CBDC Platform for Innovation | European Blockchain Convention

foreign [Music] hey good afternoon everybody um so we just passed 12 o'clock so I'm allowed to say lunch time um but you've still got another couple of hours before lunch chatting so um I'm gonna talk about cbdc's um so I'm sure everybody's now heard about cbdc's probably about two years ago not many people did so um let me talk to you about what what they mean for Innovation because it's very important okay so very quickly I'm Anthony welfare I'm senior advisor for cbdc's at Ripple um I've been around the blockchain space for Enterprise blockchain for about seven years um and I've written a book on it as well so if you want to learn lots about commercializing blockchain have a look at good book shops um James mentioned Ripple yesterday so James RVP for cbdc's uh Ripple's about 750 people um we're growing massively which means I never update the slides so we grew by about three four hundred people last year um we're cross-border known for our cross-border payments but we also do lots of other um sort of projects using xrp Ledger and other sort of Technologies one of those is cbdc's and we've been working on cbdc's for around about three years now okay so the previous speaker or a couple of completely speakers ago talked about the history um and it was it's quite apt it's quite important to talk about where we came from to where we're going I'm not going to talk about the history it's it's very clear um but we're at the sort of digital currency end and we talk about digital currencies and we we look at a mix of digital currencies for now and the future what you have today we class as electronic money so if you think about the money that's in your bank account on your app that technically is not a digital currency it's not a token so that's the difference that we're talking about here and it does enable a lot of different things as we all know with crypto you can do so many different things with Bitcoin xrp ethereum a cbdc is issued by a central bank okay so it's the same as the dollar or the euro in your pocket it's it's issued by the central bank and it's to use and you know in in whichever country you are Etc in the middle we have this mix um s cbdc is sort of synthetic cbdc which is um you know like a cbdc that could be issued by a central sorry Commercial Bank as part of the banking system this bit in the middle is work in progress um I used to have a slide with loads of different sort of explanations of stable coins and different types of stable coins and literally I'm sure it'd be 20 slides and there's lots of different words and meanings what we look at is is sort of stable coins in the middle to the right hand side as you're looking at it we will class them as regulated stable crones okay so we know there's no regulation really yet but it should be coming hopefully a regulated stable coin we would say is backed by a bank which has one dollar for every token issued as such so we see that as a regulated stable coin and very similar to a cbdc really it's one you know one Euro of a token is one Euro in a bank vault Etc with some sort of collateral the other side of stable coins are the ones we have today um so usdt usdc all those sort of stable coins that are issued today on different blockchains and on public ledgers and then obviously on the left hand side as you're looking at the the slides we have cryptocurrencies we still believe they will exist in the future you know we're not looking at this where cbdc's will be the only thing and cryptos will be nothing and vice versa that makes that scale could be anything yeah so at the moment it's something like 97 90 of the money that we have in our wallets um is actually Commercial Bank money so it's near the right hand side that probably will stay similar for some countries but change so it could be a world of 20 30 50 cryptocurrency one percent cbdc or vice versa or any sort of mix on that so we need to be ready for a world of interoperability and sort of bringing this all together what do you need for a successful cbdc James mentioned this yesterday very quickly so I'll talk a regulatory framework there's been so much discussion over the last few days we need the regulation and we need it to come out we need it to be fair and reasonable and plenty of discussion about that we need the technology enablers so we have the technology but we still need to work on how to make it better quicker and easier to use for us as humans the most important point for me is that I can use this this currency as well as my grand who's 99 or my mum we should all be able to use it the same and then finally most importantly is benefits there's no point building a cbdc or a regulated stable coin for the fun of it like there's just no point build it for benefits and let's talk about a few and this is my favorite chart because there's too many words on it but I wanted to put us put some information up there on the left hand side what we've just got the high level what are the differences to traditional money to the to the money that we use today in the system so it's direct access it's you can send it P to P so cbdc I can send from me to anybody straight away I don't need a bank I don't need anyone else programmable money you can program the movement so I could do recurring payments for example um programmable um sort of sorry programmable payments so you can make it pay and do different things split payments and do things like you know whatever you need in terms of smart contracts programmability transparency really important everything that's on a blockchain is trusted and trackable okay it doesn't mean everybody has to see everything yesterday there was a discussion Banks do not want everyone to see every transaction on a blockchain but there may be certain points certain levels that may or may not so in essence you can control that that's the point and then the last one it restructures the cost base if we have a payment that we can make a to B without any intermediaries it's a lot cheaper because you've not got all the intermediaries in between benefits innovation in new Industries I'll give you an example on that Financial inclusion the network grows its scales improve liquidity because you've got more currency flowing optimizes the value chain so you can pay up and down the value chain the supply chain very quickly and then obviously insight and risk management everything's tracked so therefore you can get better analysis and information let's give you an example so everybody knows the gig economy and we all know we've been talking about this for a while this is a massive you know industry so 455 billion dollars and I'm sure there's other estimates that are just as big there's three reasons why this economy is still growing fairly slowly um centralized digital platforms uh complexity of huge payments so imagine your Uber payments when you use a taxi you know there's so many small transactions and there's there's millions of them and then to to grow these there's a lot of capital if you use a cbdc you will be able to Fast Track a lot of this and make it quicker and easier three examples um if you're a dancer I'm not going to dance so don't worry um but if you're a dancer or you know you do some content on Tick Tock or whichever sort of uh platform it's very hard to get money you know you but you would easily give 0.01 P for somebody that was dancing on one of those funny videos because you know it's not going to cost you much but you're not going to give a Euro you could do fractional payments with a cbdc you could just press the button and give 0.01 P which for the person could amount to tens hundreds of dollars a day which in you know developing parts of the world could be a massive massive difference second one has anybody waited to get payment for something they've sold we all have we have to wait if you set it up with an atomic payment once the goods arrive the payment goes through straight away and it can be very quickly the other side of that is that I've done the service and I didn't get paid so the money's being held so again you can easily hold it or let it let the money go whenever you need to as quickly as possible so just a few quick examples of how you could do that in in you know with a cbdc and then finally just to bring you back to reality this is real um we're working with a number of central banks these are the two that we um have announced Royal monetary authority of Bhutan that's the full cbdc so they're a Sovereign Nation and that's issuing and using their currency in that sort of very very much in progress and then finally Palau which is going to be a government-backed stablecoin a US dollar stable coin but it's backed by the the plow governments and the money will be held one for one so it's a regulated stable coin and one of the first that will come out okay so thank you very much for that and I hope you enjoy the rest of the day foreign