WEBVTT

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So we ended up after really taking
some time looking at hyper Electrofabric, Ethereum,

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Stellar each have their pros and cons. We landed with hithero hashgraph for

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us, so not a typical blockchain
protocol, if you will, which has

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also its benefits on scalability. We
wanted to have EVM compatibility for smart contracts.

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Imagine central banks needing to tap into
the benefits of not wasting money for

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the government for example, or government
payments, imagining smart contracts making sure that

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Welcome to the Thinking Crypto podcast.
I'm your host Tony Edward and with

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me today is Carmel Cadet, who
is the founder and CEO of MTech.

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Carmel, great to have you on. Thank you so much for having me.

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Excited to be here. Yeah,
Carmel, I'm excited to learn about

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m TAG. I've heard a lot
about you guys over the years and in

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talking to folks at the Digital Dollar
Project and many others. So let's start

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with your background. You know where
you're from. Where'd you grow up?

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Sure? I am originally from Haiti, born and raised. That is part

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of the story on why am tech, to be honest. When I migrated

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to the US, I became very
fascinated by financial services and how financial products

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were broadly accessible to people and how
it improved their lives, their career,

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their health, and their centative living. And I always wondered why wasn't that

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available from anywhere around the world.
Personally, I deeply believe that everyone deserves

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access to an inclusive and a resilient
financial market. And I didn't know what

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to do about it at the time, but I ended up with a re

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at IBM where I fell in love
with technology, and that's where really the

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combination of financial services and using technology
to try to make financial markets better is

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where we land. So I looked
at your LinkedIn profile and I saw your

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time at IBM, and it looked
like you worked a lot on blockchain tech

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and innovations there. Tell us about
that. Was that your first encounter with

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bigcoin and crypto and blockchain? Oh? Good question. So my background is

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in corporate finance. I join IBM
right after college, actually got my internship

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in between, and I went back
to finish my finance degree. Then John

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IBM and corporate finance. Always worked
in software portfolios at the company and got

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to see really some amazing technologies being
done and how we transformed enterprises around the

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world. I like to say that
everyone is using IBM, they just don't

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know it just because it runs through
the wires of our world. But really

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got to see how impactful technology can
be. But I started in corporate finance,

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got to see you know, software, security, WebSphere, middleware,

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everything in between. Then ended up
going to Treasury and work for IBM,

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so really a good sense of how
to manage kind of corporate finance at a

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global level. Really loved it.
Worked on restructuring about thirty two billion dollars

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of assets for IBM, and then
IBM asked me to launch the IBM Blockchain

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division back in twenty seventeen, so
I was binge watching doing I was leaving

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from attorney leap as they were launching
getting ready to launch a division, and

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then I came back kind of hit
the ground running. So I was binge

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watching on blockchain and digital currency doing
my maternity leave, and I have a

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picture of my son around three months
trying to say blockchain actually, which is

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really funny. But I ended up
being exposed to really the technology before I

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got exposed to bitcoin. I opened
my first bitcoin wallet back in twenty seventeen

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and was very proud of myself on
how much I figured it out. You

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know, back then it was there
was no coin base at the time.

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But really fell in love with the
idea of how do we use technology to

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bypass some of the rigid structures that
have made financial services hard to access for

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people around the world. Coming from
the corporate world, definitely understood risk management,

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profitability, and had an appreciation for
why banking services and banks moved away

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from a lot of a lot of
countries and a lot of regions and you're

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you know, given where you are, you have an appreciation for this.

