Institutions Onchain

Transcript

It's okay. Yeah. Um, okay. >> Hi everyone. So this is the institutional panel. I welcome Arian Chalani from Eat Systems who are focusing on confident confidentiality for Ethereum institution. Uh I welcome Ruchir and from Polygon who is focusing on an uh open money stack and leading the Europe uh sector and I welcome Simony from Ether who is the non-custodial NEO bank. Um welcome everyone.

>> Thank you. >> Okay so I want to just get started because we have like 40 minutes and we have a lot of ground to cover. Um I want to start with you Richia. So my question to you is we've largely solved the asset problem stable coins, RWAs, rappers. What are the biggest remaining barriers for institutions to actually transact on chain especially around the risk ownership regulation? >> Yeah. So it varies market by market but I think the common thread across all of them has been well twofold regulation and liquidity right. So uh on the regulatory side again uh the problems in

you know India very different to the problems in Europe around what sort of regulatory uh perview is needed. Um but ultimately you know regulation brings clarity it it secures an industry and it encourages institutional adoption right I've spoken to a number of Indian institutions that have said that the the issue with transacting on chain is not um some sort of internal risk function it's a consideration of regulation um and then the other piece to this is as I said liquidity uh with liquidity what we're looking for is uh for for a gap to close between stable coins, tokenized assets, your fiat rails,

making sure that people can transact seamlessly without facing friction between different um forms of money essentially. >> Hey, yeah, that sounds really good. Um it's been a concern that like federation and everything but I'm glad we're having these discussions because innovation always leads and regulation follows and with this now we have enough capital allocation and resources to actually have these discussions and institutions are taking the innovative experiments seriously. Um with that I have a next question to Simony. I want you to share what do you

see the immediate practical where do you see the immediate practical value when institutions try to move from holding tokenized assets uh to actually using them for payments credit and treasury. >> Yeah, I think a lot of effort has been so far on um tokenizing you know real world assets bringing them on chain but uh now we need to make good on the promise of capital efficiency. So what what is going to be the main difference between you know having all these assets on the traditional banking system or brokers into the chain and I think that's our main focus at either five to provide like this vertical experience where you know institution and

corporates can on board can have their like treasury assets uh deposited on chain uh get yield on that um uh assets they own. But that that's just the beginning. And then uh with that assets they can you know without any paperwork without any uh permission they can start borrowing against these assets make payments to their suppliers to their their making payrolls to their employees making you know even traditional bank payments you know effortlessly bridging you know in and out of the fiat fiat world. And I think that's, you know, where we should focus next in, you know, making it very seamless and completely

transparent for this institution that they're actually using, you know, uh, blockchain technology and just be a better product, be a better experience and unlock um, features and uh, possibilities that are not available in the traditional banking world. And uh we have all the elements and you know what we are doing is just composing uh different uh dubs together and bringing our own magic sauce and making sure that we can provide a great experience. You know the ingredients are there. It's just now it's you know the app builders needs to do their job do their part in making sure that we get that adoption we we always wanted you know to have on

blockchain. >> Hey yeah I love that. Efficiency yeah is an important feature in financial markets for sure. Okay. My next question is to Aryan and so from your institutional work what has shifted in how institutions view public Ethereum and which of these barriers does privacy most directly unlock? >> Okay so I think uh the major unlock for institutions is twofold. uh for public Ethereum there's two things that are really good.

So the first thing is cost and second is risk. Institutions usually just want to manage both of these toggles essentially. So in the last few years, Ethereum's done really well on the cost side to bring gas costs down and that actually makes practical applications usable on the L1 and additionally on the risk side of things for an institution that wants an SLA. Ethereum has 100% uptime since 2015. So this serves as a sort of checklist that they have to provide their risk department and essentially privacy being the major unlock for them to be on chain is because they have a fiduciary

responsibility to their clients. uh which basically means that they should keep their clients data private but by having all the transactions in the clear uh they don't fulfill that responsibility and therefore privacy is sort of helps them get there but is not a silver bullet. >> Yeah, I love that we all take our video share responsibility seriously. Yeah, thank you. Um I want to move on to discussing regulation compliance and privacy and control. Um I want to follow up on that and in a wholesale context.

