Liberating Money: The New Era of Instant Settlements

Transcript

going into the first panel on liberating money, the new era of instant settlements. And it is my pleasure to welcome on stage four experts. Um, first of all, I'm calling on the lady in this amazing panel, Tanya Griffith from Ribble. Please put your hands together. Next, we have Oscar Flores, the CEO and founder of Unblock. Please come on stage. Then we have Jeffrey Wallace from Next. please come on stage. And last but definitely not least, we have Ilia Vulov, the CEO of UODER, board member of CVA and the ideator of the web three banking symposium. Please, the floor is

yours. >> Thank you, Ben. So, it's nice to compete with Monet, right? So, that's why I'm not very much upset that some people are uh still not in the room. So, it's like a big honor to compete with Monet. So but let's let's begin uh and let's begin from of course traditionally from quick round of introductions but I have a short question one sentence what does liberating money mean to you? >> So uh liberating money it means redefining global value movement by combining the reliability of fiat with the speed efficiency and liquidity of crypto. Wow, it was not one sentence >> Jeffrey. Uh, no, a quick quick round to

find. So, yeah. Oh, and apologies. Uh, Tanya Griffith. I lead Ripple's, uh, commercial team in London for fintech and crypton natives. Um, and we also have another colleague uh, here, Michael Stark, who heads up the business looking after the Swiss region. So he's here for any discussions afterwards as well. >> Thank you. >> Good afternoon. My name is Jeffrey Wallace and I am uh CEO and founder or one of the founders of Next, which is the first US blockchain bank. We'll tell you more about that in a bit, but I want to say thank you for including us and uh in this panel. And then also the fabulous uh collection that we're able to see during lunch. It was really

inspiring to think about the sorrow and suffering that actually built the journey and the story to those that curated and collected that uh that beautiful collection of innovation and art and culture. And it was very inspiring in the sense that it really reminds us that if building the right framework and building the right foundation, liberation can be achieved and great things can be done by great people. And I think that is a big part of why we are here and why we exist in the financial services space. And so to kind of take that forward, um our purpose at NEX is really to ensure that our clients capital is safe and secure at all times. That it's also accessible

and available and transferable 24 by7 or better described when the opportunity the economic economic opportunity presents itself for them. So we want to be uh available to our clients ensuring that whatever happens whatever avails them uh for their economic opportunity we can uh satisfy that and so that's why we exist as a bank and that the design and the structure that we have built uh really reinforce that. >> Amazing. Actually um you're saying that you're first globally first bank which is um operational 24/7 365 days a year right?

>> That's right. We're blockchain enabled, blockchain native, I should say. Essentially, everything from deposit all the way through our general ledger uh transactions are reflections of our liquidity uh are processed in real time, auditable uh immutable and reflected uh in our clients wallets at all times. And what really is interesting about that is the model carried forward. Uh we are full reserve bank in the sense that we do not uh lend against our clients deposits. We hold our balance sheet in total uh reserve at all times which really ensures that our clients as I said before their capital is safe and sound but more specifically are able to transfer between counterparties

immediately and ensure that legal beneficial settlement occurs with no obligations that are outstanding related to the other liabilities of the bank. >> Thank you Oscar. Uh well uh first of all thank you for having us here today and especially with the the uh exclusive people that has been attending the conference >> upstairs >> everyone. Okay. Um I'm the CEO and founder of unblock. I've been for the last 26 years in payments operating in several jurisdictions both on the acquiring side and now on the issuing side and having started our journey in

uh Latin America I would say that u we face way more challenges over there. If you're uh walking in the middle of Zurich, you probably have any financial need uh covered as you would have if you're walking in the middle of Manhattan. If you're walking in the middle of Boota, that's not necessarily the same reality. uh to answer your question I will tell you that for me liberating money uh it's equivalent to uh transparency in terms that uh I I I had let's say the privilege to to grow up in Geneva uh and when you're young here you had your first bank account at

13 14 years old you have your first bank card at 14 15 years old everything is seamless everything is transparent your parents just tell you go there you get your back everything is easy right I strongly believe that the next phase with stable coins and uh let's say blockchain technology is we have to bring that level of uh frictionless and seamless transparency uh to money but uh without borders because today your competitor is not the guy that isn't sitting next to you it might be a company 10,000 miles from Right. And uh unblock uh focuses on that on bringing usability on bringing uh

let's say either ramp on or ramp off solution that it's supposed to be transparent for the end user. The same way that I will challenge anyone here to uh tell me if you ever went to your bank to ask how your whatever poss behind the rails, you know, we just take it for granted and we just use it and I think we're, you know, working very hard to do the same uh with blockchain technology and digital assets.

