Private Sector and its Opportunity to Shape CBDC

[Music] are you ready guys we are now live with our next panel private sector and its opportunity to shape central banking currencies we have a a panel of four very very important experts in the field i'm very honored to have you all on board and also it's a very special day we're just discussing it they are very excited both about a consensus a new founding run of 65 million congrats monica and also because of coinbase ipo today and well everything else going on so julio i'm gonna give you the word please go ahead and welcome to the full view thank you uh pleasure to be here um welcome everyone um as victorious and everybody is really excited we were just having the previous discussion and stable coins and the relationship to cbdc so we'll we'll try to carve this guys i mean everybody has very exciting opinions that uh we're going to be talking about in uh in a minute um the panel is um about a slightly less uh interesting topic than the ipo for coinbase which is um you know how the the private sector can actually play uh a part right in the introduction of cbdc's i will talk about tokenized money um a little bit more in general um as well here right um let's start by um introducing um the the speakers uh just a few words about myself i'll start first my my name is pulifara i am the ceo and founder of adara technology company that provides cbdc technology to central banks and banking consumption consortiums most notably to finality uh which you are the blockchain partner for that before that i spent a good 11 years as something there working on you know capital markets and um and technology and innovation and blockchain i also uh headed the i chaired the enterprise theorem alliance that you some of you may know um and i'm a full-time entrepreneur and practitioner of all these things um monica you want to go first yes thank you welcome i'm so excited to be here to share the panel with all of you and my name is monica sina i'm based in capeton can you see the beautiful picture for all of you to admire and and i work for consensus for the last nearly four years i i love working for consensus we are inventing the world and we are creating all the blockchain technologies that everybody thought it could not be done and now to see all the things that are happening so fast it's like the tipping point it's like i told you so so it's a beautiful time to be alive and before i joined consensus i i created the simple securities depository in south africa i had to convert the physical paper share certificates checked into digital created the central securities depository run it as the ceo for 20 years and then i read satoshi's paper and i thought oops i think i better do something else because i thought she said everything we've done is wrong centralized you need to decentralize so that become four years ago my journey to start decentralizing the financial markets and i'm loving every second so thank you for having me here and i look forward to the panel thanks monica i know monica from many years ago an old relationship with consensus great to have you here uh philip do you want to go next yes thank you very much it's a pleasure to be here i started myself a mixture between business and computer science a couple of years ago then i did my phd in munich and then i also founded a couple of companies and afterwards joined the frankfurt school as a professor where i now founded the blockchain center four years ago and we are trying to push blockchain from a community perspective we are working on topics in the area of digital euro crypto assets tokenization and we are not just reporting what other people are doing we are also deeply involved in a couple of uh projects which works at this point of time quite well and i'm very happy to talk about this topic today with regard to the digital euro and potentially also crypto assets as a carrier platform so to say and therefore it's a pleasure uh to be here and i i'm very very optimistic for us here in this ecosystem we see bitcoin on the rise cryptos on the rise coinbase consensus uh nearly day by day we have a couple of absolutely fascinating news coming up so it's it's a good time and good space to be here wonderful uh great too to you know to to be together again philip and then um dean dean do you want to go last please uh yes uh thanks julio first of all thank you for inviting me this great funnel discussion thank you victoria as well i think what we are now seeing uh we think a great event uh development and i'm really happy to be part of it so my name is as you said dean de melvik i am a digital transformation leader and a blockchain evangelist in vp paribas i am responsible for research on a blockchain digital assets as well as identifying the new opportunities and market trends so i don't want to to bother you it's a lot of my background i would say uh highlights but uh just to say that i actually joined this uh of a transformative space in 2013 and i'm really actually uh enjoying uh being in this space and i would like to congratulate uh consensus on on this today's uh yesterday's actual announcement uh thank you thank you guys i think you're working uh on something which will actually benefit the whole exercise that's great thank you dean uh we look forward for more announcements from the private world and that would be okay so let's um let's start um talking about then cbc's which is the the topic of the of the panel right uh i was thinking let's let's first talk about retail cbdc's right um i would say that um you know so wholesale cbdc is a little bit different right so those are more like um detail versus rtgs system i say this from my heart because we work a lot with finality as i explained before in in in atari so let's talk a little bit more about retail cbdc's uh i mean by that's those diesel currencies that are directly issued by central banks and are made available to individuals and and corporates right i mean they could be directly issued by central banks or they could be issued under tokenized form but then backed by central bank uh money if that makes uh uh sense right so my question is what what is the interest of the private sector on these right and how how do you think the private sector is planning to to use it right to leverage the the yeah the the regional cbdc construct we've been talking about things like leveraging for example their programmable nature right in order to foster innovation and and create new applications and use cases um monika was talking about the the benefit that this could have for financial inclusion right in emerging economies as well um and also and based on the news probably it's also quite