Um how you mentioned like so with each systems does uh modular privacy and I wanted to understand what exactly that means and privacy in layers for Ethereum. >> Yeah. So going back to what I said previously, uh privacy is not a silver bullet, right? Which essentially means that you need to have different ways based on the trust model and what your bank's risk department says. So there are a lot of use cases where certain solution families just don't apply and you have to actually dive into it very deeply. uh to give you an example I think in 2025 over 50% of US equities

that were traded happened off exchange um so privacy for institutions they've been using it for a long time but to bring that onchain uh you need to have a modular way to do it because there are certain financial flows that they want to keep offchain entirely and certain ones that they want to reveal selectively about on on the public network. >> Could you share more insights on what those selectively public things are like? Is it metadata? >> For sure. Um, so if we take the example of bonds, right? You have uh various metadata associated with bonds itself.

So you can have the bond ID, the supply and the maturity date, right? uh a financial institution wanting to issue a bond on chain might want to keep these three pieces of data public but the rest of it as in the actual transactions that it's been a part of or um any resale or any audits that happen for the transaction graph related to that bond they want to keep that private. So doing this in a modular way and making it actually composable with the financial flows they want is the major unlock here.

>> Lovely. Yeah. Okay. I want to also ask Rashir to how do we reconcile blockchain's global continuous nature with settlement and control requirements of regulated firms? Yeah, I mean uh the two things don't work together very often. Uh our experience has been particularly around you know the need to transact with the global banking system even when you're transacting on chain means that you know these things are not 24/7 always on right the collateral can be always on.

You can have liquidity on chain that can be pulled into a margin account instantly. But if you need to be able to transact with Tradfi, you need to have integration with banking rails. And those banking rails are not always 24/7, right? And your even your traders, the OTC desks, the market makers, these services are not always 24/7. So I think there's a there's a sort of misunderstanding or misnomer that that um you know institutional activity on chain is 24/7. It's not.

That being said, I think in terms of control and compliance, there's there's been a big shift in terms of, you know, um institutions creating custom uh, infrastructure, right? So, Polygon has CDK. A number of other chains have their own chain development kits that allow for institutions to build slightly more permission, slightly more controlled environments where they can um oversee transactions, control uh which participants are able to access that and and therefore gate access, right? So they can run KYB, customer onboarding, all of the things that we see in Tradfi

for a compliant institution to participate um in a trade. You can start to bring in some of those elements um on chain. And that's you know we likewise even with public open environments um you you see a number of services whether that's decentralized identity or um just more robust compliance processes for for onofframps. uh coming in to provide that element of control. >> I'm curious to know why isn't it 24/7? Is it a bug or an introduced feature?

Cuz um in the Indian markets right now we are optimizing the life cycle of corporate bonds where the settlement goes from like 24 days to like instantly. >> Yeah. So settlement is instant, right? There are a lot of benefits that come from transacting on chain. The problem is that your financial institution isn't holding its balances in stable coins or onchain, right? They may be holding collateral on chain, but to be able to move in and out of um, as I said, margin accounts or in, you know, um, in and out of their holdings of, let's say, digital bonds, they need to be able to provide fiat for those transactions. Um and

those traditional banking rails remain um constrained by banking hours. >> Okay. Okay. Thank you Simony. How do you handle identity compliance and operational resilience while staying on non-custodial? >> Yeah. Um non-custodial doesn't mean we are non-compliant. Uh unfortunately, you know, that means we we still have to follow all the regulations. Yes, >> it just allow us a little bit more agility and the ability to skirt around some regulations uh because we we are basically always not in the flow of funds and that bring us out of scope in

in a lot of flows. But um in you know many others we we do have to you know either work with compliant partners or we are in the process right now to get uh various number of licenses in u in our most popular countries and uh and that is you know more than you know a problem of institution is more a problem of us trying to serve you know institution corporates and even retail clients in these countries like India is a good example is a huge market. We would love to you know have you know some of our services here but like uh your government and regulation make it impossible to issue a crypto credit card

