology I I see your vision and I think it's one path but I'm not sure it's the fastest route and I think there is an option for instance for stable going to be used for cross-border payment by just having as you're experimenting also intermediaries at the entry point because the technology full technology vision is really hard to do to implement even the range proof that is lack of people manipulating uh about to to build system and also the lack of understanding of people might be so there is a need of customer service of different options and I think at some point maybe it's great that we work on this on one side but I think we have to acknowledge that for a lot of scenarios and especially the most um uh like in in developing countries people that are not least iterate a note of financial literate enough you cannot ask them to understand account abstraction so it needs to be um maybe a customer so it's not on the People level it's uh completely abstract to them it's nothing to do with that yeah but the other point maybe to to is the full infrastructure and currently defy use the public blockchain space and I think what's the upcoming question is we have all seen in the wave of purely private blockchain that totally fell we can say that there's been a wave of project that has crashed everyone was saying it from the cryptos ecosystem and and I think we were right but there is a new wave that's happening of uh more public-private Partnerships larger scale project that I think I'll um will have a spot and I think it's really uh positive for the crypto custom because most of them are building on the technology that are used also in the crypto ecosystem and getting as close as possible and so maybe the next question to me in terms of technology and and the most pressing to me is what's the different roles of different infrastructures how much do we want to rely purely on this full uh anonymized token incentivized technology and to me it's always something I say often is the cryptocam is always moving from the Bitcoin ideology atos and hasn't found exactly where it wants to stops right because at the end of the end of the spectrum there is just becoming a new techno Financial technology and I think there is still some value that we want to retain some open source you mentioned some leveraging technology to making sure that some properties are guaranteed in while privacy privacy preserving privacy but I think in between there is some some two talks before so there was this notion of like we still need some form of intermediaries how we can make them reliable I think this is where some of the conversation can should move toward if if I could use a letter off of two things that one of which what you've said um so I think if you're referring back to the open source project that failed last year I just want to say that if you're talking about Terra Luna that to me was not a open source project there was a number of kind of C5 elements in there that were very highly controlled by one or several people um and that was on a stable coin yeah that was that was that was a hypothecated highly leveraged derivative that was not a stable coin in my opinion um and then I think when you're you've mentioned svb I think that's a classic example of needing to separate the payments stock from The Lending part of banking right so you know I said at the beginning that we still need Banks to create credit and lend credit and that's what you know an economy depends on but one of the things that happened with svb There Was You Know discussion over the weekend about some of these small startups not being able to make payroll come the following week because their payments money their operational deposits were locked up um and and you know was the money actually there because of this lending activity so you know I think that that is a a classic case of where you can separate out that payments activity and I think that's what stable coins are able to do really well from that other credit creation activity and lending activity now central banks don't lend but to date in most parts of the world they also don't serve retail so if you're going to set up you know a digital version of your of your currency and send that through a series of intermediaries um to me it seems like attack the wholesale interbank settlement issue with the cbdc and let commercial Banks do what they do with greater segregation of payments activity and lending activity I think we're trying to kind of fix the widget when the widget isn't actually the problem actually building on top of that and trying to to shift away from the the Warfare and ideological welfare narrative between cbdc's and stable coins um other talks or schemes that are initiated to make sure that cbdc's once they're not in Pilot Zone but actually fully in effect are interoperable with some stable coins not at the moment um no so uh I think there is consideration for that and you know we were talking about of the 130 plus um discussion papers or or exploratory projects around the world how many of those are actually kind of in a design phase or a research phase the number is around 80 right so of those 80 there is an acknowledgment that there will need to be an interoperability between private money and what that private money looks like could be a variety of things could be stable coins could be tokenized deposits issued by a Commercial Bank don't get me started on those um uh it could still have time it could be cbdc's um with another country right it could be the pound interacting with the digital Euro for example so I think that they're considering these but I haven't seen um anything yet that's highly encouraging around being able to facilitate a global flow of payment but the problem between the connection between the two is not really technological on the technological side I've seen an improvement in the last years where I think the latest experiment a lot of them are using a typical erc20 trying so so technically it will be into a problem now the question is how much they would allow for instance stable condition and political problems I know in Europe and I agree with Julian saying that Europe is probably not doing too bad on this and and basically they have announced that they consider openings central bank reserve