>> Thank you. Sounds great. So, and uh speaking about completing the c of introductions. As Benny said, I'm a board member of crypto association. This is my night job as Benny said. So speaking about my daily job, I'm managing newer fintech company and actually here I'm not just a moderator because I'm actually partner and uh corporate client of everyone on stage. So because we're actually working with every company and that's why actually we can go even deepen uh to discussions. So and let's let's really go deeper. So first question to Tanya, right? um uh we see that evolution of payment settlements is speeding up and I'm pretty much impressed with the progress uh that we see coming from Ripple

because Ripple actually delivered something that was committed at day one right so uh it would be really good to learn more about Ripple payment network because really I personally see huge progress there so could you please give us a bit more insights what what is happening there >> of course thank you for the endorsement so I think with Ripple we're seeing you know the likes of banks and FIS becoming much more comfortable with crypto and blockchain blockchain payments especially you know stable coins stable coins for us as a payment method are one of crypto's most proven and scalable use cases um and our customers are obviously recognizing the benefits of blockchain such as the increased efficiency uh reduced cost faster settlement times 247

and that enhanced security And you know, as a business, we're with what we have built, we're already seeing European banks leaning into this by enabling their customers to buy, sell, and indeed manage cryptocurrencies. And from our perspective, this is a a clear result of course of, you know, the Mika regulation within uh the EU. Um, additionally for us and a driver for what the evolution of our product looks like is the the liquidity within crypto markets. You know, it's matured dramatically over the past few years and we've we've seen uh we've gone from a handful of exchanges with minimal volume

to a global network of liquidity providers, stable coins, uh major financial infrastructure players. Um and ultimately, you know, that means larger payments and it also means better FX rates. So, you know, you're now seeing that true 247 365 uh settlement being possible. Um, additionally, we're seeing a uh a fundamental shift in how businesses manage global cash flow, especially as they face, you know, slow, costly, and fragmented payment systems.

um traditional rails uh that uh certainly weren't built for realtime payments as the global economy sees it today. And I think from Ripple's perspective, you know, we started building blockchainbased enterprise settlement system rails back in 2016. And so we leveraged digital assets and blockchain technology at that point. So no other payments network were was doing that at the time. it was the first solution to address those inefficiencies in the block uh in the crossborder payments um side. So for Ripple, we don't see blockchain and crypto as an alternative rail. Um we see it as

complimentary to the fiat systems. Um and as Oscar spoke about, you look at decentralized technologies that are solving realworld uh challenges particularly in those non-G20 markets. So we all know sending US dollar to to euro is relatively easy. Of course, when you try and send a uh Peruvian soul into Indian rupees, it's not quite that easy. And so for Ripple, we've brought out a solution that utilizes crypto XRP as a as an example as a bridge that enables that instant settlement, you know, in these longtail type corridors. Um you know equally in November 23 we launched

our first licensed payment solution um which allows Ripple to offer a fully regulated version of the product. So that just provides that additional layer of peace of mind um for those institutions we're working with that require enterprisegrade compliance. Um and you know indeed we uh we've also incorporated RLUSD which is our own stable coin that we launched uh in 2024 which is now actively used by customers to enhance their cross crossber treasury payment movements. Um so yeah >> yeah quite a lot actually big news. So it's all started as a like technology, crypto, ICO, some tokens, but now we're

speaking about fully regulated financial business. Right. >> Exactly. >> Yeah. Amazing progress. Uh question to everyone. So speaking about all that, are we actually speaking about fixing inefficiencies or we redesigning the the entire system? So Jeffrey, what how do you see it like revolution or evolution? >> Well, I think it's revolution. Um and the reason I say that is because you know talking about payments because a big part of the discussion we've had thus far. If you believe the premise in the thesis that economic me economic um interactions um driving us towards instant payments. If you believe in the premise that instant payments are a

thing of the future then you have to reconsider what a traditional bank is going to look like. For instance, if you hold a lot of capital, um, you and you have a concentration risk in a particular industry and they start to move their money out, that creates a run. So, you have these issues where hot spots in particular industries can create bad days for other industries inside the bank. And so the bank has to respond if it's going to deal with instant payments in that they either have to hold more capital or they have to take um more lending against the against the Federal Reserve or the central banks that they actually engage with to cover that liquidity risk on a daily basis. Either way, they're either going to be faced with the decision of