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The Caribbean has become over time a
very high high risk region for financial services

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and it was not worth the investment
that was needed in order to maintain banking

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services. So blockchain for me was
really a light bulb moment. Can we

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provide better visibility, better integration,
automated workflows that made financial services accessible,

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usable, but also more trusted.
Absolutely, and certainly this technology comes at

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a good time where it can help
those folks who are under bank, don't

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have access to proper financial services and
so forth. So where did the idea

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of starting MTech? How did that
come about? Understanding your background and seeing

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that need, where did where did
it go from? You know, I

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see this need, but I want
to I want to participate, And how

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did you know starting that company come
about? Yeah? Just crazy idea man

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to get to get started on the
central banking side. But I had the

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rare opportunity to be at the table
when the first central bank digital currency was

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being created. I was at IBM
at the time and Central Bank of Bahamas

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was looking for a blockchain based solution
to modernize their payment infrastructure and that was

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going to be the first CBDC.
I me and my team at the time

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decided to pitch. We got some
partners to work together, and we didn't

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think we were going to win,
but we actually ended up winning and ended

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up kind of really helping the team
architects. So we were part of the

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first phase the first pilot rollout.
Very exciting stuff. But the thing that

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really made sense to me is if
a central bank is looking to At the

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time, we didn't call it that, but now I can say that tokenize

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their cash, their sovereign currency.
Can we provide financial inclusion by design?

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Can we actually make financial market more
resilient by having blockchain technology, distributed ledger

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technology, better traceability as far as
market activity. Quickly understood that actually that

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can counter an time money laundering capabilities. People didn't really understand that at first,

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but the traceability and the visibility of
activities allows you to really deep dive

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and find and find better patterns and
understanding how money moves. So for me,

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that was really exciting. That was
the answer to my question seventeen years

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before that when I moved to the
US and I saw it and I could

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not un see it. So I
decided to make the decision to leave IBM

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and became an IBM partner when we
left, and helped IBM with the delivery

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around the CBDC and Bahamas. But
the very simple idea was to bring cash

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on blockchain. To put cash on
blockchain, we think that could you know,

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financial inclusion, resilience, but also
better liquidity. If you think about

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how paper cash works, it's very
limited. Yes, you know, more

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privacy, but you know, very
limited to peer to peer or physical transportation.

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And we thought that could be that
could be something. So I beg

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my husband to let me take half
of my phone one K everything I could

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borrow against it and lunch and lunch
M tech I had. My son was

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two at the time. Very very
big decision, but we thought that this

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could really make a difference if we
could bring blockchain to central banks, that

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was a game changer. Wow.
I love that and I really appreciate your

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entrepreneurial spirit, and uh, you
know it is risky and given that you

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know the time or period in your
life, having a young kid and so

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forth. And you said borrowing against
your pour one K. So that's awesome.

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And tell us about the services that
MTech provides. And obviously you're working

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with central banks, but how are
you enabling them to build this infrastructure and

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so forth. Sure, as you
can imagine, central banks are very conservative

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institutions, but interestingly enough, they
are also very much the anchor of most

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financial markets. Any running and scaling
and active financial market, you would find

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a central bank or some monetory authority
that does practically two main things, issue

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sovereign currency in that market, so
provide that sovereignty of currency, but also

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regulate the financial market. So if
you're going to have financial service providers,

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central banks are not direct financial service
providers, right, They regulate the private

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sector that is supposed to enable that
delivery of financial services. And what we

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realized, so after I left IBM, studied m tech, started working with

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the Bahamas project, but started talking
to central banks and realizing that there are

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just any other enterprise. They are
a financial institution that has a different mandate

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than what on the retail side are
familiar with. But they were desperately in

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need of a digital transformation and that's
what we kind of stumble onto. And

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when we started talking to central banks, realizing that for them, their processes

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were very manual. The systems that
they use haven't changed over fifty sixty years.