or you know we try to integrate UPI uh because I remember when I was in India just paying the rick show was a nightmare as a tourist it's really it's really difficult to you know get hold of a UPI account and I tried I spoke with a lot of you know suppliers here and it's really really are then I think it's um it's up to you as in you know Indians to make sure that you put empower people that understand this new financial word then otherwise you're going to be left behind you know UPI was great 20 years ago you know now we we you you know more than any other people understand what are the benefits

of blockchain and you cannot like you had your victory with UPI But now you need to evolve. You need to open up your system. Be sure that you are well integrated in you know the global system in the blockchain and put people in power that understand the re revolutionary potential of like blockchain otherwise you know you're going to be left behind and if you're you know behind on the financial world you know you're going to suffer as a country. So um yeah compliance is is a big pain uh is more you know it doesn't bring any joy to anybody every time we we do you know we have to do KYC KYB nobody enjoys it. It's just you know a

burden that governments regulator likes to put you know into private companies but yeah we we comply with all the laws and that unfortunately means we cannot serve great markets. We would love to, you know, work with countries like India and it's just impossible for us to do so. >> Yeah, I agree with Simone, but I think we need to get him set up with UPI because it sounds like he's had a bad time. >> Yes. Um, we'll set that up for you soon after this. Um, yeah, rules are fun, right? Compliance and everything. Um so is there anything that institutions push back on like oh we we want to because they have also very

hard compliance more than the uh new banks and I was curious to understand more on that >> uh I mean we they just get annoyed and uh the the problem is you know a lot of the times when you're working with you know the trfy uh word it just means that you know some things that they're used to get on blockchain like being able to you know trade 24/7 have great liquidity having you know payments you know execute really fast doesn't I think it was touched upon you know just before me like when you bridge into the uh trfy word you know you're it's different protocols even if you know the payments is settled in stable coins then it needs

to travel through the swift network or a fed in the US and you know these these you know their own problematics. I mean the whole point of crypto is because we got fed up of with these systems but uh unfortunately you know we are in a bridging phase where we need to integrate and make sure that uh institutions don't even realize they're on chain and but you know sometimes you know they they they get you know annoyed or surprised when you know we they get the uh they call RFIs or requests from uh for information um from this banking institution that we're banking with and they keep getting hit with this but that that's the reality of the banking system

right now. It's I I know that we are focused on you know a lot of problems on the blockchain with you know hacks and stuff but you know fraud is rampant on traditional rails too and uh the the system that banks decided to adopt is a aggressive you know questioning of any operation you try to do with your own money and if you ever try to you know make a large transfer with your your bank you knows you know it takes forever it's you know >> 20 emails back and forth with, you know, different compliance departments and and yeah, and when we bridge to that word, we need to comply with these rules and work with these partners and it's just,

you know, a brief annoying moment where uh we're we're moving from fire rails to like purely blockchain rails and then, you know, and then there's going to be like an explosion of like capital efficiency on a global scale. But we we need to bridge that money. We need to make a collective effort as a you know you know between all blockchains everybody every actor to make sure that this transition is seamless and as cheap as possible for everybody so that we can move on. >> Yes, >> if I could build on that um where we find institutions pushing back a lot on is the lack of specs and standards in the space. Um when the internet was in its genesis phase there were a bunch of

standards that large bodies used to govern. Um but right now in the whole blockchain space there is a lack of that. I'm not saying there isn't any specs and standards, but they need to sort of be written to tailor to a wider uh array of audiences. Otherwise, um we're just going to get stuck in our own silo and we won't be able to cohesively integrate as you said to existing financial systems.

>> Uh that that is interesting to me because we have such large scale institutions and the standards is still an issue is very surprising. Um I'm curious to know you all three work with institutions in various degrees. Um is there a shared vision because um in the side of things where like we have Robin Hood tokenizing stocks um I have heard glimpse and rumors of a shared vision like global stock market exchange and is there any shared vision or if it's not global stock market exchange if it's is it something else?