lowering expectations on the earnings or creating higher risk in their investment portfolio. Either one is a reset of the considerations of how we evaluate and analyze a bank or a counterparty risk in that situation. So ultimately what we have done is tried to say we think this is really the future. We think that we should enable instant payments. We should be there to ensure that our customers are always solvent and always a able to accomplish their economic needs. And so we want to have the money available and that requires us to be fully liquid all the time. And so as a result we have a different economic proposition when it comes to our investors and to our own return. And so we are tech forward. We are innovative in our uh in our implementation of technology and the use of it and

operationally. And so as a result we've had the pleasure of being able to start from the ground up. It is a bigger challenge for the traditional banks and I think that leads to a bigger risk and a bigger question mark for all counterparties looking at this uh you know kind of financial landscape. It also is decoupling what is the traditional bank. Decoupling some of the payment deposit type activities from what would be the traditional lending activities. And when you start to discont uh disagregate those, you start to create new businesses and new ideas and innovation that actually can unlock lending in a better way as we've seen in some of the discussions prior. And so for us being able to focus on some key areas uh while simple and basic is

revolutionary to the model and we think that's really where this is going and where we think uh financial services as an industry really should consider uh its model and its proposition and we said as we talked about earlier the purpose of why we exist. Uh actually next is something very unique as you can see. Uh so and maybe you can give us a bit more detail details on your like operational model what is under the hood and maybe some piece of history behind behind next.

>> Sure. Um you know we we we talk about uh what's going on in the US. We've had a quite a theatrical or a drama-filled regulatory environment for the last couple of years and I have been a part of that in the sense that I was um I would say a part of one of the biggest debankings in the United States history where they wherein United States government uh utilize a decision policy-wise to uh discontinued the operations of a bank called Signature Bank. Signature Bank had built a 24 by7 blockchain payment solution that many people used in the industry to move money um very efficiently and effectively and uh out of that uh unfortunate event uh new ideas spawned and new creations were uh were were

dreamed up and that is the foundation for what we've created at next. So going through and thinking about okay how can we create two really main things one to ensure our clients do not have a run problem on the bank when it comes to their capital and secondly how do we ensure that we're not beholden to a regulatory body or a federal reserve body that decides when and when not we when or when not we are able to use our capital for the ex for the benefit of our clients and so that's why we really kind of chose a full reserve model moving banking into a maybe in some cases uh a backwards motion back to old historical uh constructs rather than new constructs and reflecting how money is

built at the core for uh its availability for our clients versus it being used for the bank's purposes. And so that construct and that rethinking of the model uh and thinking about how to uh protect yourself from regulatory change, regulatory decisions or or really even uh hotspots or issues that might be experienced in different parts of the the industrial landscape, our commercial landscape. And so we really have thought about this from a risk perspective to enable uh our clients and ensure that our balance sheet is pristine and available for them. And uh and I think uh one of the uh earlier presenters talked about being one the second safest bank in the world. We're

working towards becoming the first and uh we want to give them a run for their money uh and show some good competition, good friendly competition in that regard and be uh in many cases what we like to say a safe boring bank. >> Interesting. So just just maybe to to clarify so instead of traditional heavy banking core you are using blockchain technology inside >> at our core is blockchain. Our ledger is a blockchain which is immutable, auto reconciled. Uh it is available at all times and it is something that is transparent. And so as Gosskar put earlier, transparency is key. We show our reserves in real time on a transparency page just like uh you know others that might be in the industry are

doing and a reflection of our promise and our commitment to our clients to ensure that they know that we are solvent and available and their funds are always accessible. >> Amazing. Thank you. Thank you. Time is running. Unfortunately, we have to speed up. So, Oscar, um you are working with cards, right? So, because originally actually cards were invented for global instant payments, right? But, uh historically cards are running on traditional rails. So, you decided to rely fully on blockchain rails. So what was the main like idea behind what what what was the main trigger for you to rely on blockchain to run traditional uh payments uh cards?

