Governance Models for Global Stablecoins and Digital Currency

Global stablecoins such as Centre Consortium’s USDC and Libra Associations new family of stablecoins are on the rise, giving way to coordinated regulatory responses for these innovative new forms of digital money and payment systems. At the same time, governments and large financial industry actors are examining what digital currencies backed by central bank money might bring in terms of new opportunities and risks.

All of this is increasing the attention on governance models. How should global stablecoins be governed? How can standards be established that work across leading stablecoin arrangements, but also contemplate and support government-sponsored and led digital currency projects? What’s the role of the public sector vs. the private sector?

And, how can we learn from the lessons of the past thirty years in the development of other internet standards, open source software and decentralized internet infrastructure? As the internet collides with money and the financial system, governance models are starting to take centre stage.

Jeremy Allaire: [00:17:23] Hello and welcome to the Money Movement Show, where we explore the issues and ideas driving this brave new world of digital currency and blockchains global stablecoins such as Centre Consortiums, U.S. dollar coin Libra associations, new family of Stablecoins are on the rise, giving way to coordinated regulatory responses for these innovative new forms of digital money and payment systems. At the same time, governments and large financial industry actors are examining what digital currencies backed by central bank money might bring in terms of new opportunities and risks. All of this increasing is increasing the attention on governance models. How should global stablecoins be governed? How can standards be established that work across these leading stablecoins arrangements but also contemplate and support government sponsored and led digital currency projects? What's the role of the public sector versus the private sector? Well, all of these are questions that we're thinking about in this realm of governance. And in particular, how can we learn from the lessons of the past 30 years in the development of Internet standards, open source software, decentralized Internet infrastructure, all building blocks that digital currency is taking advantage of and that these new kinds of assistance and schemes are building on as well. And so as the Internet collides with money and the financial system, governance models are really starting to take center stage. So to discuss all of these issues and more. I'm really thrilled to welcome our guests this week. First to Sheila Warren, who's head of Blockchain and data policy and a member of the Executive Committee for the World Economic Forum, where she has spearheaded the formation of a global consortium for digital currency governance and Dante Disparte, the vice chairman and head of Policy and Communications for Libra Association, an emerging global stablecoins arrangement with broad industry backing, where I'm also here as Circle CEO. I'm also here as co-founder and director of Centre Consortium, which is an emerging governance framework for a global stablecoins, including the USDC standard. And we are welcoming Sheila and Danté to join us right now. Hey, Dante. [00:19:52][149.4]

Dante Disparte: [00:19:54] Hey, Jeremy. Good to see you. [00:19:55][1.1]

Jeremy Allaire: [00:19:56] Good to see you as well. And hello, Sheila. [00:19:59][3.7]

Sheila Warren: [00:20:00] Hi there. [00:20:01][0.3]

Jeremy Allaire: [00:20:02] Excellent. Awesome to have you guys on today. [00:20:04][2.0]

Sheila Warren: [00:20:05] Thanks for having us. [00:20:06][0.4]

Jeremy Allaire: [00:20:06] Yeah. Absolutely. Why do we start with something really basic? I think for for each of you, Sheila, maybe you could start. What is this new global consortium for the governance of digital currency that that you have helped to spearhead of the World Economic Forum? Could you maybe just start just talk a little bit about that that agenda and what you're trying to accomplish? [00:20:27][21.1]

Sheila Warren: [00:20:28] Sure. My pleasure. So as many know, we issued a CBDC policymaker's toolkit at Davos this past January and that reflected 18 months of community building CBDC space with central bank technologists. And was the response to a demand signal from them that will create a toolkit for policymakers to understand the tradeoffs and considerations in the issues and the CDBC. So the Digital Currency Governance Consortium is the next phase of that work, if you will. Our idea was always to start with CBDCs. They were more palatable, shall we say, to the Davos crew, our community. We thought there was so much innovation happening there already and there was need of a more objective guide to that particular kind of offering. So it deals with a DCGC, as we call it, Digital Currency Governance Consortium. It's aiming to do the same thing with Stablecoins. So key things to note. There will be no coin issuance. This is not a consortium in the way that we think about it. All right. We association or center or others that exist in the space, we are simply here to look at policy aspects specifically of governance aspects around the issue into digital currency stablecoins. What we're trying to do is identify where are there themes, where there are gaps and where are there tradeoffs that we can help elucidate using kind of the forum's history of objectivity, neutrality to articulate what those distinctions might look like. [00:21:52][84.4]