Yeah, I can uh I mean my experience has been that uh institutions typically don't like to work together particularly on shared infrastructure uh and blockchain or you know any sort of onchain marketplace creates a uh unique problem for institutions because it forces them to work together towards a shared vision. Now that doesn't mean that there isn't a lot of um uh difference in opinion in terms of what is the right form of money that should be used by institutions on chain, how should uh you know how how does access work as an example. So, you know, the way that a

Revolute is looking at um you know, entering um onchain marketplaces is very different to let's say how a a Barclays or an HSBC is. Um and you know, some are looking at this from a risk perspective where you have your traditional banks considering launching their own tokenized deposits using commercial bank money. Um and on the the flip side, you have far more tech forward organizations, fintexs in in particular, that are that are looking at this from the perspective of um trying to use uh digital assets as a way of stealing market share from these traditional players. So I think that that tension is

still there, but it's a good thing. >> Lovely. I personally think that we're far away from a global stock market uh or exchange especially because uh as you said we're still in like the growing phase and there is no singular solution that has won the market share right we are going to see a multi-chain future we are going to see a bunch of permission networks we are going to see a bunch of consortium networks uh so to have a single shared substrate it would probably just be for security purposes but not uh as a data passing layer for the global messaging uh global stock market. Sorry.

>> Okay. Yeah, I hope we get there sometime soon. But thank you for yeah sharing. Um so what does the role of tokenization in plays in enabling crossber collateral mobility? um and what's still needed for the collateral and cash legs to work together with real interoper interoperability and singleness of money. You both shared like the standards and specs are really important but is there anything else that is holding it back?

>> Uh I personally think it's the fungeability of tokens. Um again you can have 15 different token standards um and you can have multiple different confidential token standards but the actual fungeability between each of these even though they might look similar but the fact that they have different compliance rules or different execution models entirely uh really raises a red flag for these institutions because they want the smoothest experience possible and they don't want to um sort of work with multiple standards at the same time. They would like a single unified interface of sorts uh which would serve all their needs.

>> Yeah, thank you. >> Yeah, I I think we're going to see private players playing a role of bridging uh liquidity between um a whole range of different forms of money on chain, right? whether it's your RWAS like a money market fund or um other private stable coins or or tokenized deposits or CBDC's. I think where where the market is heading is today there's this quite uh a big problem of liquidity fragmentation but the industry is pretty aware of that right like it's not something that is going to creep up us uh creep up on us uh so I think where we're going today is to see you know your large stable coin issuers working

with financial institutions working with regulators and central banks to be that bridge between um you know your your commercial bank money, central bank money, and um the rest of crypto, other other use cases, private stable coins, um whether there's a USD, non-USD. Um and and and I think um alongside that, we're seeing um smarter liquidity models being designed to to be able to make sure that people can move very quickly from between different chains, between different assets. Um, these are all problems that are being solved today.

It's just it's going to take some time. >> Oh, wow. Thank you. Thank you. Interesting. Um, to Simony, I'm curious, how does automic or near automix atomic settlement change capital efficiency and credit risk in practice compared with traditional banking or pure defy? I think the the main difference is that it just allow us to have uh more permissionless operations like uh we recently moved um uh and deployed our own instance of a v4 on optimism and uh the the big unlock there was that you

know every single asset we supports now can be used you know for uh for our you know lending operations and uh institution retail everybody you you don't have to have like bank spe special permission to get a lumber loan you can just you know deposit your asset on etherf and you know permissionlessly start borrowing either you know USDC or whatever other asset you want to borrow again against you know this asset you deposit and and the beauty of you know having it atomically is that you know you don't have to you know you don't have to ask permission for a credit line you don't have to do paperwork it's just

the fact that it sets everything you know atomically means you can you know borrow whenever you want however you want you know everything you know is pretty clear from the start on how it's going to work you know the the rules are specified in math and you know that comes you know with also you know less flexibility in terms of like you know if you're in your liquidation threshold you're going to get liquidated and and it's up to us you know to build a nasi experience so that the users are aware of that you know both you know sophisticated actors like institution but even retail that are maybe less familiar with you know uh a and it's all about you know creating a

great experience and uh making sure we find a way to explain it plainly how how it's going to work and you know what are the advantages and also the risks uh associated with that. >> Okay. Yeah. Got it. Got it. Thank you. Um I just want to remind the audience that we'll take Q&As's from the audience in a few minutes. Um please have your questions ready. Um so everyone I want curious what does the next 18 to 24 months looks like? Cuz I'm asking 18 to 24 cuz we're also in web 3. we move fast but it's also like not like a 5year plan. Um I was curious to know what things do you see happening.