interesting to think about the ability of regional cbdc's to become as a means for settlement for crypto and other digital assets as well right this could be also a fuel for um i mean for for developing this market so um let's let's talk for example first about the the ability of um you know the programmable nature to and the ability to actually foster innovation in the space who wants to start maybe maybe dean or or feel better okay i'm happy to kick off uh i would like to start with actually how i see the cbdc so for me the cbdc is a catalyst for the digitalization of the financial services and market infrastructure so and also it stimulates creation of new products new services and business models so by saying that actually i'm trying to picture the what are the benefits for for for banks that includes that as we know so all banks are going through this transformation and i think this cbdc address all these three uh accesses of this one transformation for the banking industry uh number one actually the one axis along the the cbdc can contribute is a bottom line so that means issue that will improve efficiencies and will actually help them to digitalize back offices to the the other axis is a user experience so that what i mean by that actually that so now we will i would say see uh friction frictionless uh transactions you know so the payment system will be it will be significantly improved by actually being more transparent 24 7 available and so on and the third one that you mentioned like the the device the innovation is actually i think this is about creation of these new business models so this is so cbdc actually can actually by nature because i hope that this cbdc will be introduced as programmable money and can be wrapped up in in in a private sector i would say token tokens to actually innovate those business models so how i see personally i see that they actually adapt that means actually the banks needs to adapt to their existing business model uh after that she invests i think the banks will need to invest in in in infrastructure to connect with the the cbd c infrastructure and the third one is actually create i think for the creation of these new services so if you wish i can give you a couple of a couple of examples let's say the banks can create sort rate finance let's say banks can create invoices that self-execute on the fees of goods and services they can turn invoices into um tradable assets or they can raise they can enable actually i would say startups to raise the capital uh by issuing those programmable money uh rather than issuing backwards that's that's great um philip you and i have been discussing in the past about potential uses of tokenized money and by extension cbdc's right from the from the private sector maybe a little bit farther away from the banking world would you would you like to share your thoughts yes thank you very much so first of all let's let's quickly very quickly define what we are talking about basically we talk about the question whether and how we should get the euro or other currencies could be the remember in china or the us dollar how to get them on chain right on a blockchain system and why do we want to do this there are multiple reasons out there for example you can move assets around the world um at low cost and also at a very high efficiency i think me sitting here in cologne transferring money to the end of the world in say south korea japan somewhere else and the money arrives there within a couple of seconds you know that's the goal and this is something the current system cannot achieve you know that's effect and then second in case we are talking about the euro we should never ever have the euro in mind as an own asset but we should always have in mind that you can do something with the euro you purchase a security you sell up security you purchase and consumer service or you offer a service something so euro is always being paid for something or received for something right and in the securities area when trading stocks you can see this very nicely i give away a stock from tesla and i get back i don't know 200 euro right and right now you have these assets running on multiple systems you have the security systems where the securities are being stored and you have to uh the banking systems where the euro is being stored and therefore you need to have clearinghouses to reconcile these two systems very efficiently and that's exactly where the problem comes in you have to deal with risks you have to deal with uh timing issues and so on such that the existence of clearing houses um is is basically happened over past you know we needed them of course but with blockchain technology we do not need to have clearinghouses anymore because this handling can be done very efficiently by the technology because the function of the clearinghouse can be executed by a smart contract and this is the key point out there where also in my personal opinion central banks are approaching the the limits of their understanding so to say because they are focused on maintaining the euro payment system they do not really care about what is being done with the euro whether there is being purchased or sold securities or services or products being consumed or whatever so our central bank concerns the efficiency of the euro system and doesn't really care about what people do with the euro but to really understand cbdc in the blockchain context you have to have in mind what you are actually doing with the euro purchasing security selling them com consuming services and so on and if you are having this mind frame then you ultimately um result in the conclusion that blockchain technology does make sense because it's the ultimate technology to run clearinghouses in the form of smart contracts on blockchain systems right sweden started with cbtc's now they are doing r3 uh quarter dlt based prototypes china started with digital currencies now they end up with some kind of dlt the same is true in switzerland they uh the swiss central bank says that you do not necessarily need to have a dlt but it does make sense in in case you are having other assets in mind and therefore i think um we need to really push this topic on behalf of europe also to maintain our sovereignty over here and therefore i think we need to help or push the european central bank and central banks in plural to really speed up and really understand what's going on here because it's it's it's it's it's not random that china switzerland and sweden all ended up with live live prototypes or large scale prototypes with dlt based topics and therefore i'm i'm surprised every other day that the ecb is still very often not really understanding at this