to stablecoin issues so I think there is this this sort of of bridges is being considered but often and I don't fully understand there is some sort of allergic reaction on uh if it's a stable car in it it's bad and unstable and even if they could provide the stability by just opening access to for instance cbdc as a reserve that could be also a provable reason which is often a question we have a stability could be something you could have almost on chain and being able to see at the moment there is a yeah a psychological lock on this little Gap actually looking at um who would be benefited the most if we look worldwide and we get a little bit more macro between China and the digital red mini which have actually completely banned crypto usage and don't even want to hear about the term stable coins and Singapore which is actually welcomed sablecoin was quite Open Arms they're not trying to fit it into the regulation um what what would you guys see being um a fitting narrative from a a business region or country that would just take on the lead and say okay we're going to open up the debates and regulations with stablecoin working hand in hand with cbdc's [Music] thank you um well I think the biggest winner of cbdc is if it's well implemented uh uh the central banks in the sense that people don't necessarily understand that normally um Central Bank and governments uh um a kind of like a partner in relationship together and they like each other and the the ones that don't really like each other are the central bank and the commercial Banks because uh well of course Central Bank is the one issuing the money and Central Bank are the one benefiting from some time free money and then Distributing back to the retail people so if the Central Bank are able to directly communicate and distribute that value down the ground to the people then of course Lobby of banking are seeing this as a Potential Threat but I don't think it shouldn't be seen like that but yeah the biggest beneficial winner in in this with step a coin and and cbdc's as Central Bank and governments will be a very nice way and cheaper way for them to distribute money to people and also creating credits and and those type of remittance worldwide and cross-borders and of course I'm not in favor of I think saying that money and different type of currency should be completely open source transparent and and and and and and owned by everyone I think this is nice in a world where you only have one country but hers is composed of multiple different countries that they have their own uh diplomatic uh relationship and and power of governance and we usually say that your biggest friend is usually your biggest competitor and and if you look at uh us and and Europe in Asia you need domestic use of the money because this is how you can control Power and and controlling power is not something bad it's something that you need in order to survive you need the strong power strong currency and and if you look Europe is in competition with us is in competition with Asia and and vice versa so cbdc should be isolated to domestic use usage but leverage outside in something that is easy accessible because at the moment if you applies barrel of oil in U.S dollars then it's bad for Europe and so that's I think but why would you limit you uh cbdc I'm not saying limited domestically nothing limiting I'm saying it should be more accessible for people why because this is how you can control Power yeah okay but think about it this way so one of the reasons that the US dollar is so powerful in the US is so powerful is because this is the global reference currency it's they export their currency so what you're saying is digital Europe if you make it domestic only I don't find a different world of exporting uh I will replace This World by something more aggressive than exporting but uh no I'm not saying you know what the digital Euro to be exported at all no I won't digital Europe to be exported but I also want to be available even if it's more the people in Europe the same that any country will do so so we're going back more on to the um the index on which the um the major issue is going to be on for example if it's the US dollar or if it's the rent mini or if it's the Euro that's going to take on the lead is that why cbdc will become the sovereignty tool that can maintain power in those different countries so of course if Europe issue Euro stable coin you want this this tool to be used as a as a way to regain sovereignty across the globe I mean it's not something stupid so I guess what I'm saying is if you're looking at most of the political concerns around the digital to run are because it's exporting offshoring Chinese monetary policy and with that comes a whole host of concerns around data protection and privacy et cetera et cetera gross market cbdc's right um again the dollarization of the world um is you know we're kind of moving from the globalization period that we experienced over the last kind of 25 years into a more localized political mindset and the dollar being the reference currency of the world something like 79 of global trade is settled in dollars so dollars are what is being used to transact globally so if we're thinking ahead into this web3 environment and the currency of the internet the way to maintain power would be to export a currency your National currency out into the world and make it available to be used at the speed of the internet not can you know control your people with with that I well that's what you said but but for most countries the challenge at the moment is not even to explore their money it's just to make sure that people in their country use their money because yeah but once again and and as the stable coins as there is more and more Easy Flow cross-border as you say like there is this network effect and so on and they are at risk and yes China probably has a play and from the U.