Jeremy Allaire: [00:21:54] It's awesome. And I think an extremely important project, obviously. And thank you for that for that introduction. Dante maybe similar the the in a nutshell, what is the Libra Association? What role does it play in governance around Libra and just a quick description there for folks. [00:22:14][20.5]

Dante Disparte: [00:22:14] So the Libra Association is now a year old effort that is also consortium driven effort today comprised of 27 member organizations that are building a Blockchain based payment system and the supporting Stablecoins infrastructure to be able to create the infrastructure necessary for digital money to exist, but also to facilitate lower cost payments at global scale. [00:22:39][24.4]

Jeremy Allaire: [00:22:40] Excellent. That's awesome. And I'll just sort of briefly also share. So I'm also a director of Center Consortium, Center Consortium has been around for now a couple of years, and Circle & Coinbase both were members of that and it governs the U.S. dollar coin standard. And there's a, you know, an ecosystem it now a few hundred companies that are involved in supporting and implementing that in different ways. And I think we're also thinking about, OK. Now, as this moves into the realm of government oversight, as this moves into the realm of major existing financial industry, stakeholders, figure out what's their role in this. This isn't just crypto startups anymore. This is moving into a very different kind of tier. I think all of us are kind of collectively thinking about what are those? There's global governance models and how are those going to scale to support this opportunity. I guess, um, I think governance as a concept means a lot of different things to a lot of different people. You know, sometimes governance people might think that literally means like governments, like the government. What's the government going to do? You know, obviously, there's this long history of governance in technology on the Internet, governance standards, governance of, you know, of financial networks. What is with this digital currency, global digital currency? What is governance? What is good governance? I mean, what is that going to look like? [00:24:10][89.5]

Sheila Warren: [00:24:13] I'm happy to take a stab at that. Yeah. Dante and I have a pact to not talk over each other It doesn't make it promise. I'll keep it, but I'm going to try. You know, for me, I think for us, the forum, rather, I should say governance is a couple of different things. So, one, it's kind of the enabling infrastructure that surrounds any particular issue. So it is the regulatory framework. It is to some extent, government policies. You know, it is almost add cultural understanding, the money, what money is. All those kinds of things we think make up the broader governance, environment, enabling environment. But it's also the rules of a specific game. So any particular issuance is going to have really pick consorts anywhere where it might be is going to have its own rules, its own, its own operating model. And all of that makes up the governance as well as we kind of think about it is almost internal governance and external governance. And both those things need to operate in consonance. And part of what's really interesting is I think in the early, early days, like the Bitcoin, the Bitcoin only kinds of days, there was this reaction to the external governance, if you will. It was very, very reactive. Right. And so the internal governance was a key area of focus. But that interaction between these two different layers wasn't something that was given a tremendous amount of attention. It was obvious, I thought. Right. So what we're trying to do is draw those connections and the work that we're doing. But I think all of these things are really important. [00:25:38][85.2]

Dante Disparte: [00:25:39] Yeah. And if I could just build on that. I think the you know, all too often big technology efforts, including the early, early movement in digital currency, tended to be projects that would ask for forgiveness rather than permission. And then we've learned the hard way over the last eleven years that it's a very, very complicated model. And it often then means that, you know, these innovations are or are framed in opposition to existing systems. And especially when you're talking about money and finance, being an opposition to a regulatory regime or a compliance regime is one not great for longevity. And two, it's not really great in the public interest. We have to remember that a lot of these external factors, that much of the early wave of the digital currency movement was railing against or candidly might have been even designed to avoid altogether. A lot of those regimes around the world there are established in response to whether it's market failures and crashes and the rest as a response and a reflection of public interest. So I do think it's vitally important that the governance movement today and I'm encouraged by the work that she's leading at the West to help try to build a consortium here, is that the more we can harmonize these interests, the more we will learn that there's actually not a ton of conflict between a stablecoins project that is trying to get regulated and what is ultimately the type of public interest that we now see. And in this type of crisis, you could see exact, very big, bright spot areas where where those interests are now starting to converge. Whether it's a government backed digital currency or private sector initiatives, you're starting to see a lot of alignment here. [00:27:15][95.3]