point in absolute clarity okay so so both if you naturally started to to talk about the implications for the financial industry you talked about clearing and settlement of securities and trade finance and things like that um one of the other topics that came up in our previous discussions was the the possibility to use this as a as an enabler right for for new initiatives in financial inclusion and also on the you know as a bridge let's say or kind of a way to institutionalize the crypto world as well um monica what are your thoughts about that i know you've been quite hopeful thank you first of all i do agree with everybody what everybody has said i remember i came from that market i was running central uh securities depository and and i can assure you that the system is broken why because we allow so many intermediaries we allow no many accounts we we cannot move from a three-day a period of waiting for settlement and and we couldn't even link one cst to another so so trust me the system doesn't work anymore and that's why i predicted when i left being the ceo of strength that what would have actually happened is that companies will not list in traditional stock exchanges unless stock exchanges evolve but coming back to your question julio julio very important that people must never forget the most significant thing that the cbdc retail is going to do to the world is that for the first time we're going to be able to offer a liability on the central bank that is not cash so that's why if you have a look at the reason why sweden is doing this is because people in sweden stop using cash and now the only thing that is being used is commercial bank money which we know has a higher risk than central bank money so once you offer central bank money especially in emerging markets a whole cascade of consequences starts to happen i don't know if you if you are aware that in in emerging markets there is not deposit insurance if the regulators don't regulate the banks properly the bank goes under the deposit gets lost i don't know if you're aware that in countries from africa we hardly have banks and therefore what happened in africa and east africa especially the telcos the telecommunications company invented a system called pesa which works into an ecosystem run by the telcos which is not ideal think about it when you have the liability on the telcos which is a foreign company and it's still a corporate so ideally this is the chance of a lifetime for central banks to ensure that they can still have an influence on not only a monetary policy but also to offer to all the people that have been left out of the economy because they couldn't be they couldn't access bank accounts many people don't even have a proof of address or an id to prove to you know you need to do kyc and the whole idea should be that any any opening of cbdc accounts below a certain amount should not require a kyc you should make it so practical that anybody within with that with a phone should be able to open an account and be able to enjoy the benefits of this technology that will give you access to the world so you could have your own little shop in the corner of the street in in in the payment and be able to run um a technology um e-commerce basis once you get given a wallet and you can now use uh it is cryptocurrency backed by the central bank they are on liability and we can make it so simple that even someone that doesn't know how to read or write and hasn't even got internet or data can access to this programmable money and remember we never must forget that the beauty is not only the decent translation but all the benefits that the blockchain technology brings from immutable and you know it's difficult to commit fraud a single version of the truth blah blah blah and programmability and we can also ensure that we can give privacy because that's the other thing that people race and oh my god you're going to know everything i'm doing now you can actually program privacy into in into the functionality of the cbdc but i just have to say to the central banks if you do nothing you're going to pay the price because the the cryptocurrencies are becoming not just a store of value but a medium of exchange and other companies fintechs credit card companies like visa mastercard they're going to paypal they're going to make it so easy what about facebook 2.3 billion users they're going to make it so easy issuing the stable coins or access to cryptocurrencies that people are going to start saying why am i using fiat why am i using a bank and that i believe is the responsibility of the central bank to bring stability to people and to make sure they are protected in many ways and this is a chance of a lifetime and it's not about saying oh it's not gonna happen because this technology has a tipping point and today for me it's a tipping point coinbase conveys market cap higher than the new york stock exchange who would have thought it is so penny or the market cap higher than goldman sachs really we've been predicting this for years and if you sleep on it then it's gonna pass you back so this is my advice to central banks there's no time to waste thank you okay now um so specifically i mean it's difficult to keep the focus on just talking about retail series is now that we're opening so many um uh topics but what what is the i mean why wh why should the central bank be the issue i mean what is the advantage or the benefit right of having a central bank being the issue versus um you know trying to use tokenized cash for example isn't that a way for the the private sector to actually get involved rather than trying to use or leverage the the innovation capabilities of which sensibilities actually become the issuers right so so what are the the you know the the differences and the the the risks or the benefits in in different um approaches can i can i give it a first trial yes so i think you know i think there are different monies out there to really use the plural form of monies and this is already happening now you know in case i'm trying to purchase something for my daily life you know say a pizza something like this and then i can use cash that's basically paper in my wallet i can use credit card paypal i can use the plastic form of the credit card or my smartphone i can use paypal i can use android pay i could use ibn in germany we have the ec card uh and and so on so we already have right now all kinds of types of euro and they all work even though and probably because they have been issued by a commercial bank because commercial banks they are also offering very convenient apps and services such that i actually can use you know it's apple pay offering to me the apple pay service