S perspective is seen as a threat because they could become original currency and and so on but but it's also them playing a contour balance because otherwise you don't have any option for for oh I completely agree that the the Europe having a cbdc does benefit Europe no question and somehow in some ways can protect against or prevent continued dollarization right so for sure but let's just keep in mind that Europe has no um National or you know endemically European payment rails today none so Visa a MasterCard everything that we use to move money around is not European in nature not controlled by Europe so I can see why the ECB wants a cbdc it makes perfect sense to me however I think you both touched on two things and that is adoption so if you can't design something that's easy for people to use and they feel comfortable using they'll just keep using Visa they won't use it and so if people don't adopt it then it's dead yeah I fully agree that's the the design is key and I think to go getting back to your question of what countries are doing well to me for instance two examples that strike out the India in Brazil because they have solved the payment systems and they have so picks and UPI so it's too fast payment system with a really clear API design with different stakeholders so even like Google is plugging into it and actually one of the big actors so it's a problem of sovereignty but they have also made it mandatory with some caps for instance in India to allow other payment provider to participate and because they have this payment system in the mobile phone but they allow other they allow private sector to plug into your PMI so I think that's the key yeah it's a very private oriented approach I think they've designed well and and often CBT I maybe it's what you're applying are trying the government or the central bank trying to do everything all the payment well and maybe it's difficult to see them achieve better in the end than than the competition of and especially a public private partnership where the government guarantees the main function ensure the standardization and then the private actor completes but uh just to finish on those two example what I think is interesting is because they have solved the payment problem then their cbdc are way more uh Advanced and especially in in Brazil they are designing basically a D5 blockchain so I've seen some black backlash on Twitter I didn't understood because what they are trying to do is just make a blockchain with different actors that will be able to do all sorts of defy like operation and the central bank would just provide the money in destruction it's still an experiment we don't know where it's going to go and the opening for different actors but they can do more advanced stuff because they have solved the payment problem so they are not encumbered with having to solve different issues at the same time I think you have multiple different countries that have successfully implemented a different version of Visa Mastercard which is the switch Network like for example in uh in Portugal you have system called multibanko and a country uh pretty big China the user WeChat and a few different things like that so my point is saying that US dollar is used across the globe as Maine currency is because people love U.S dollars it's not what I said okay let me finish so first one okay this is not what you said okay at all good yes because trust me and if you tell that to European commission or something it's just like well guess what those people in the rest of the world I've lived here for 20 years I'm just telling you how it is US Dollars that's a reality it is not because they love it it's because they are forced to do to downsify maybe a little bit and taking a page out of the actual economic standpoint um on the 15th of August uh the brics uh new digital currency also and they're launching a currency index on gold it's going to be launched on the 15. we still don't know what it's going to be looking like or whatever form is going to take but it's going to be a especially like I think uh what they have in China is interesting not on the Privacy level but on the way that they have built their own system same with Brazil same with Portugal and I think with um the cbdc what will happen is a complete isolated not isolating the sense of not being able to distribute and people to have access to but to for example European its own network interact uh transparently or easily with other networks such as maybe Swift American network uh or other than it that's why I think will happen in order to maintain uh go uh Power and this is not missing we need power it's because this is how civilization survive and Swift is based on Switzerland it's not American Swift no I mean like people behind the network [Laughter] who who's governing and who has a time old problem that we're maybe not going to be able to resolve right here right now but um if we go back to cbdc's across borders and stable coins and so so far we're looking at um success stories on digital payment implementation um then if the ux works we can get into Mass market adoption and that's when we would need to be able to connect cbdts and stablecoin together to really make the liquidities flow so in since I'm seeing the time to turn out if ever we could get some lovely insights from from you three on um what a hopeful future we could have tomorrow if ever we could really Implement um stable fluid liquidity with stablecoin across worldwide usage well I think for a start one of the things that we could do today that would provide a level of trust and transparency that would encourage greater adoption and I don't mean necessarily maybe at the retail level but more at a wholesale level where it could be exponentially more beneficial would be to enable stablecoin issuers to be one potentially regulated and to hold their Reserves at their National Central Bank so if I'm going to issue a digital Bureau then I would have my Reserves at a European Central Bank Central Bank of France for example in the UK the payment institutions are allowed to have Accounts at Central Bank so that's the potential given that the UK has just passed legislation that will bring stable coins into the regulated perimeter probably at about the same time that Mika comes into Force next year in July regulating stable coins in Europe as well so you know I think those are timed interestingly but in that case then you would have uh potentially as a as a policy maker a greater comfort that the reserves are being held in assets and um in a way that you feel is confident and then if you're plugging into you know the the existing Financial ecosystem or payment