Jeremy Allaire: [00:27:16] I when I think about this a little bit, it's sort of like and some of what you shared Sheila also maybe think of this as sort of these layers of governance. Right. You've got like, you know, the Internet Engineering Task Force governs TCPIP. Right. OK, well, who's that? It's the international organization. It's a bunch IP, a bunch of academics. It's sort of out there. And then, you know, you have these other things like, OK, you have a blockchain. It's like an operating system and it's an open source project and. Well, how is that governed? Well, it's sort of informally there's a community of people and sort of people get kind of power to approve pull requests. And, you know, and then there's sort of, you know, the the you know, the governance of who validates transactions. And then there's a governance of protocol on top of it. And then there's a governance of what laws apply to the use of that protocol. And then there's the government. It's just layers and layers of governance. And I think a lot of times when people think about digital currency or global digital currency, I think they want to think of it as like just, you know, this one vertically integrated stack that is, you know, that you can govern. But what we're all we're doing is we're we're we're building on all of these, you know, very diverse systems of governance that we can compound value from. And I think it's I think now these are the kinds of work that the Web is doing and consortium and others are doing is is is really trying to bring that all the way up to this world leader stage and bring that all the way up to, you know, like how do we as a planet organize ourselves around this particular technical breakthrough? And so it's it's interesting. Maybe, you know, given the focus on sort of global stablecoins or sort of know stablecoins that have really, you know, really broad reach. There's obviously the this is a principally a private sector phenomenon today. You know, when you when you Sheila when you think about that interplay between, you know, public policy, the financial market, infrastructure, slash financial industry and then these new arrangements that are out there, you know, what are the you know, what would you hope to see out of the governance work that that you're doing to address the rise of Stablecoins? [00:29:36][139.5]

Sheila Warren: [00:29:37] Yeah. So, you know, we have the luxury of not being wedded to any particular modality or any particular offering and particular issuance. And so what we're hoping to surface are the tensions and tradeoffs which we think are inevitable. We do think. I think that there is room for different kinds of CDBC issuances, different kinds of stablecoins issuances with different differently with a different basket, you know, behind them in crypto, not pure crypto as well. And I think that there is a role for all of these. I think there is this kind of sixth grade social studies notion that we kind of start with CDBC and then we graduate, we become more enlightened and we graduate, says Stablecoins. Then we graduate to crypto. And I've just said, that doesn't make sense? Those things are different offerings for different purposes. And so I think I think to Dante's point, we are seeing some convergence in, I would almost say like the forced ranking of priorities, you know. But the reactions to those are different. Certainly, if you are Status or call them out, whatever it is, there's a lot of other bodies as well. S.A.C., if you're a regulator of certain kind, you have a very particular point of view, obviously. And if you are a Bitcoin maximalist you know, which is not the puzzle, those opposites, but to some extent they kind of are. We can do that here. You know, a very different point of view. But that's in part because you're focusing on a very different problem and you're focusing on your perceptions of that problem. And part of what I'm I'm heartened to see is academics turning to articulation of the problem states in addition to kind of the design questions that come up. And we're hoping that as we see more and more of that, we're going to be able to really ground in a common understanding of what the different problems are and what types of offerings are of most value and where those where that value can differ. So financial inclusion is a great example. Remittances is a great example. Intermitent settlement is a great example. You know, they have different requirements. You think you could think of them as different use cases which date to a large extent are. And how do we articulate the nuance there in a way that can translate into governance and into an underlying governance framework that I think is the real challenge and where we feel we can play a really strong role because, again, we don't have any of those Chiclet use cases as a paramount importance. And we're not trying to in any way assert that. Right. That one of them is the priority over another. [00:32:01][143.7]

Dante Disparte: [00:32:03] And if I can add to that as well. Jeremy, you know, to me, this entire asset class is not as much a breakthrough in technology, but a breakthrough in organizing principles and therefore governance. I mean, not since the earliest, earliest days of the Internet and the era of tech titans have we seen a space so desperately in need of regulatory clarity and alignment with all of these external interests for you to continue to blossom and thrive. I mean, oftentimes people dismiss Blockchains efforts in crypto efforts as a race to the bottom and that a lot of these projects are looking for regulatory havens in different locations. This is not about arbitrage if we get it right. It's about empowerment. And I think she would hit on a very important point about, you know, in the regulatory domain. They talk about same risks, same rules, technology, neutrality. It tends to be difficult to put into practice. But from a practical point of view, when you describe then the asset to the tokenized asset or the digital currency. I also think it's important to add another layer to that same risk, same rules model, which is regulate the economic behavior of the digital asset. Don't create a all model. We're all crypto is bad. Not all stablecoins are created equal. Not all CBDCs are created equal. You know, Hank Paulson wrote a great piece recently that said, you know, a digital version of a currency is nothing less than the sum of all the parts. And so if all the parts are also bad, a digital twin will also be bad. And so the governance breakthrough here will do more for the mainstreaming and the mass adoption and all the good that come of this space, then the technological breakthroughs. [00:33:40][97.3]