which really works brilliant and its credit cards which are also delivering a very very good service i cannot expect i think the ecb for offering a similarly similarly nicely programmed app like apple or um like revolut and n26 you know that's not possible so we need to have private banks in this sector because they deliver usability apps such that i as a human being can actually use it and despite multiple euros being there it's always the euro it's always the euro from the ecb it's interoperable and all these monies have bridges for moving money from a credit card to a bank account and back again and so on and therefore to be honest julio i think we will have all kinds of blockchain euros in the future there will be blockchain heroes coming from banks there will be potentially a blockchain europe coming from paypal from libra from dm and there will be one blockchain euro coming or one digital euro coming from the from the central bank but most important i think the ecb has a good chance and the central banks have a good chance to to really deliver a good solution but the way they are operating right now is way too slow and therefore i think we can expect the ecb to launch a digital euro by 2028 or 2020 20 20 26 or 2028 probably so that's six to eight years from now not earlier the question is what what do we do until then in the next five years we can use stable coins they have exactly the same function or we are relying on banks who are issuing the euro as banks to their clients to their companies to their users and so on and therefore i think coming from a usability perspective there will be multiple euros out there from multiple issuers and then we will see which issuer is basically delivering the best solution such that i as a consumer actually can use the euro exactly the same as it's working right now with the multiple forms of the euro which i also have on my um in my wallet or on my smartphone it's exactly the rain at the same stuff but basically in a digitally transformed way okay um if you have other reactions or what to chipping in the discussion just just do right i mean okay i will join you okay monica uh please i just wanted to make a comment on from the questions you know and people can we think about those that we left behind that whatever 1.7 billion people and that we left behind and you know when i made the comment about a certain levels you don't need a kyc aml you know if you've got a beggar in the street okay that nobody now wants to give them money because nobody wants to touch money nobody wants to touch the vega the person is dying so simply you give them a little card a qr code and that account that he opened or she open can be of a label of let's say a hundred dollars a account that he can have cbdc retail up to a hundred dollars he doesn't have to prove proof of address because he sleep in the street and he doesn't need to have um you know um and i did because normally in africa they don't have ideas so if people this is the chance for central banks to to repair what we did wrong and you know what if they don't i'm sure you heard facebook say we are here to save the world from all the unbanked human beings so is that what you want so if the central bank in europe is going to wait wait for 2028 by then there won't be a central bank because who's going to use the euro in his current form there's gonna be so many choices and i can assure you even our grandchildren are going to say what was that a branch what is the branch you know they're not even understanding they won't understand that the meaning of a bank branch in their language they're going to say what working hours what 50 holidays when borders nothing do you understand that the world that we are building today is not for the baby boomers i think that we'll never get it so the problem is that maybe central banks are full of baby boomers that are refusing to give up whatever they build and you know whatever makes you successful in the past will make you successful in the future so maybe rather allow the millennials to come and build a new world because i think that our age group is not understanding this i'm not being nasty i'm just being honest because i am frustrated like you i feel like from talking to so many people for many years knowing this is coming and seeing that nothing's happening okay i i think i mean we i don't think i fundamentally disagree are we from the mclean so yeah i think it makes sense to kind of separate a little bit the debate between financial inclusion situations or emerging economies versus versus western economies right because in the in the in the case of emerging economies i i i i agree 100 with you that the banking system the judicial system has failed right and and it's it's very clear i mean we've not been able to solve that right that is true so that's a problem of trust right essentially except but in in europe we we cannot say we don't have a good banking system i mean people have not been left behind and payments works i mean i can i can do immediate transfers in in sepa now today if i want and and this works it could be a little bit more efficient yes it could be more innovative and and yes there there is a possibility for for programmable money and recent cbdc is to provide ways to do innovation right and that's that's the path we want to to go but both situations i think are are very different right and not disagreeing just just ordering a little bit if possible uh julio if i may add here if i i think we all agree around the table that here we see cbdc the new payment infrastructure rather than just a new payment of settlement instruments uh within the existing um uh settlement framework and i think so when we're talking about this i think this is the very it's very clear that you know the technology the situation technology blockchain actually is the kind of infrastructure that enables actually distributed infrastructure for the future so we have we need to look at these cbdc's as well in the light of the latest development regarding the native digital assets can cbdc be a kind of bridge between centralized uh finance and distributed finance you know i think that the central banks are not talking about this so i think what what i really actually just they're talking about the two two options one option is like uh like just uh uh narrow cbd fee just as a as a means of of a as a payment instrument for settlement and the other option actually i think uh what we mentioned earlier actually our friends actually in sweden are working on naturalistic kind of new uh payment infrastructure which will enable actually those smart contracts uh programmability and so on and i think looking this is what i actually said