>> I think uh it's not only the web 3 space that moves fast now. Everyone's moving fast with AI, but at least in the next 18 to 24 months, we might see a bunch more pilots relating to uh bridging traditional financial flows onto various forms of distributed ledger technology. Uh we're going to see a lot more integrations. So, not just pilots, but we're going to see people who have passed the procurement process and have gone through the entire regulatory cycle of working with institutions. We're going to see a lot more uh development in the space in that sense. We're going to see a lot more interop, a lot more

composibility. >> Okay, nice. Yeah, I mean I I think the number of conversations I've had in the last six months with uh traditional asset managers um and different hedge funds that have said that they are starting to uh you know trade digital assets because um you know they they've they've seen an opportunity. They've seen it's easy to to access liquidity now. Um and you know there's there are now the same sort of assets that their risk department would sign off on whether those are tokenized stocks or um you know a whole range of um uh treasuries, money market funds,

etc. that that allow for for these institutions to come on train. Um I I think I've had way more conversations in the last 6 months than I've had in the entirety of my career in in crypto before that. Um and I think that momentum is going to pick up more and more pace over the next 18 to 24 months to the extent that um for for pockets of the world particularly where regulation is well set. we will see um more and more institutions either dipping their toe in the water through pilots as Zimman said or um you know even going further and and establishing full fully functional OTC desks um offering prime services to their

institutional customers. I think um you know it's going to be a a very fastmoving um block over the next couple of years. >> Lovely. I'm excited for I would love to hear Simone's thoughts too. Yeah. Uh my opinion is uh we have now you know all the building blocks is just really up to us app developers to build a great experience. We have more block space than we ever imagined we would have. We have all the you know bridges we we need to you know bring these clients what retail corporate or institution on chain and uh a lot of effort has been made in you know integrating these blocks and at least for etheri I think we are close to

have you know the basic foundation there and I think now it's where the fun part starts is where you know where we're going to show you know what blockchains are really capable of what you know experience were not previously possible on the traditional finance world. Just a little spoiler, we're working on payment links. So, basically a way for a, you know, normal, you know, link to carry value, you know, may it be, you know, some USDC or a stock and just permissionally send to anybody without having an account with either FI or anywhere in in any blockchain. And it is such a powerful you know show of you know the potential of a blockchain to to just send you know somebody some value

and have it contained in a in a small link and that experience you know cannot exist on web two there's no standards that you know can unlock that blockchain is the technology we have all the building blocks and you know if we fail it's just on us you know not doing enough so yeah I think everybody should do, you know, should do more. We should build more apps. We should use more block space and uh take advantage of the perfect time we we are on. >> I agree. I agree. I believe that the rate at which credit and debit gets settled moves the markets and blockchains are helping enable that and become even more faster and efficient.

Okay. Now, we have some questions from the audience. Um I'd like to ask anyone can take this question and uh you all can share your opinions on a question. The trafi world offers protection to asset owners trades counterparty ownership etc. Besides insurance what would be the way to bring those protections on chain? I I do have an opinion like anything that exists in TRFI can be replicated on chain that sort of a protection you know there's nothing that prevent us to make you know uh you know let's say like a payment like a money transfer USDC to

somebody reversible we have that technologies whether you know we want to build it or agree on a standard and accepted that maybe you know retail payments are reversible maybe there is a way for somebody to claw like the payment in a reasonable amount of time is whether you know we want to do you know we want to go down that road or or not. I think anything that exists on TRDFI can be built on chain and it's up to us now to build it >> and and in a lot of cases those standards already exist. It's just up to developers as to whether they want to build with those standards, right? We have the ability to to claw back stable coins on most chains as an example. Um and even with the Binance hack, right?