Jeremy Allaire: [00:33:41] Yeah, yeah. I mean, I see that. And this is like that. What is standing in the way? I mean, there are there are technological things that need to happen. There's usability, things that need to happen, scalability. Things need to happen. There's various things that are moving along. As a technologist, that's all. Those are solvable problems. And I can see that right on the horizon. It's these government governance issues that are going to allow a person, a business, a government to say, yes, this is the future of the international monetary system, the financial system, and to have the rules of the road and. And no risk or manage. [00:34:14][33.0]

Sheila Warren: [00:34:15] So, yeah, I think that's exactly right. It's a tremendous opportunity. And rather than just digitizing our existing system with all of its flaws that currently exist, with all of the dynamics of power and the balance that exists there or imbalance, I should say, more accurately, at the exclusion that is inherent to our current system, we would chance to fix of that. And we can we think that using governance and then we can apply whatever technological layer it's going to be most benefit to that. I should note also just that connectedness that we are technol, we are technically agnostic. So are somebody supposed to make us talk, you know, does contain discussion of where Blockchains is a value and where it might be a less value. And we certainly think that there are and will be explorations of the CDBC that have nothing to do with the Blockchains that really just leverage more ordinary technologies. And the same thing may wind up being true for certain stablecoins assurances as well. I think that we need to be examining very thoughtfully and holistically know where a technical solution is actually adding value. And that value is coming from the new governance model. Yeah. [00:35:24][68.8]

Dante Disparte: [00:35:24] You know, if I can add again in another sort of general philosophical point here, the you know, in my mind, if we accept the narrative that finance has reached a point of diminishing returns, i.e. a world with one point seven billion people unbanked, one point three billion under banked, the inability for you and I to send value to each other instantaneously, as easily as we would send a message or a video or make a phone call, that that perhaps if that is in fact the case, that we can no longer extend the perimeter of the formal economy short of big scale innovation, then these types of innovations aren't necessarily competing with the existing financial system, but perhaps completing it as one sort of thesis. And we do want to encourage a lot of innovation, a lot of vigorous competition around all of the edges of these ideas. The other piece of the puzzle is, is the external environment, is the rulemaking environment. And so the more bodies like the World Economic Forum, the Financial Stability Board and a number of other groups that are starting to coalesce, and on top of which, you then have something like 70 percent of the world's central banks thinking about BDC or experimenting with it. To me, that's a very encouraging environment. We need to move. This is not something that will, you know, is going to get better with time. The condition of being excluded from the financial system. And it's a source of an enormous amount of risk on the planet in the pandemic has only just revealed that it's fortress nations, just as much as developing in emerging countries, are being plagued by very deep sources of financial exclusion. And unless people come up with better fixes faster, these issues aren't going away. [00:37:02][97.3]

Jeremy Allaire: [00:37:02] Yeah, I see that. It's these are it's it's sort of kind of perfect timing on a lot of fronts from that. I wonder, you know, there's sort of these lessons that we draw from other phases of innovation in the Internet. That's a common theme. There's there's obviously lessons we can draw from, you know, you know, electronic money itself, like the birth of messaging standards like SWIFT, the birth of card associations, like the what we think of as electronic money today, whether it's sort of fractional reserve commercial bank money or or or central bank money like all of these, you know, led ended up, you know, kind of happening at scale when broad stakeholders got together to agree upon standards to make sure that those standards and how they operate work within the law and that governance be comfortable with them. And, you know, this is sort of, as you said, don't like this is the next logical stage of of the international financial system. It has the potential to do a lot more and be more inclusive and more efficient and open up, you know, programmability and all this super exciting stuff. But fundamentally, the thing that gets these things to scale is, is layering, layering, layering, governance. I wonder, you know, what other lessons we can learn from the growth of the Internet itself and Internet standards. And, you know, I think I remember well, you know, when you know, the early stages of commercialization of the Internet and, you know, you had regulators in every country in the world, some of whom controlled know, national monopolies that controlled, say, the communication system of a given country, some of which had, you know, actual monopolies, you know, but, you know, fundamentally, like there was a set of governance that emerged around technical standards that was mostly driven by computer scientists, academics, innovators, and then industry sort of set out, you know, at this stuff is pretty good. It's good enough we're going to start connecting to it. And then, you know, the technology raced way ahead of what the regulatory regimes ever had like, you know, it used to be if you wanted to, like, broadcast a radio show in Italy, like you needed permission from a regulator to do that. But I can do that. I can do that right this minute. I can broadcast a radio show in Italy uncensored. And and so I wonder what lessons there are to learn. And whether. Is there a disconnect between what I'll just call like the the community led opensource grassroots movement of the Internet, which is, you know, has built all this stuff and the expectation that governments have about. No, this stuff is stuff that we control. And and, you know, how do we reconcile that? Because it seems like it worked in the world of of of information, knowledge, communications, content to be a little bit more open. And I wonder if it would work in the financial system as well or if or if the instincts of of governors to to want to control this are too much at odds with that. [00:40:26][204.0]