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Some of them don't have any systems. When it comes to processing basic

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things like license applications or regulatory reporting
for a compliance is done still today via

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paper submission or electronic uploading on a
website. Yeah, go to the OCC

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website and you will find a licensed
charter, licensed playbook, a handbook for

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you to download and you know,
have some night reading or probably hire a

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lawyer to go figure it out for
you. Right, But the processes were

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very very are still our old systems, manual processes, and what we also

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find out is very expensive way of
doing things. For printing cash, the

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US spends about eight hundred million dollars
a year to print paper cash. And

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as economies are becoming more digital,
some people would say, who's using this

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paper cash anyway? Right? I
mean, do you have cash on you

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or do I have? You know, why are we spending eight hundred million

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dollars to print paper cash in the
digital economy, and in smaller central banks

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spend about ten million dollars a year. So there was that high cost component

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versus what we knew was possible and
what we saw coming down the pipe around

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the tokenization of assets and how much
simpler and efficient and scalable that could be

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for central banks. And that's where
we landed with an opportunity to build modern

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central banking infrastructure. And when we
think of that, we bring a platform

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play to them where they can digitize
their workflows on the regulatory side, on

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the digital currency side, then we
bring really macro services and software services to

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do data analysis and APIs for them
to consume data, receive data in near

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real time, build better dashboard analytical
dashboards for them to get a better sense

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of what the market is doing.
And then on the tokenization side, we

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really took an approach on how do
we provide a Web three unable digital cash

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platform, so we partner with Layer
one protocols. There are certain things that

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we wanted to make sure that we
could have. Enterprise governance was very important.

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If I walk into a central bank, it's very hard for me to

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explain who's going to govern the network
that they're going to put the country's currency

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on. The second thing is the
scalability and of course privacy we saw we

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see really kind of a really love
and hate or a lot of confusion on

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what privacy really means. But with
the rise of bitcoin and digital assets,

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you also see that people are comfortable
having some level of you know, transparency

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into what's happening, but maintaining their
private information closer to their chest. And

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we thought that we could actually deliver
that. So our portfolio of services is

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a platform based, highly modular,
so a central bank can deploy a module

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that for their digital regulatory sendbox,
we deploy that for them. On one

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side, you have the central bank, on the other side you have the

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financial ecosystem, and then we build
what we like to call central banking as

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a service in between. Wow,
Carmel, really great insights there, you

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know, telling us about many of
the central banks, which is a bit

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eye opening for me that they haven't
fully upgraded their systems in like fifty to

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sixty years, so you guys are
helping them to do that. So that's

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really great. And you mentioned some
of the layer one protocols. Are you

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able to tell us which block chains
you have worked with and are currently partnered

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with? Sure? I mean coming
from IBM of course started with hyper ledge

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or Fabric, had a good appreciation
for how that could work into some enterprise

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use cases, but we also saw
some limitations around financial services and tokenization of

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assets when it comes to hyper Ledger. Great great crital cal for some use

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cases, but we believe that long
term, the retail aspect of cash as

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a liquidity asset, as a very
liquid asset would really take hold and be

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better used on a public ledger,
public network with EVM compatibility that can be

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interoperable with other assets, just like
Cache is today. So if you walk

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up to someone and say top up
my bitcoin wallet and they take your cash

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and they send you bitcoin from their
wallet, that nature of it I think

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will continue to happen and we wanted
to make sure that we build with that

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in mind. So we ended up
after really taking some time looking at Hyperludri,

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Fabric, Ethereum Stellar each have their
pros and cons, we landed with

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hithero hashgraph for us, so not
a typical blockchain protocol if you will,

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which has also its benefits on scalability. We wanted to have EVM compatibility for

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smart contracts. Imagine central banks needing
to uh tap into the benefits of not

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wasting money for the government, for
example, or government payments, imagining smart

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contracts making sure that the wallet is
still valid before disbursing funds or making certain

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disbursements for special programs. So we
knew smart contracts were going to be a

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component of it. So we really
took some time to research, and we

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really like working with Hi or hash
graft. They've been a great partner and

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but definitely a great protocol. And
of course the energy, the fact that

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we work in emerging market, the
energy consumption and the distribution nature of the

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running of the network is something that
we knew that we needed to officecate.