>> U I'll try to blend in and and mix the previous question with this one. I would say first of all I believe is a complete transformation and revolution of the whole system and on our side we were very early to start developing on blockchain. Actually we started in 2014 way before even Binance existed there was no stable coin and uh I think at the time we were simply solving needs of our customers uh maybe because uh of the specific region of the world where we're working and uh when you need to do large international money movements then the banking rails were simply not fit to the

use case right Um a and I would like to take the opportunity to respectfully say that uh based on the conversation we've been having I think it's very important and you guys have here a very good panel because every technology has different layers right you have the plumbing you have the operating system and then you have let's say the apps >> you said plumbing >> yes plumbing because I would say I would say this way look at the internet the plumbing I will call the fiber optic cable that you know you you run under the streets right and then you have the operating system and I would add the plumbing you know the Swisscoms and

AT&Ts etc etc then you have the operating systems right uh which is HTTP or you know whatever and then you have the apps on top which are the websites and stuff like that and you have a very good panel here because you know Ripple is I would say part of the plumbing okay it's infrastructure Then you have banks which are obviously let's say I would say the equivalent of the Swiss comes software but then you need the usability you need the application for the users and I think that at unblock what we're trying to do and if you take any other I would say industry uh listen we all need electricity nobody tries to build a

electric you know plant an electricity generator at home so banks maybe should not try to do the whole thing by themselves, right? And I think what Unblock is trying to bring and the solution we're creating is exactly so every layer can focus on its specific, let's just say, expertise. Ripple should keep doing what they do because they're the best at that. They're billiondoll company. They started many years ago. next should keep focusing on you know all the complexity of operating a regulated bank in the US with it's already a lot of uh things to worry about and we are trying to be that

solution that you can rely on because we will bring uh compliance we will bring regulatory framework but most importantly we bring that last mile we bring uh the solution So everyday moms and dads can start using blockchain technology, can start using digital me payments, instant settlement, crossber payments, everything uh through one single platform, one single solution that will integrate into your current uh infrastructure. So you don't have to build it yourself because time to market if there's a time in history that time to market has been important it's

probably right now >> question so actually uh that's very good that you mentioned this last mile so we have reple building the network we have banks like Nex who are providing settlements for institutions we have last mile providers like you but question will merchants and end users care about the technology if it will be faster cheaper more efficient or does not really matter. >> They care already. Uh if at least we look at what's happening to us and we've been growing thousands of percents per year, uh it's just because the use case is so efficient, right? And and if we look at the payment side of my company, let's say when we acquire payments,

okay, we have more and more uh merchants websites, people willing to have stable coin payments on their website because you know it's instant and let's just say it's cheaper, right? And they also have instant access to those funds. You don't have to wait the next day to be able to receive those funds to your bank account which actually uh we're gonna very soon be able to also offer that through the regular let's just say uh rails and even with the card uh uh plat the card technology that we're providing. So yes, I think that uh when you accelerate the process, you give instant access to

money and it's cheaper and it's faster and there's no more let's just say borders but keeping compliance, you know, cuz we all have to be compliant. We all do AML and we all make sure that, you know, uh money is safe. Uh then why would someone use something different? >> Okay. Yeah, sounds sounds good. So we are unfortunately running out of time. Uh let's maybe try to be very like straight to the point. Uh could you please complete one sentence? Money will be fully liberated when what what should happen to fully liberate money? That's a question to

>> for me when you don't even think about it. >> Perfect. Yeah. And after that you're saying that they will care. Merchants they will not care because they will not even think about it. It will be just working right. >> Who wakes up thinking about if their uh 5G network is going to work today? >> You're right. Yes. Yeah. >> Daniel. Um I think for us it's you know payments leveraging both the crypto and blockchain to just deliver fast and efficient crossber payment solutions for for businesses, banks, financial institutions.

>> Yeah, >> thank you Jeffrey. >> It's simply my clients never miss an opportunity due to payment friction. >> And by the way um I'm happy to become your client. We just recently signed partnership. We will officially announce it later today. But I'm happy to be first partner in Europe, right? >> Very excited. Thank you. >> Thank you. And uh yeah um just to conclude actually something massive is happening. You see today on stage we had some big names even like Swift speaking about uh building WhatsApp right for for um uh settlements between institutions.

Hi Nick, thank you for for your speech today. Uh we have big protocols uh working on on fixing the issue of liberating money, right? We have unique banks who are making really big steps forwards. We have uh guys who are taking care of the last mile. So to me it seems like we are already there. So and I don't think that's revolution. I think it's evolution still. So but we're doing some good progress. So thank you guys. Um, >> thank you.