Sheila Warren: [00:40:28] You know, part of the challenge, I think, in this space is that you kind of had the app and the technology happened at the same time. So. So. But at the same time, like, we are moving to a place where you can divorce those two things. But a lot of people don't understand that yet. Still still don't really get that. I remember when I started the forum at the twenty eighteen, Davos started Davos. My entire soundbite was like bitcoin and blockchains not the same thing bitcoin and blockchains the same thing over and over and over parroting it because no one people don't understand that. And so we've moved past that. But there's still this, there's still a general lack of understanding of the distinction between the technical element and the financial systems element. And this is recreating something that has a tremendous amount of power and inertia behind it. You're going all the way back to kind of Bretton Woods and you think about creating a new financial order, a new financial system. The thing I think that's not so there's a lot in there to unpack. I think that's not talked about a lot. And that's how we thought about systemic risk. And so I think it's really interesting. It's to Dante's earlier point is that we've kind of defined in the financial system systemic risk. We just kind of carved out a whole group of people and said, well, you know, yes, they're very vulnerable, but they're just outside of our system. Therefore, our system is really not all that risky. Or we can kind of allocate the risk in a way that kind of neutralizes a lot of it. And then this whole thing over here, we're going to ignore. And part of what I think the pandemic. I hope it has really highlighted is that no system there is no outsider to the system. You have to look at the entirety of the system and you have to accommodate and count for that systemic risk that is coming from outside of what you think of as your class system. So I actually took the Internet early days at a very good job without necessarily making this a highlight. But thinking about that and being very open to a model that would accommodate more holistic notions of systemic risk. And that's something I don't think we talk about enough in our sector. We all think about it without maybe implicitly or otherwise. We don't really talk about it as much. So I started doing a lot more thinking about the early days of the Internet and how risk was accommodated and how we could think about that in the new financial system that we're all interested in seeing be built or in your cases, actually literally building that well. [00:42:46][138.5]

Dante Disparte: [00:42:47] And the key is optionality. Right. So so if as it happens, risk is my cup of tea. I serve on FEMA's National Advisory Council. Lose sleep over risk every day. All the time. And when you think about it, the one area of literally the entire global economy that performed well in the middle of a pandemic, the pandemic that sent the entire world on a work from home excursion. Those so fortunate to have the ability to work from home. And it withstood the load, right. It withstood the load of entire economies being permanently working from home. And that kind of bandwidth capability and that resilience, inherent resilience in the design. Our financial systems don't enjoy that. Right. So when when the federal government had to respond to this crisis with an all about five point five trillion dollars of of intervention to save the economy, effectively an example of privatizing gain and socializing losses, the very type of pattern we saw in 2008. It then begs very, very deep questions about whether or not things like financial inclusion are basic human rights and simply put, whether or not ubiquitous near universal access to the Internet should be simply a part of the digital commons that we all enjoy. If we're all going to depend on it in the middle of a fire drill, which is the COVID-19 event, then we should also ensure that on those rails could ride the transfer of value, the transfer of information, the transfer of assets, the transfer of title, identity assurance, authentication, you name it today. None of those things are possible at scale and it's an indictment of us as a planet and as a modern economy. I'm speaking now of the United States that in order to exercise your civic duty and go vote, you have to go violate the social distancing requirements and wait the physical line to exercise your civic duty. That should be something that motivates all of us, whether it's Blockchains or some other standard, to make sure that the very core principles of functioning in a modern system and in the modern economy can leverage technology as a difference maker. And for all the areas that broke very rapidly with the onset of the pandemic. Value identity voting, these types of basic civic engagements could use a little bit of digitization. [00:45:00][133.0]