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It was too much to ask governments
and fund institutions to not only adopt a

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new technology, but also having to
figure out how to manage notes. I

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saw that very painful, painful process
in their early days. It literally kills

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so many blockchain projects. M man, I'm getting so much insights here,

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so I appreciate your knowledge and all
the things that are I'll slow down here.

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No, no, no, It's
great because I have like a ton

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of questions like the steam engines going
here. So you mentioned hyper ledger,

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fabric Fabric and I interviewed those folks, and I know their blockchain is private,

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but you mentioned you know you're leading
towards leaning towards the public blockchains.

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But question for you, I know
with central banks and financial institutions, privacy

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is a concern, and how are
they navigating that where maybe, like you

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said, the retail version is pretty
much open, is pseudononymous to a certain

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degree, or are you using like
a private aspect of those blockchains? And

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I'll give an apple like Avalanche has
subnets, private subnets, XRP Ledger has

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I believe what it's called the private
ledger or something like that. But you

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know, some of these blockchains are
building these like subnets which have a private

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lager. Is that what happening happening
with Yes, he there absolutely have what

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they call a special purpose network that
an institution can deploy. But of course

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the trade off also comes back in
right, So in the moment that you

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want a private network, you have
to have your own governance mechanism. Who's

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going to manage the nodes who's going
to determine the rules of you know,

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how frequently transactions are processed. Do
you use a typical blockchain or do you

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use any other consensus mechanism. There
are some problems that I think it's if

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you can address the issue of privacy
with a public network, then the benefits

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are so much greater on a public
network. Right, Just that if you

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make a list of pros and cons
you end up with so many more benefits

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if you can figure out the privacy
issue, because you're right the same way

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in early days of cloud, right, there was this perception of kind of

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well everything is in the cloud,
and you know who's controlling the cloud kind

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of thing. But in blockchain,
you see you started with a mechanism of

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private networks wanting to keep things.
From an ecosystem perspective, the economics actually

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just won't let that happen. And
I think it's you can look around the

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world you'll see the struggle of private
network scaling up. It's hard, it's

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really hard, and the ones that
have scaled up are more open and public.

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Are there use cases that you can
imagine a private network be better?

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For sure? There are some ecosystems
let's say trade or food traceability, where

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an organization wants to see its own
supply chain, right, and you integrate

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into that. I didn't want to
have your own visibility. But I think

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for financial services some of the problems
that we have in today's financial system is

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the silo aspect of the financial services
and the limitation that comes with those silos,

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meaning each organization make the rules on
how you get it and get out

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right. And that's what blockchain was
essentially actually turned out to solve very well.

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How can you provide broad access I
like to say decentralized access. I

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like to say centralized governance, centralized
centralized issuance, but with decentralized access and

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public networks do that very well.
You know, as you're saying that,

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I was thinking about JP Morgan's jpm
coin and they use Quorum, and that

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would be like that private centralized blockchain
and it's only between maybe their branches or

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things like that. Yeah, And
you know what, that's a really good

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example because JPM, if I'm not
wrong, ended up partnering with Consensus and

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transferred chrom over to Consensus with meta
mask and so on, which kind of

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brings you closer to the more public
network aspect of it or ethereum, But

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you're right, that's where they started. Internally, the benefits are limited though,

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I mean jpm coin was moving money
between their accounts. I don't know

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if they need a private coin to
do that, right. The benefits of

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it really become exponential when when you
step out of your network and being able

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to have interoperability more and with more
flexibility. Yeah. Absolutely. Now I

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don't know if you can tell us, but how many cential banks are you

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working with and could you give us
any names? Sure, we are working

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with six central banks today. It's
it's a lot to get six central banks

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to go to that digital transformation,
as you can imagine, We anticipated maybe

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one a year starting in twenty twenty
two, but we ended up with bankov

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Ghana was our first client. We
signed the first pilot agreement with them during

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COVID. It was quite a trigger
for digital transformation. But banko Ghana has