rails you wouldn't necessarily have a need for a cbdc issued by the government because you would have open source um interoperable internet ready digitally native pounds or Euros ready to plug into the system today or dies yeah dies might be a little different because there's a basket but no debate on this that would be lovely if if we central bank reserve could be open to more actors I know that one limitation is basically doing fast success they have so it's comfortable for them to say okay we only allow the major Banks to access because then you have fewer clients you have fewer mess to to so there is a question of scaling the infrastructures being able to onboard more people and and that's why also they are looking at CBC sometimes just as a opportunity to refresh some of the infrastructure and try to have something more robust and more easily opened because currently the most the main strategy for Securities to have um barriers but I think the you highlighting the main challenge is if I'm European Central Bank what I want is every Euro to be one Euro and everything that's not one Euro to be clear that it's not one Euro and that's currently the debate about stablecon is it really one Euro and as sure as any other euro is secreting in the economy or not and I think that the component you are saying uh the right one is a question of what's the baking what's the regulation of every institution that's allowed to issue what we would consider a Euro but maybe there is also a question on in which infrastructure it circulates because then what happens with it and so on and and let me just give you an example of where that's not currently going to work so within the Mika Provisions you need to hold the 30 of your reserves in a credit institution and as we just saw with svb credit institutions don't always do a great job of doing what they're supposed to do so in the event of a challenge at a credit institution like Credit Suisse and there's a collapse and a stable coin issuer has 30 percent of their reserves on deposit there what happens then very different situation if I have it on deposit at the ECB or Bank of France um if I can answer your question before we finish the panel I think there's a uh and I understand the The Regulators and the governments uh moving slowly in the in this uh in this topic because if you look especially in in Europe it's kind of seen be uh as seen as a straight because um look uh today look at this video the potentially everyone's laptop or using what we call in Europe gaffa uh Google Amazon Facebook and also potentially uh Twitter and what's left for those governments such as in Europe is money so I think there's a right for them to still be able to uh use money in such a way to maintain their sovereignty and so welcoming any Partners or any wants to play on the European level it has to be seen as a really difficult game of course we want to open we want to be broader less we want to make more people access those different value but at the same time we also need to make sure we don't get the value suck outside of our own uh for example Europe here into another reduction or another country because this is exactly what's happening today and we have over the past 30 years 40 years now we are using tools that are not being built here or used by the people or actually built and then the value correctly stay in Europe so yeah it's a risk and we have to build in a Columns of what we want to see in a near short and short medium of a long-term future of Europe if we're talking for Europe the same for Asia and Central yes and just one ID to to make sure that they move a bit faster the best idea would be to have more Central Banker come to the next edition of the subur to engage with this community yeah please welcome to cyber coming next year please come and debate well guys thank you so much and um lots of fruitful thoughts give a big round of applause everybody panel guys and I think we're gonna do some questions oh yeah get back here please okay great job guys some quotable moments today not everybody left the dollar though I don't know I my question is around the weaponization of the dollar so when you look at the treasury Department it's gone from basically regulatory to now an enforcement agency so you have Jeff that runs ofac and then you have Jeffrey sonfeld out of Yale and his organization that provides all the information to the people to ofac on who to stop around the world and there's no court it's just Arbiter if he likes you or not do you see cbc's going in direction of more weaponization more enforcement to countries and to individuals um no I don't think so I think why the the intention of cbdc to do looking future forward is to um you know as Julian said one of the things that countries are trying to ensure that they're controlling their own monetary policy right and that they're able to use those levers in times of conflict and War and inflation Etc and the the the the dollar as a weapon I think um sanctions for example um is one of those things where because the dollar is so prolific in the value trade of global trade right it has become the reference or reference currency of the world I think that if more countries in the Euros the second largest you know currency in the world um were better able to export the Euro for use in those types of activities then that would start to balance out that power what you're seeing in the U.S um and again I'm not supporting this I'm just telling you the way that it is um is this attempt to hang on to that power that the US believes that it has and it has very little to do with Europe and has a lot to do with China um so and and to some extent Russia and the relationship that China and Russia have so I think that um in my opinion if we had a another way of solving some of that Global flow and not just at a retail level but at that kind of cross-border institutional settlement level um then the power would be shared more equitably um than Perhaps it is today and another we are puncturing it is you're saying it to be arbitrated with chosen but I think it's what's even worse is because of the implementation is not certain a lot of countries banks are scared of of sanctions and not applying well the sanctioned and so you have all these even country entire countries