in the future we need to look at this as a potential actually opportunity to to really uh create a new infrastructure uh which has been created the market infrastructure i mean which has been created 50 years ago yeah okay yeah i totally agree with it can i also add that let's be honest this is a massive opportunity for the banks not to feel that they're being left out because you know that the motto that we believe at consensus is the two-tier approach that the cbdc gets issued by the central bank liability of the central bank balance sheet but it uses the current pavement infrastructures the banks the payment service providers the fintechs the telcos because they already have that relationship with the clients once you establish that relationship remember you can then offer them many other services so this must be seen as an incredible opportunity and then the last thing i really want to emphasize is that i'm very worried that we are building the v5 world this centralized finance world and that unless we start educating the money in the street and making it very simple for them to be part of this that once again we're going to create a divide between the have and the have nots the one that get the technology and the ones that don't get the technology and it shouldn't be done like that because think about it look at it as the evolution of the internet when the internet started which i still remember i'm also on google so well when internet started we always scared we didn't want to send an email we sent an email we phoned the person did you get it but you know what today even your grandmother can use the internet so that's what we have to achieve we have to enable that every single human being in the world is able to use this currency why because it will then open up so many products and services especially in the d5 world okay let's um let's talk about that precisely right on on on one hand um i don't think we can claim that the crypto world has really done a good job in distributing wealth right as in a lot of bitcoins are concentrated in a few wallets right and then the same habit with other crypto things so the hub and have not i think is is it's been it's been i'm trying to be a little bit contentious right monica just to create a little bit of of um of debate right the the debate around uh d5 i think is uh goes more on the whether this should be regulated or not or what is the you know what what is the relationship let's say with the with the um regulation world and actually we're getting questions in the chat about the or comments in the chat about the importance of you know the what is going to be the balance of power let's say um when it comes to cbdc is controlled by central banks and also the implications for kyc and aml i mean all the prudential regulation that is needed when when dealing with um with uh with these things right so um and and setting aside a little bit the the let's say the situation in in emerging economies which as we said you know is very much around the lack of trust in the institutions and the possibility of using new things because essentially have nothing as you very rarely said monica going back to the to the to the other let's say the more uh developed economies if you want right in the retail cbdc world like like europe like the detail euro that you know philip you were talking about or um the cronus or things like that um do you see so so the question is um is this an opportunity for banks or is it a a threat right in the sense that um is is this a way to open the innovation i mean the ability to do innovation to the private sector to technology companies or all this is that is that a risk is that good is that bad um and and how how this should play out let's say with the with the financial world which is very narrowly focused and yes the the idea of fragmenting money in in different institutions with very low touch apis i mean it's very difficult to innovate in the in the financial world that is true right so is this um is this a loophole i mean is this a you know a way for the for the you know the non-regulated world to step in into this and is that the reason is that a benefit or is that a risk well what do you guys think do you want me to stop well a huge opportunity uh for the for for the banking sector for financial actuary uh uh services uh the one thing that's actually as you mentioned rightly it's all about innovation so this is what we would like actually now to so i'm talking from my personal uh points of view standpoint that's actually i would like uh to see more search for innovation innovative products that this infrastructure enables so what i would like to see actually the cb that the central banks sit together and create kind of define the scope of this uh cbdc platform let's say and allow private sectors uh banks telcos uh tech companies to actually uh to to actually think how this is going to to to actually work in in second i would say in their terms so how they will actually uh help their clients so i think that the the most important thing for for banks are their clients actually their advisory so so they need to have to help their clients with their business challenges and i see this as a huge opportunity so i don't want to go into details but i i can say that that that is this actually a cbdc platform as a innovative platform as you said as an infrastructure will be will help uh banks and financial services to develop the new products that we haven't seen so far because it says i would like to link this with digital uh securities as well that we are at the moment actually developing you know so you you saw that in capital markets now you just look at the private markets you know those digital equities and i think that it's really really exciting space and i i'll really see this as a huge opportunity yeah i could add a little bit of things you know i think i would not say that there are banks and there are no banks out there but i would always focus on the chances for those banks who are speedy agile and who are really pushing things uh that's where the chances are and the risks are exactly there where banks are could also be legacy corporations who are slow who are non-we're not very techy could be partly german automotive manufacturers in the past right who are just wait and see and then tesla comes and overtakes them and so on so the chances are with those who are taking digitization serious and risks are those who are sticking with legacy technologies and then there are where exactly are the chances in my mind there are there are primarily four areas um or five areas where a digital euro and a cbdc could make sense one is the digital transformation of the industry