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been such a great model around innovation
in this space. Around twenty twenty they

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set up the Financial the Fintech and
Innovation Office at the Central Bank with a

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real mandate of engaging fintech, ecosystem, safe innovation and web three blockchain and

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digital currency type of approach, So
I'm very part of the team. We

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actually did a pilot for a ECD
hackathon, so that was their first cbd

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web three unabled CBDC hackathon, and
that was very successful from a central bank

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perspecise being able to see can we
actually use a public ledger for this,

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So we were happy to be able
to showcase that and then but they started

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with the regulatory sandbox. So the
regulatory sandbox is actually a very popular solution

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that we're bringing to market because it
allows the central banks to navigate their process,

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their slow process around putting regulatory frameworks
in place and the speed at which

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innovation is happening. So we bridge
that gap by enabling them to say,

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all right, innovators, we know
we don't have a regulatory framework for you

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yet, but come to the sendbox. We want to make sure that you

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have your compliance, your consumer protection, that you're not going to do money

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laundering with whatever product you're launching.
Will give you a sendbox license and will

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supervise how you're doing, and that
will inform us on how we should actually

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regulate this space. But it also
accelerates your go to market right so it's

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kind of a win win and being
able to do that with a digital platform,

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having real time visibility into their performance
and to their data is something that

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we enabled and we have six central
banks who are deploying that today. Central

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Bank of Nigeria was our second client, and we're working with Liberia, Sera,

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Leon Guinea and Gambia. So there's
a zone that we kind of tapped

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into and they're very, very excited
to not only digitize what they do,

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but also regional integration over time.
Wow, that's amazing. Congrats on this

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success. And you know, as
you're saying that, I can't imagine what

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it's like to pitch a central bank
and you know, moving and you know,

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trying to get them from the analog
to digital world. So that's pretty

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incredible. Now. I remember reading
and I think I was talking to Chris

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John Karla the Digital Dollar Project about
this that Chris that you guys ran a

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pilot for a US CBDC. Tell
us about that and were there any updates

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with the FED receptive if you can't
tell us anything there, so can't share

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too much on what happened on the
Digital Dour Project side. But actually when

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we join the Digital Dour project.
We started talking to essentially financial service providers,

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fintech companies who are trying to think
of how can they build on CBDC

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in a perfect There are two use
cases that we started working on. One

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was being able to provide financial inclusion. And I know people don't think that

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the US have a financial inclusion problem, but there are the size of Ghana

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in the US that don't have bank
accounts in the US about thirty million people

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about in the US that don't have
bank accounts for various reasons. Granted,

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but the access has moved away from
local branches and so on, and whether

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people are digitally unable to access digital
services. But they were in a very

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underserved and under bank region where they
had a community of people who are either

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in shelters or coming out of you
know, jail or coming out of different

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situations that don't have bank account How
could they provide digital cash to them?

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Right, they don't have to have
a bank account to hold cash and CBDC

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on a retail CBDC if you design
it properly, if you have the right

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regulatory framework around it, you don't
need a back account to hold a CBDC

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and that was the beauty of why
digitizing cash and tokenizing cash got us excited.

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The other use case was also very
interesting where they wanted to issue their

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own stable coin for their local community
but back it with CBDC as reserves.

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So that was a very interesting mechanism. So you can have the retail and

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you can have the wholesale component of
it if you will, where it can

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really be interchangeable as far as what
you do with a CBDC if you are

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a financial service provider versus if you
are a user. So those are very

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you know, two use cases that
we started working on with the digital or

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project participants. We're still going through
that as you can imagine as people you

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know, we're building, but those
are the early test cases that became very

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interesting. And I think that's probably
what Chris is referring to. That's fascinating

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and I didn't think about that.
But stable You said a localized stable coin,

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so it could be maybe are you
thinking a country wide, nationwide or

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like state specific, using the United
States as an example. Think of it

