EXCLUSIVE: FT Live Crypto & Digital Assets Summit
– Bobby Suman, Fintech Finance
One of the key reasons I love going to events is because it’s a great opportunity to hear industry leaders discuss some of the most exciting topics in the world at the moment. The Financial Times Crypto & Digital Assets Summit did not fail to disappoint. With that in mind, here are my top 3 talks and the big discussion points that were covered.
Crypto In Emerging Markets – Will Greater Financial Inclusion Bring Greater Systemic Risk?
Sandra Ro, CEO of Global Blockchain Business Council
Susan Friedman, Head of Public Policy at Ripple
Jillian Godsil, Editor at Blockleaders.io
Adrienne Klasa, Asset Management Reporter, Financial Times
“There is every reason to be positive about where the market is going”, said Susan Friedman, Head of Public Policy at Ripple. The fear of volatility has always been attached to crypto, but does it outweigh the ability to bring those who are underserved or unrepresented by the current financial system? Friedman discussed the benefits of crypto in solving the problems of slow and expensive cross border payments process. With increased speed, transparency and lower transaction fees (in some cases, 6% less), crypto can truly benefit those who understand the importance of every dollar to buy food and shelter that such percentages affect.
Jillian Godsil, Editor at Blockleaders.io, expanded on the importance of these percentages by citing examples of crypto usage and adoption amongst Ukrainian refugees. The strongest, to me, is the establishment of the Unchain Help Card launched by Weld Money, which uses stablecoins in a centralised exchange. Unchain Help Card is a virtual card made to help Ukrainian women with children. Not only is it the first charitable cryptocurrency card in the world, but it looks like an ordinary card which people can quickly receive financial assistance, purchase food, shelter, and do all at the point of sale too. “This gets around the problem of the last mile”, said Godsill. “10,000 women have received this relief and that’s 10,000 more women that will understand crypto after this war”, viewing it as a saviour. This could transition how people think about crypto, as many still approach the crypto world with a fiat mindset, reacting too emotionally at how the digital currency can circumvent, change and improve the traditional system of finance. With all this discussion, it was also impossible to note El Salvador as a case since it made Bitcoin a legal tender. Here, we saw mixed reviews on the venture, whilst Godsil noted how those on Bitcoin Beach believed, for the first time, that crypto gave them a future in the region instead of having to emigrate abroad, Sadnra Ro, CEO of Global Blockchain Business Council, took a more sober tone. “It was a bold move, but not coordinating with other entities like the IMF, The World Bank and being cut off by the global financial system means you exist in a very limited world.” Ro believes a more sensible approach would’ve been to a slower, evaluative process before blowing to legal tender, however it still is an experiment in progress and deserves continued attention, lots of lessons to be learned.
Binance CEO, Changpeng Zhao
In a conversation hosted by Adam Samson, Market News Editor at FT, this talk captivated me. After all, how often do you get to hear from somebody with a supposed net worth of nearly $100 billion!?
This discussion was largely centred around trust, as the two grappled around the narrative that crypto is volatile, fraudulent and a risky venture. Zhao very assuredly tackled this notion; “according to Chainanalysis, 0.15% of crypto transactions were associated with illicit activity, whereas the United Nations said 2-5% of fiat transactions were associated with illicit activity. In the last two years, many of the tech stocks are more volatile than Bitcoin. The data shows that Bitcoin is more stable than Tesla & Apple, despite all of the narratives that say otherwise.” Are the accusations towards crypto fair? With a platform like Binance hosting so many coins, Zhao carefully noted that whilst there is always risk attached to any investment, Binance has, and fulfils, its responsibility to perform due diligence on the coins it lists. And when it comes to stamping out fraudulent coins, Binance works with law enforcement to enact this. In fact, Binance has worked to recover over $200 million across 10 fraudulent projects already in the community. Whilst that figure may be large, it is largely a misconception that people use crypto to launder money broadly since the traceability of blockchain.
“I think any player in the industry is important, no matter how big or how small”, said Zhao. “To that end, we do a lot to protect our 180 million users. If you’re going to deposit your hard earned money on a platform, you have to trust it and people trust us. We have to be vigilant to keep that trust and we will continue to do so. We do have the largest liquidity in the global market and are proud of it. 99.7% of money is still in the fiat. Binance needs to be the bridge between the fiat and crypto world.”
CBDC Leaders’ Panel: How Much Global Coordination Are We Seeing?
Timothy Lane, Deputy Governor, Bank of Canada,
Charlotte Hogg, CEO Europe VISA
Gilbert Verdian, Founder and CEO, Quant
Dr Thomas Hardjono, CTO of Connection Science and Technical Director of the MIT Trust-Data Consortium
Cryptocurrencies were originally viewed as an opposition to the mainstream financial system, and now even the largest authorities are experimenting with their own ‘version’, shown in wholesale and retail CBDCs. “CBDCs are here to complement and be an overlay on the existing system, not to throw it upside down”, said Gilbert Verdian, Founder and CEO of Quant. ”Before cards existed, we would carry cheques and cash. What we’re going to see is a real evolution of money with built-in controls, fraud prevention and the same resilience and security that consumers trust they will receive.”
One very fascinating question emerged in this discussion; are CBDCs a vehicle for mass surveillance? Why shouldn’t we let stablecoins compete against each other and just use them instead? Gilbert Verdian did vouch for the place stablecoins and crypto have in the system and that regulating stablecoins is already happening, however CBDCs are especially useful when coming back to the notion of resilience and the risk in the system. “A central bank issuing a wholesale CBDC allows commercial banks to issue commercial and regulated stablecoins. They are interlinked and that technology provides much more accurate visibility of systemic policy, risk, resilience through that governance layer.”
Charlotte Hogg, CEO Europe, VISA, explained the importance of differentiation and competition in the CBDC space. “In a digital world, you never want one answer. However strong a belief you have in technological innovations, having competition will always provide resilience. Payments are about enabling consumer experiences and we need to make sure we maintain the feed of continuous innovation in that space. We need to build a collection of platforms that are more resilient – people who love the backend of payments can forget who it’s all for at the end of the day.” To conclude, this talk really did consider the principles behind CBDCs as opposed to just tech-spec, which was refreshing as it is somewhat lost in contemporary discussions.
With accelerated regulatory frameworks and composed of responsible individuals who collaborate with policy makers to protect the ecosystem from manipulation, crypto is no longer an outsider of the global financial system, but is a genuine constituent inside of it. 2022 continues to be an exciting year for crypto!