that's business models where everybody would like to have smart contracts you know like logistics supply chain management production manufacturing all this stuff we noticed from all the powerpoint slides four years ago then we have the entire capital market sector that's was what dean referred to that securities trading without clearing houses then we have what monica says that's a cross-border transactions with the potential to financially include 1.7 billion people and number four would be the machine economy which still yet needs to start um that's basically when machines and devices are being connected to the payment and then starting to transact as things and finally we have the crypto market don't forget this because that's right now by far the largest market where digital not euro but digital us dollar is being transacted 100 billion day by day in my mind that's the five domains and in my mind there is really room for banks and for other companies as well to basically get into these five domains and build services and products for companies there and just by naming these five domains i think you know it goes through the entire economy you know it's industrial production capital markets cross-border machine economy crypto markets it's it's close to everywhere but of course you have to identify in which specific field you are launching a product and i think the most fascinating development with regards to cbdc is the us dollar referenced stable coins which are really really um innovative and which is not just an idea as with dm but which is really live and being moved around the world day by day and if i just may if i may add just one thing i think absolutely i really follow or what you said i think this will stimulate competition which uh i i really like to see that that some uh actually all the i'll say industry uh players actually uh change their their mindset in instead of a search of efficiency to to go and search for competitive advantage and i think this is where the innovation actually will uh actually flourish and also philip i want to add for example in anything in the d5 world you are now dealing with um a smart contract that enables you to get out alone that it does automatic making of transactions that it creates insurance products and that requires this type of digital money to be paid and you shouldn't have to rely always on crypto like at the moment so all stable coins why not be able to have a wallet that the central bank gave you that it taught you how to use it and then you can go and buy services in the internet no matter what noble gardens no matter where you live in the middle of sahara desert doesn't matter and you'll be able to get alone without all this red tape and and you know how sometimes it's complicated to get alone so so and that i think is it's a key component and for me that the default world because i am seeing you know a consensus is you know building the this decentralized finance world and what i'm seeing is an implosion of new products and services that um that i'm just worried once again that we are creating this divide of the ones that get it and the ones that don't get it and that would be so sad if we don't bring everybody with us but monica if i may ask one question you know blockchain is a very very inclusive technology right it's all open source you just need to go on the on the internet uh do a little bit of research and of course invest a lot of time but it's an inclusive technology it's not that that like heavy software license contracts are restricting my access to this technology so at some point of time we also have to rely on everybody else to take up this chance get into this technology do a little bit of homework and basically join this ecosystem you know you can't push people in this ecosystem it's more open than anything else i've seen so far yes however i'm a professor at university and i can tell you that this technology requires education you know if you don't educate people on the basics and you don't overwhelm them with a techie talk just with how to use it people are very scared and remember the user experience is still not happy you know just try to to going to um take your crypto into cold storage you have a heart attack that you can make a mistake or you lose your private keys who are you gonna found so there are still a lot of problems in terms of bringing this down to the level of the masses and that's where i'm saying not only is the responsibility of the central bank that for me is a massive opportunity for the banks because everybody wants to still be looked after so the center the banks can for example say come to me i'll look after you i'll do custody i'll look after your keys i'll teach you how to do it i'll show you all the products it requires education and holding hands and not everybody's prepared to do this okay um going back to um to one of the feasibility questions about uh all this and then people in in the chat are asking about um well the again the role that the central banks uh should take right in order to to create this uh the cbc's rita cbdc is because you know somehow it does feel like um there is place to do some more regulation right and one of the basic you know one of the basic implications of that is the need to link retail cbd well the need or the or not you will tell me uh you know to to link uh written cbdc's to detail identity right so some money is something we we have today that is anonymous right but only two or three percent of the the money in the world is really anonymous as cash right because the rest is in bank accounts and it's printed by banks and you know collectively as an industry as a society we spend a lot of money and effort in trying to make sure that the system can not be inclusive for the criminals right the expense of that is that it's not inclusive as well for less fortunate people which is the which is the definitely the drawback right so isn't that um you know a big difference right between written cbvcs that somehow will be connected to detail identities versus pure retail asset i mean pure crypto assets or other forms of stable coins that would not need necessarily a strong detail identity uh framework or or would you actually expect from retail cvcs to be a way to provide assets without that type of control or that type of attribution to um you know for for retail users i think a kyc aml is required and this is where i see the banks actually can bring value as well because how i see that we are talking about the blockchain dlt which is kind of global so i think uh we we need to see that the banks collaborating uh across continents you know within themselves uh to create kind of uh interoperable uh uh