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as just like the US Circle you
know, enables or let's say Ripple issues

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their own stable coin. Think of
it as a community base or more targeted

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type of stable coin that another issuer
would would would issue and it would be

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US dollar and it would be one
to one, but instead of having cash

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directly, which cash doesn't pay interests. Cash is really kind of one to

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one. You could create different business
models around your stable coins that are different

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from the CBDC that is back from
whether you wanted to create rewards program or

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have a voucher program where if you're
using the stable coin, you can go

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to all the registered you know,
ecosystem stakeholders if you want to, if

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you're in that community, you want
to go to that grocery, you want

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to go to this vendor. You
have certain vendors that accept the stable coin.

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Those are the use cases that I
think are going to be very interesting

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on how moving the resilience that they
can have with the backing of cash being

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one to one. If you think
about it, Circle is doing the same

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thing, right, so they have
one to one backing US dollar, but

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it's just with black Rock instead of
with the FED. Black Rock ends up

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having an account of the FED,
so you kind of like you still have

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the intermediary here that I think over
time, as central banks think through how

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do they provide an efficient infrastructure to
the market that you might see people really

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engaging and connecting directly into into a
central bank system, a CBDC system.

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That's so fascinating. And as you're
saying that, I'm thinking about all the

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things that have been brought up and
discussed over the years, such as new

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stable coins have the reserves, right, some are using US treasuries. Now,

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I know there's a big question about
teather even though there's they have monthly

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or quarterly attestations. I've heard Howard
Lutnick at Caunterfitz General say they do have

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the reserves. But you know,
to your point, if these CBDCs are

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put into play, and let's say
the United States creates a digital dollar,

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they would have these stable coin issuers
use that as the reserve. So that's

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fascinating. Yes, I think so
too. I think so. And you

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end up addressing privacy pretty well right
the retail side when you look at what

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the central bank can see. The
way you can tell whether there is a

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level of privacy when it comes to
CBDC on the retail side is one whether

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the central bank is the direct interface
provider. We've seen a couple of central

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banks think about how to introduce their
own app that that's one and their own

356
00:32:00.400 --> 00:32:05.720
app is the only way to get
access to the CBDC. I think that

357
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there's at least a perception of the
central banks senior information directly, but central

358
00:32:10.160 --> 00:32:17.279
banks don't really want to do that
because the idea of doing KIC and AML.

359
00:32:19.359 --> 00:32:22.440
Central banks don't want the risk of
doing that, so they're not in

360
00:32:22.480 --> 00:32:25.759
the business of doing that. So
I think there's a natural disincentive for them

361
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to get into that role. What
most central banks are expecting and have expressed

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00:32:34.400 --> 00:32:40.720
desire to do. The design is
really to make CBDC and cash available through

363
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the private sector solutions. The same
way you have to go to an ATM,

364
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you don't go to the central bank. You don't go to the FED

365
00:32:50.720 --> 00:32:53.319
directly to get your cash. You
go to an ATM to get your cash.

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There's going to be an intermediary that
provides that and that information. Your

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information is with your provider, not
with the central bank, right, And

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one of the benefits of using a
public ledger is that you can actually see

369
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what the central bank sees, right, and the central bank can say here's

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00:33:15.319 --> 00:33:20.960
what's on the ledger, here's what
we see, there's no private information on

371
00:33:21.000 --> 00:33:24.839
there. In order for us to
get your private information, one, it

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00:33:24.920 --> 00:33:30.599
has to be under the constructle whether
it's aml or any suspicious activities. But

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then we still have to go through
your financial service provider and work with them

374
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for any investigations and so on the
same way it's done today to be honest,

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right, if there is any suspecial
activity, then your bank is part

376
00:33:45.519 --> 00:33:51.640
of the conversation as far as getting
information. But that for me is a

377
00:33:51.720 --> 00:33:58.440
benefit of using public ledger that everyone
can see what's visible. And then putting