We've seen how stable coin issuers have responded. um you know there may be mixed opinions as to whether that's the right approach but both circle and tether have frozen funds um almost immediately right um and again you know just to build on what Sony said there's there are different custody models different counterparties that you can transact with I think the best thing about um institutions coming on train is that they will provide a wide range of optionality right it's entirely up to you based on your risk appetite and um you know the the type of reward you're trying to build against that to to decide what risk profile is

best for you. >> Yes, lovely. >> Yeah, I mean I I was just about to say we live in a pluralistic world. So us having multiple assets with all of them having different kinds of controls, I think that's the endame, right? You would choose what you want to participate in. And if you wanted certain protections like uh if if there is a hack and you would like your funds back then you can definitely hold your assets in some form of uh token which allows um either freezing or securing your assets after such a situation.

>> Thank you. Thank you all. Um I I'll just check if we have time to do one more question. Okay. So, uh, I'm curious to know if you have any thoughts on governance technology of all of these things. We've only been we've been sharing like oh rules are so fun you guys and makes it so easier but um what would it mean and like do you have

any opinions on like with the agency coding and everything we governance can also catch up like innovation doesn't always have to lead and regulation doesn't have to always fall back with gov techch and experiments going on we can always catch up with the innovation I was curious to know if you have any thoughts on I think right now there are a lot of organizations in the space that are doing a really good job at uh advocacy for Ethereum or uh blockchain technology in general. You have EI based in Europe. You have the GPS team at the EF which uh speaks actively to regulators to sort of nudge them in the right direction. And honestly, it's just a developer

developer problem and a regulatory problem, right? So once we're solving things on the engineering side, they can be done in parallel on the regulation side >> and we forget that regulators also are global. They talk to one another. They learn from one another. Right? It's just a case of you know we've been waiting for a long time for the first set of regulators to take that move to encourage you know the the innovation that you talked about. But I I think we we're past that step now. Um over the next few years we'll see a whole bunch of great examples and case studies coming out of those markets where regulation is more well suit set

for crypto. Um and I think as a result we'll see other regulators taking that example building on it and you know either expanding or changing regulation in their own home market. So I think um yeah there's there's there's an element of cross uh crossborder exchange of ideas as well. Yeah, I think it's an interesting time. Uh like regulators are very fair weather uh thing. They get easily spooked especially know when hacks happen and it it's changing now and uh I don't know if in a good way uh you used to be able to overwhelm regulators with you know technical terms and they don't

understand it and they just allow it. But now with LLMs that you know can break down stuff in easy terms for them you know they caught up. So it's now you know on a more uneven fight and uh it's going to be interesting. I think we you know we need to make sure that you know smart people are on both side of the table. So the regulators they they just do whatever the government you know wants at the end. So you know let's put you know the right people in the right position and you know everything is going to be you know working fine. We need to make sure everybody is protected and regulator have you know that function of like protecting the you know the general public and institution and uh you know the banking system but yeah

let's you know let's work together with them. let's you know uh really push hard and try to explain what are the advantages they they do now have the the you know the tools to understanding so they they're getting smarter than they used to be so yeah let's take advantage of you know their smartness and uh make sure they understand um the technology as well >> okay yeah I like that we can't we can't uh overwhelm them and they also move with us and it's all So nice. It's al it would been fun but also nice to know that we can move together.

Um so um I'm curious to know is there do you have any reaction to Hong Kong or India using CBDC as inter settlement vehicle? I think it's great. Uh if they're able to do this privately and if they're able to inherit the security properties of a shared substrate like Ethereum, it would be the best. Um but yeah, it's our duty to make sure it heads there. I don't think anyone's against CBDC's in principle. Um I think again speaking to financial institutions in India the the rate of adoption or use of the um of the

digital rupee has been um fairly limited but again you know there's there's a there's a phase of experimentation still going on so I think institutions will learn and build from there but you know uh what what I would ideally like is a marketplace where a CBDC can uh coexist with private forms of money, commercial bank money um and you know the user can pick what you know as said it should be up to the user to decide what risk profile works for them. Uh I don't love the idea that a regulator forces the use of one particular digital asset that