that are on the gray list and Banks cannot have a relationship with other monks just because they might be suspicious somehow so maybe the question is how much is it a question of should we avoid to have any of this power regarding to money or if it exists should it be more transparent at the when we decide we should have a sanctions so maybe there should be a better governance around taking these decisions but then if the implementation is a bit leaner I think in the end it would reduce some some cost because anyway people that that are the most hurt are people that are not retargeted but everyone that's a bit around and caught in these two wide net and I think that's the main problem we have today I think we got time for two more and there's a lot of hands so I'm sorry if it doesn't get to you thank you for the presentation very interesting in the panel um I have a point to like ask because I see that the conversation around the topic of cbdc's many times goes around the focus of privacy like they don't respect privacy how do we do that they respect privacy and I very much resonate with what Julian said technically that can be so like putting a layer of cryptography CK proofs on top and that's okay but my my main concern is not just around privacy I think that the major threat is on programmability if you have money issued by a central institution it's a direct reliability of them and you put on top of that layer of programmability you can program what you can do with that token with other assets you can program it I mean you can put contingent rules on what that money can be consumed or not and I mean Etc anything that we know in smart contracts can be designed so if they control the payment system basically if you go to the bis website you want to see that they're launching a payment API and they enforce that and the attract metadata and that metadata is what they use for enforcing those smart contracts and basically your freedom is out so my my main concern is is that like the same when you program what you can consume you can program in a token where the token not to go basically you cannot go to this exchange you cannot go to these off-ramps Etc and as you may have written all these reports they're using utxos not account based systems basically the program analytics go straight to the token so which are your opinions around this topic I mean it's okay that we all think that cbdc's are cool and they are the liability of the Central Bank and I don't think maybe um but maybe we have to I mean that's one question is uh there's many more questions so I have another point that I want to help with is there a question you know that which are the two that's the question which are your views around okay so thanks we got it thank you well I I will make it quick I think the implementation of those rules at the protocol level is very very bad and shouldn't never should never never happen because for example um we have on the daily usage daily life we use knife there's no one there's not a cop next to us to make sure the knife we use is uh to cut a piece of meat my point is we on the protocol level need to have a technology that is sufficiently safe but without any Gates and is not the one saying okay this token cannot be sent to this specific location but it's the job of the Regulators the legal task enforcement firms to Monitor and to make sure that those people that are interacting and doing those things are caught because this is how you can protect freedom and you don't build Freedom by putting people in in cage this is not possible I agree I think that you're right to have those concerns that's probably actually my top concern the programmability aspect if we're going to replace cash or supplement cash with a digital version then it should operate like cash and if you ask any Central Banker today about you know creating banknotes and giving them to people and let them make Anonymous payments anywhere in the world they would not let us do that so there wouldn't be cash today I think that um one of the things that we could do and I know I'm going to sound a little bit like a Pollyanna but the cbdc a consultation that was just issued by the bank of England had something like 50 000 responses to it and a lot of those came from Individual people not policy people like me that basically raised questions about those very same things so I think if we're going to replace cash and you know the central bank is submit to serve the people to provide us with currency to be able to transact then we should demand from them exactly what we will accept and what we won't yeah because the most important is the possibility is there there is no way of creating a new system and not having the capability of do some probability another question is it's a governance question what we agree on on constraints that happen before you make the payment and how much should be controlled after also what's new is with new system we can have better data monitorbiter which is a privacy problem but also could be a good way to say we let more things to happen and we have likely to happen in the blockchain because then and we have enough data to know after and make an inquiry so but it's going to be a really tough Governor's Challenge and you're right of mentioning consultation paper because uh I think central banks are asking for feedback and it's the right moment to to show and and express this content and also it will be political at some point at some point there will be a election that will be run with partly this kind of issues and I think that's the kind of thing where uh you cannot be only a technology stand at some point go to the governance part you know on a research standpoint you've got the bisih so uh the bis International Innovation Hub where they're doing lots of uh inside pilots on cbdcs and if everyone to look and delve a little bit more into the details of that I would definitely cancel looking that up do we have one last question do we have time for one last no oh okay so one big thing last question we have to go to lunch because everybody's hungry but thanks folks for a great panel and let's give them one more round of applause it is lunchtime now but we'll be back here at 1 30 p.m with a panel about adoption you need to take a picture with you