Jeremy Allaire: [00:45:01] Yeah, I love I love your thinking there, Dante. Right on, I think. Yeah. I think what's interesting is, is, you know, there's this sort of Top-Down view like, you know, should. Should. Should the national government have you know, in China there's like a blockchains is a major national initiative. It's got, you know, sponsorship up and down the chain. You know, no pun intended. It's you know, it's it's a it's a big. There's nothing like that going on in most Western countries, certainly in the United States, which I think it's unfortunate. But but there is a lot of bottom up innovation happening, right? There are so many interesting engineers, start ups projects, some sponsored by big tech companies like like Facebook. But lots of them that are open source, that are building the plumbing for a public infrastructure where you can do secure identity and that, you know, nation states could even depend on for voting. And so there is so much that is there. And I feel like that the collective commons of of of intellectual property creation that the Internet has is working. And it may not work on the speed that we want. I think what we're seeing out of China a little bit is, you know, leveraging that IP commons and all the energy around it with a big boost of of industrial policy as well. [00:46:21][80.1]

Sheila Warren: [00:46:21] And so I think that that could be, you know, hard to answer. [00:46:24][2.8]

Dante Disparte: [00:46:25] Well, and I'm sure all of us are sorry, Sheila. That's the only time I won't do it again, I promise. [00:46:30][5.6]

Jeremy Allaire: [00:46:32] I'm sure of it. All right. [00:46:34][1.9]

Dante Disparte: [00:46:35] We're all tracking with great interest. You know, the way Christian Karlo, you know, likens this as a digital space race, sort of an equivalent. I'm not in the vein of a Zero-Sum kind of person. I don't think we have to win at anybody's expense. And I think any one of these objects would benefit enormously from a very vibrant and innovative, thriving private sector. And what you see here, and this is why, again, back to the great work that the Digital Currency Governance Consortium is trying to do. And the West is such a uniquely placed entity to build those bridges, is that you do want. And I think all of us would want to have the public sector have oversight over monetary policy and the creation of money. If a stablecoins is nothing better than sort of if imitation is the sincerest form of flattery, then a good U.S. dollar back Stablecoins is trying to mirror the underlying economic soundness and preconditions of the US dollar. But the creation of the dollar and the management of public policy and monetary sovereignty is public sector activity. But the rails on how that type of value are delivered should and ought to include anything from a swift transfer to an AC eight to an FTE, to an OP, you know, an option based on Blockchains Stablecoins. It's it's a better, more resilient system than one that is only riding on one or two cylinders from from an economic value point of view. So it's not zero sum. I want you to succeed and I want everybody else in the sector to have a chance at success right now. That success is being hindered by a lot of red tape and a lot of fear and a lot of apprehension in the public sector that these types of risks or projects become systemic or they destabilize the system. And a lot of that sort of early branding problem the space had is is kind of lingering. With all of us. But I think there's a new era here where where we can get get it right and also get to innovate at scale this and get some the public by the dimensioned year. [00:48:28][112.7]

Jeremy Allaire: [00:48:28] Sheila. Yeah. Yeah. Fundamental to the platform. Yeah. Maybe you could talk a little bit about. [00:48:33][5.4]

Sheila Warren: [00:48:34] Absolutely everything we do as multistakeholder and its consumption. So it's about bringing together public private sector actors. And the third sector as well to really think about civil society actors, academics and others who are really focused, possibly more narrowly, but experts in particular needs articulated by certain communities. I think another thing we try to do is think very hard about geographic diversity. So a lot of the conversation needs to and I know that book, you're good about this, but you're not. Think about where the innovation is really happening. And that's in part where the innovation is able to happen. There is less incentive in really established economies. There is more fear. There is there's less there's more incumbent power. Right. So a lot of the innovation is happening in frontier economies or smaller economies. And we're learning a lot from what's happening there. When I first started the at the forum, you know, it was really, you know, I had to really make the case that we should be focusing not just on the sort of typical halls of power, but looking at a lot of the island nations. USDC looking at what Cambodia was doing. Looking at some of the work that's happening in Africa all over the continent, by the way. Right. Not just in Kenya and not just in what they were doing, kind of coming down in the dirt when the men are gone or Nigeria really looking across some of these economies to see what are the opportunities that we may be in over the Western mindset, blind to and bringing those things together. So our CBDC project actually started off with a goal. The only goal was community building. It was to say we know which banks are talking to each other, which aren't. It's a huge miss. And we have the convening power and ability to say, you need to listen to these guys over here or these people over here and do some education about what is actually possible with this technology. In that case, it was it was really starting off to focus on Blockchains, but at moving into an examination, more of CBCD offerings. Now to the point about the kind of one ring to rule them all. You know, we are fervently opposed to that. That view, I don't think, makes any sense. It doesn't make any sense to click with someone if you even thought about it, if there was one CBCD. One more point, you know. And one crypto, there'd still be three, you know, so they have very different needs. But it just doesn't make any sense because as you know, Dante, depending on what you kind of choose to put in your basket or what you just backed by, you're you're basically adopting to some extent a certain set of values, you know? And I think that we have to be very mindful of what those values are, not just from a from a literal economic power, but really from a signaling perspective as well. I think that's also really important. And so while I agree with you that it's it's really important to think about stability, particularly in the environment that we're in now. Now more than maybe ever as we're getting economic fissures and the challenges that we haven't really seen before. Well, at least in our lifetimes, I think that it's really important to think about that as well. And to think about one thing we're interested in doing is thinking about almost like ethnographic type studies of money and how the cultural values around money translate into policy and how making that more visible can enable us to kind of almost cherry pick some of those values and norms and put them into other issuances without having to adopt an unstable currency. So things like this, I think, are really quite fruitful and interesting types. [00:51:50][196.5]