rank uh tech as well with regulators which uh uh i would say will be one vertical and the other vertical is the interoperability between those blockchains so this is how i see actually that with that this space again infrastructure will develop i also i want to explain to your listeners that em we are in parallel to cbdc we are building what is called self-sovereign identity this is the evolution of web 3.0 and this is what consensus is totally committed and which is the decentralization of um of the internet and the ability of the human being to keep their own data and that data not to be abused every time that you share it via via by a buyer you know who i'm talking about so the point is that it will run in parallel you'll see that the new world order will be that you will have your own little cloud with your own data with your own um verified identity verifiable you know have a look at what um the encounter of zouk did in switzerland and many others like they were evolving into that point where you are going to have your own identity and you that would be a natural kyc a process aml and and that could be programmed into into this cryptocurrencies in a very secure way okay okay that um that makes sense something we've now talked about is also the uh potential implications of um cbdc's um into well monetary policy right uh as you know towards the creation of new a new type of of money effectively there's a question in the in the chat by from paul cisner to philip says please also consider the viewpoint of cb that cbdc's will threaten the position of the doll the us dollar as the world's reserve currency uh he says cbdc is uh equals the end of the bread and woods area do you have comments phillip i'm not sure if this is really true because we see bdcs we are not introducing a new currency right we are simply creating a new infrastructure for existing currencies so therefore um i i would not share this thought actually because what what are we doing here you know we are in the past we had a paper printed on money now we are thinking about uh how do we get money and done electronically right now electronic is mostly being offered via commercial banks and we are now thinking about other ways to use electronic or digital money more efficiently but it still stays the euro and in case we will have inflation then the digital euro would also be inflated as well right therefore um talking about financial stability i would not i would not agree in any way with uh with many of the others saying that cbdcs are really threatening uh financial stability you know you can sort this house out from a technological perspective and also from another's perspective i think the biggest risk is basically not taking the serious it's another risk for not really dealing with this topic trying to delay it or ignoring it and if we look at china then we can see that it's already here china has been creating their digital currency system since uh 2014 you know that's more than six years and they are also thoughts out there that they would like uh to potentially use their payment infrastructure also for asian countries other asians countries except exact china and also potential africa uh countries in africa right so the chinese infrastructure also for uh for african monies right that's very very interesting but given this i think there are other threats mainly not taking this topic serious which are more severe than potential risks with regard to financial infrastructure and stability okay i think the the topic i mean the the point is even more clear in the case of tokenized money or or synthetic cbdc right like um like for example in the case of uh finality what we're talking about is um it's a synthetic cdc in the sense that uh you you put your money into a collateral account right which is a central bank and then you issue a token that is packed and um essentially it's a claim right against the funds that you have in the in the collateral account and therefore um it's uh it's it's as it says as if it were issued by the central bank but it's not it's issued by a potential risk i mean a potentially regulated um institution um using that so in terms of monetary policy there's really no nothing right you're just taking some of the supply putting it and then making it useful right usable on another form right it's just about the programmability so i i generally uh agree with that the the other consideration i would have is that precisely uh the programmability of uh cbdc's particular reasons abc's can also be useful in order to enact new regulation that can actually you know help in some regards like for example if you wanted to um to fight against um uh tax evasion or if you wanted to car concentration of um of richness i know i'm sounding a little bit communistic right now but there were there was a little bit of a comment in the in the chat about um jeff bezos having made more money in two quarters than what would be needed for vaccinating the whole world right which is uh is an interesting um aspect actually uh by having uh well the digital assets that are actually controlled by by central banks and regulators and the public institutions any kind of policy around these topics can be much more easily enacted right and i'm not i'm not saying i'm favoring this all i'm saying is that a laser technology is going to make this available i don't know and the other one for me that was ridiculous this year to white was last year to watch that how many millions of chicks were issued in the u.

s and put into the in the post you know the post doesn't work in africa so for us it was ridiculous so imagine if you had a cbdc wallet and then the government the central bank has to issue some support in instantly that money will be there i give you an example in south africa we paid to 20 million people social grants you know how terrible it was to watch old ladies queuing outside the post office in the rain with covert waiting to be paid cash so the risk is that they walk out of the post office around the corner and they get attacked because they carry cash everybody knows that they've been paid the social brand all of these decisions don't make any sense anymore when you know we have the technology today to uplift people's well-being and it can be done very quickly because the other thing that we must talk about julia is that this technology is very simple to implement this is not mainframes or sort of messenger or complicated you know big database in silos that don't talk to each other this is the internet it's very simple it's cheap there are no intermediaries and everybody can play with it we at consensus have a sandbox that we invite to everybody to come and use it and