that asset should win on its own merits. I think there is a huge opportunity for government and I'm surprised like yeah the problem is government when when you see a new tool a new tech it just use it to you know qu people and to control rather than you know understanding what are the full advantages CBDC could be amazing if if they if the government see oh that that's a cash like you know tool I can I can use you know instead of like having you know new ways to control and spy and dictate you know how the people should use their money. I think government should just you know issue their own CBDC on Ethereum make it you know cash like completely you know uh

unfreezable and irrevocable and it's just a fantastic tool to you know push your your debt into you know these poor folks on the blockchain you know it it's you know just see it as cash you know it's great and I think you know government are just so right now fixated on you know spying and controlling people that they kind of miss the big picture like CBDC have this you know very negative connotation because yeah the every single experiment has been done in a you know in a private you know very permission blockchain that cannot be integrated with anything you know mandated by law so they just missed completely the point and uh you know they can push their own debt to you know

random people globally they should take advantage of that just issue like a cash instrument on chain and you're golden >> I agree with you But uh I think there's some nuance to this specific question where if all the participants of the network are only banks then uh it's really okay to be using CBDC's if they want if they want all the uh abilities to freeze assets or they want full visibility if the regulators want that they should get it because it's transparency for banks at the end of the day right u but if a retail user is involved or is an active participant of such a transaction then uh it makes sense to ensure that their rights are

secured but if it's only banks that are participating in the network then it's really fine if it's transparent to the regulators and no one else >> I think as we said with protection it's something you can build on top of the CBDC but I think CBDC should be cash and if the government understand that and then you know they build their own frameworks and they maybe mandate you know banks to operate in a different framework you know with that CBDC as a you know building block then it works it just they're missing on adoption you know nobody's going to touch that stuff and you know if you make it on a private blockchain that is just interbanking you know payments you know that then is just

you know a payment method like a bank transfer like method rather than cash and I think the big opportunity for CBDC is to be a cash like instrument like completely anonymous you or irrevocable and easily transferable. >> Okay. Yes. >> Love that. David, do you have any thoughts with you? >> Yeah, I I I'm not sure I agree with Sony. I think we we're going to struggle to convince um central banks that a CBDC should be a cash option particularly in a country like India where um digital payments by and large solved is a problem right now of course there are

there are issues would people be able to like to have the ability to earn in their wallets um be able to you know make more automated or programmatic payments yes but honestly some of that stuff could be solved through the existing infrastructure through UPI, right? Um, people have digital money wallets. The RBI decided to pull away from them after an experiment. Um, people have the ability to make uh instant payments uh to anyone locally and transact. I think the problem is is at a you know, it's a it's at a different level when we talk about wholesale payments. Um, the financial system could be far more efficient. I think you know CBDC's being

used as a form of cash work in some markets. I I just I don't know if India is one of them. >> Hey, lovely. Interesting. I want to ask do you or anyone of you have any hot takes or controversial takes just to leave the room with like bang. This one the CBDC and everything was one for sure. uh the scale and adoption and integration at scale is very different. Um but if you have any hot takes I'm curious to know or just an opinion that you want to share with them. Uh you know what I would like is over the next few years that we see non USUSD stable coins

starting to to hold their own um and uh particularly in emerging markets where we see you know the risk of dollar dominance today I would love to see more use cases more adoption of non-USD stables >> lovely >> I mean it shouldn't be controversial I know that we are in a phase where we're pondering to institution regul ators etc. But let's not forget you know why we started the blockchain and you know these technologies. Let's not forget our values and you know keep fight you know keep fighting for it and trying to change the world where we can.

>> Yes. No hot takes from me but um I would say institutions really love crops but not in the strictest sense. They love Crocs, censorship resistance openness confidentiality, and security. So, they don't want complete anonymity, but they want Crocs. So, that's the only difference. They really value decentralization. They value open-source projects. And of course, they value the security angle of things. >> Oh, wow. Love that. Crocs are going to stay with me. Not in the fast fashion way, but in the institutional