Jeremy Allaire: [00:51:52] Very much. It makes me think about and I know this is a key consideration with Libra as well, which is like it's very easy to get caught up in the like, what is the G7 think and what's, you know, what's the Fed or the ECB or whatever. And then, you know, it's a big deal, the FSB and the G20, and they're going to have global stablecoins, you know, regulatory frameworks. And I think that's all very positive. We're all involved in contributing and that sets a standard. But like the G20 is not the world. The G20 is the G20. And, you know, when you think about the benefits of this technology, they go way outside the G20. And what are we really accomplishing? Are we are we are we building a new international, you know, an Internet of money that is truly global, that is, you know, the benefits and the frameworks, you know, can be taken advantage of by everyone, everywhere. Or are we, you know, trying to stovepipe and recreate the rules set that runs the current monetary system that's largely dominated by the biggest economies? And, you know, what is the balance there? How do we ensure that, you know, in particular innovations like global stablecoins where they have the reach of the Internet and, you know, people can participate in different ways? You know, how do we ensure that that that happens, that we don't just make this a, you know, a club of the G20? [00:53:14][82.4]

Dante Disparte: [00:53:16] Well Jeremy, I mean, you hit the nail on the head, right? That if to me, candidly, I think a lot of these innovations won't be as meaningful as they could be if all we do is replicate the existing system. Right. And if you were born and candidly, the existing system has more to do with your zip code or the country you were born in than anything else. And even domestically, a payment across two banking platforms that are not conversant introduces death by a thousand cuts fees. And we're laboring under slow, analog, painful examples. I mean, ask the millions of Americans who were waiting for an analog check to arrive, you know, who were already living check to check. 40 percent of the country can't survive a four or five minute setback. So so I think we we would fail in the effort if the effort didn't absolutely extend or at least from a technological point of view, remove the cost and the barriers of extending the perimeter of the formal economy to the billions were on the margin of it. Otherwise, it's not real long term value added. And we have to figure out how to lay down infrastructure, not unlike the Internet, that pre Internet. It would have been very hard to provide for connectivity that was decoupled from fixed line infrastructure or from physical infrastructure all back to the country of birth and the zip code. Here are the same challenges hold true for financial exclusion. And if we want to functionally extend the perimeter, we have to make a mobile device that's Internet ready, a regulated payment endpoint. And I'm I'm absolutely like Sheila Warren another's completely technology agnostic as to how this is done. But what I'm uncompromising about is that it is done because the stakes are far too high and there are far too many people on the margins for no good reason other than the thought of one brown person or or a person in sub-Saharan Africa makes one errant payment. Entire continent must pay. We could do better than that as a planet. And I agree with you. We simply can't, you know, lobby across the Atlantic to get it right. At one level, we have to figure out how to anchor this in a multistakeholder environment. [00:55:23][127.4]

Jeremy Allaire: [00:55:24] It's getting. Getting policymakers to think bigger, think bigger about what this new like a global digital economy really think bigger about what that can be. Which I know both of you are doing. Yeah. Which is which is awesome. Maybe. Maybe we can try and end on a. I hope I opt optimistic note, which is, you know, you know, there is this moment in time. There is this focus on global governance. There is technological innovation. There's all this stuff, you know. What do you think? What does this look like in two or three years? What does this look like in five years? I'd love to hear both of you share your thoughts on that, Sheila. [00:56:07][43.5]