play so that they can learn so it really just required the willingness to make a difference and to make the changes and and we cannot wait for 2028 phillip i'm sorry please tell this ecb that by then they're gonna be history if they wait for them you know the time is now i hope that everybody gets your sense same sense of urgency that i have that this should be implemented as soon as possible okay yeah that's great um i think we need to start wrapping up uh because we're running out of time um there are a couple of questions maybe we can take that victorious is putting us here um and maybe we'll do some concluding remarks if that is okay victoria um one of them is was your view on cbc's being introduced by commercial banks versus it being an official ecb central bank launch in in in hostile cbd series i think the the answer is um is relatively straightforward as you know we are very you know we're very involved with with financing we know the case uh very well in this case uh the case of finality the the intention is is very clear right it's to help banter reduce counterparty risk right today a band would have a lot of voter accounts a lot of liquidity swamp in the system and if you can have uh central bank backed digital currency that you can use as a means for settlement with other banks essentially you can reduce the amount of liquidity you need and that liquidity is going to be central bank back therefore has no counterparty risk and that has a huge benefit in terms of uh financial costs right so in other words there is a very clear benefit for the banks in order to foster the creation in this case as in synthetic cbdc and they would be also i mean could also be done if it were a direct issuance model as well but when it's pushed by the by the industry because of a benefit for the industry that's that's where things get really really quick right as as we are seeing obviously with finality coming up together in the case of retail cbdc's i'm not sure there is a real reason by commercial banks to really push for the creation of this other than to foster innovation and and new payments infrastructures and all that as dean was was saying right i think we're more or less in agreement with this or would you guys like to comment i perfectly agree it's a it's a very dynamic speed it's very dynamically developing we have central banks pushing the topic we have a couple of commercial banks uh pushing this topic and we have a some tech fintech large big tech companies pushing this you know of course facebook with dm and so on so uh it's it's very dynamic but i would agree the the the retail cbdc is not a concept which is uh too often emphasized and being developed that would be my take on this okay the question uh was from sebastian becker by the way uh rafael really is um asking i think actually cbdcs are a greater threat to weaker currencies if transaction costs are low most people will hold strong currencies and switch to their local currency only at pos or even settle in in dollars euros so he thinks that cbdc will push dollarization um euronication that's a that's a good term i mean in the wholesale world i come from everything is already dollarized i mean there's a lot of payments going on in in dollars for particularly for large corporates and so on in you know in in in africa and latin america and southeast asia and all that but what would you guys um think about this one do you think there's a real real real reason for that you know because you know um a real threat for that or is this actually a benefit what do you guys think quick reply i don't think that that is flat i think the central banks actually will limit the amount of foreign cbdc fees that the individuals can have on their digital bullets and this is my quick anything sorry anything that gets limited it will find another way so we'll go into something else i'm sorry yeah but but yes i agree with you but what i'm saying is this is how central banks will will manage this uh i would say but the the other hand actually you know so it's a lot of things is involved what does it mean actually being a currency you know like main currency because of you know so we are talking about uh other things not just actually uh how this individualized how digitalization of the currency will help currency to be leading currencies so there are lots of other factors okay um the last question was about convertibility prices uh between digital euros and real euros i think there will be differences in the wholesale world but that's a very technical thing i think for the final i mean for the retail general public that the the difference should be not not um you know not not too easy to appreciate um but um anyway um victoria i think we've run out of time do we maybe have like 20 seconds for each of the 10 seconds 10 seconds to say with something do you want to go first yes of course you know i think education is key it's a very inclusive technology everybody can come on board you just need to invest truly significant volumes of time to get onboarded but then it's absolutely easy to to tackle from the central bank side i would hope that they are speeding up their ambitions and projects alternatively i would indeed see some kind of polarization and this would come through the back door of the crypto assets because uh from a perspective of a bitcoin holder you would like to have a stable coin this is the us dollar but as a as the tesla for example but it doesn't really matter whether you have usdt or euro because this is both equally stable when you come from a bitcoin perspective right so therefore i i would indeed see some kind of polarization perspective primarily coming from the crypto asset sector i also want to say that it requires education but the most important thing i want to say people take a hundred euros open an account download an app of your favorite exchange start playing when you start transferring with your little finger at three o'clock in the morning on a sunday buying selling not phoning anybody no working hours and you're doing it on your own and you learn how to do that you will never want to go to a bank ever again sorry not a bank branch no you will only want to be digital so it's experiential just don't be scared just do it you can also wait for consensus ipo some people were asking about the timing for that we need to we need to finish we need to finish guys dean you want to say something just to reiterate that i'd like to see cbdc's as a digital ultimately for uh digital payment system rather than uh this uh substitution for cash thank you thank you so much to the four of you amazing panel discussion and i hope to see you around in the chat now thank you thank you guys