Sheila Warren: [00:56:09] Yeah, I well, I think it's it's quite different to the three versus five, so into the three. I think everyone is still reacting to China saying it really bluntly. I think that that's going to really occupy the next 18 months or so because we're we're the human being nature to just kind of react. Right. And what we're going to with what we expect to see coming out of China is what we actually do ultimately. See, I think there's going to be a lot of needed to some extent, but also perhaps overblown response to that. However, I think that will dissipate. I think that, you know, relatively quickly, I think people will kind of accommodate whatever they see and figure out exactly how to respond to it or carve out any space or whatever it might look like. And then we'll shift into something that I really hope is truly more global and inclusive in nature. So the five year market kind of focused more there. I think that we I think we are going to see a lot more access by people who are not currently included in the formal economy into the formal economy with on ramps and off ramps to trip more traditional systems. I don't think those are going to go away, I think, to kind of Dantes earlier point. But I do think we're gonna see more entry and exit, you know, in and out of those systems where it is Prickett to be in those systems versus being adjacent to those systems in a way that is complementary to those systems and accommodates the rally, the systems. Do I see a massive fight club type? Burn it all down. You know, Mr. Robot Revolution in Money. I mean, I got those. I don't see that. Certainly not in five years. And I don't even know that that is necessarily necessary. However, I do hope that certain aspects of our current system that really don't serve anyone well, they serve very, very narrow set of players extremely well, and they really don't serve anybody else particularly well. I hope that we will be able to loosen the stranglehold that certain actors have on our economic monitoring financial systems and more equitably allocate the risk and reward, as opposed to just reserving all the reward for a handful and blowing the risk down to places where we like to pretend that we can we can treat it as outside of our system or invisible to us. That's my hope and I feel very optimistic about that in a five year timeframe. [00:58:32][142.8]

Dante Disparte: [00:58:35] Well, look, for my part, for all for all the doom and gloom and the talk of risk and resilience, I'm actually an eternal optimist and I think between zero and three years from today. I think one will have made it clear that the STABLECOINS and the digital currency movement had less to do with reinventing money and more to do with reinventing how people interact with the exchange of value, number one. And I think you'll start to see real big movement, for example, across key remittance corridors around the world that are stranded at these seven percent global average, if not higher. You'll start to see very vigorous competition at the edge of trying to enable faster cross-border peer to peer payments. And that to the extent that can happen in a three to five year run, I think it's a very, very meaningful contribution. And then in the end, the three to five and then five onwards, I do think you'll start to see a lot of ubiquity of this. I mean, there is a movement afoot that is that one. It's a generation different than our own, I presume, born with instant gratification, born with trust in technology that is going to be much more willing to accept that value can also exist in a nonphysical form and transferred in a nonphysical form for everything as simple as paying a micropayment for liking a medium article, whereas Complex is making a commercial transaction. I think the movement of money and the movement of value is what is being reinvented around these concepts that we've discussed today, and much less so the reinvention of money itself. And so I'm I'm very optimistic that a lot of good will come in the future. [01:00:14][99.1]

[01:00:14] Circle The Money Movement has legs. Yeah, exactly. Yeah. This has been awesome, you guys. I really, really enjoy enjoyed the conversation. A lot of. You have Far-Reaching stuff and obviously looking forward to continuing to work with you guys and CDC, a lot of this stuff through over the next couple of years. [01:00:36][22.3]

[01:00:38] So you're saying yes. Thank you, Jeremy. Thank you. Thanks for joining today. Thanks. Thanks. [01:00:43][5.4]

[01:00:47] So final reflections. I just I would say it's just amazing. [01:00:53][5.8]

[01:00:54] You know, that we've come this far. I think we're really seeing the birth of a fundamental new infrastructure for the global economy, really believe strongly that these multistakeholder outcomes where governance that involves the technology community, the government community, intellectual leaders, financial industry stakeholders. That's what it's going to take to bring this to scale into the mainstream. And I think, as you may have heard today, we are on our way there. That leads us a little bit into next week's episode. You know, digital dollars and global stablecoins, you know, crypto on Blockchains in general are really coming into focus more and more with policymakers globally. It's a much more intense focus at the supranational level and at the national level. As we've talked about, you know, in China, you know, Blockchains is a national strategic priority. And in D.C., policymakers are starting to engage. So we're gonna be exploring digital currency in D.C. next week. And we'll have several, I think, excellent guests who are playing key roles in interfacing with the policymaking community and the regulatory community in D.C. and hear from them from the frontlines of digital currency policy in D.C.. So looking forward to that episode next week. And until next time, stay well. Stay safe and stay informed. Thank you.

Sheila Warren
Head of Blockchain Policy, World Economic Forum
Dante Disparte
Vice Chairman, Head of Policy and Communication, Libra