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the second thing is putting laws around
that and making sure that it's not only

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00:34:02.279 --> 00:34:08.519
codified, but it is legally kind
of stated that the central bank does not

380
00:34:08.679 --> 00:34:14.719
receive PII under certain you know,
except under certain circumstances. And then the

381
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second thing is that the token is
designed as a bearer's instrument, meaning if

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you hold it, it's yours,
just like it's cash. No one is

383
00:34:23.719 --> 00:34:28.599
coming to you and kind of taking
your cash from your pocket. So a

384
00:34:28.679 --> 00:34:31.039
central bank should not be able to
kind of take cash out of your wallet

385
00:34:31.440 --> 00:34:37.880
again, minus the extreme circumstances that
would require that. But I think that's

386
00:34:37.920 --> 00:34:42.840
a good way of being able to
address that. For Cremel, Let's walk

387
00:34:42.880 --> 00:34:46.719
through a mock scenario here potentially hypothetically
here, right, I have JP Morgan

388
00:34:46.760 --> 00:34:52.000
as a bank five years from now, could I see a JP Morgan being

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00:34:52.119 --> 00:34:57.679
intermediary where I can access Circles,
US, DC, Paypals, p y

390
00:34:57.760 --> 00:35:00.559
US, the Ripples News stable coin. You know, depending when it's launch

391
00:35:00.639 --> 00:35:07.960
or something else. Do you see
banks being intermediaries versus you know, people

392
00:35:07.039 --> 00:35:09.719
in the general public don't know who
Circle is, they don't know who Ripple

393
00:35:09.840 --> 00:35:14.159
is, right, but they know
they know who Bank America is, and

394
00:35:14.639 --> 00:35:21.360
TD Bank and JP Morgan DC.
A scenario like that, I definitely see

395
00:35:22.960 --> 00:35:29.679
banks playing a role. However,
I think they have a few things going

396
00:35:29.719 --> 00:35:35.679
against them, right and which opens
opportunity for their players. I think the

397
00:35:35.800 --> 00:35:43.119
banks don't necessarily have a problem that
digital asset is solving for them. You

398
00:35:43.159 --> 00:35:47.599
could, you could think about it
on the settlement side, security settlement on

399
00:35:47.960 --> 00:35:55.039
wholesale transactions, securities, UH trade
payment and so on that take a few

400
00:35:55.079 --> 00:36:00.400
days. But I would argue,
depending which bank you're talking to, if

401
00:36:00.400 --> 00:36:05.199
they're the one holding that cash,
they have the float for two days,

402
00:36:05.239 --> 00:36:07.719
they're not trying to give that up
for twenty four to seven settlement right,

403
00:36:08.639 --> 00:36:15.519
money comes in and out really fast
that way, I think the opportunity,

404
00:36:15.599 --> 00:36:20.880
however, you're going to see the
Circles of the world and the Paypals of

405
00:36:20.920 --> 00:36:27.880
the world leveraging either their own network
or building networks around the product that they're

406
00:36:28.239 --> 00:36:31.039
they're they're building, and I think
Circle did it right. Instead of them

407
00:36:31.079 --> 00:36:37.719
being the issuer, it's really working
with different issuers and different channels to make

408
00:36:37.760 --> 00:36:47.280
sure that this can be accessible in
different platforms, and PayPal paypals start with

409
00:36:47.320 --> 00:36:52.760
its own network, but bringing it
into more open networks for it to be

410
00:36:53.719 --> 00:37:00.159
a more liquid asset while they maintain
the one to one that they received for

411
00:37:00.239 --> 00:37:05.679
that I think is also going a
very scalable model. But I think you're

412
00:37:05.719 --> 00:37:09.159
going to see a lot of FinTechs
play into this space. I actually think

413
00:37:09.239 --> 00:37:17.519
that the digital asset landscape of products
of fintech products has not arrived yet.

414
00:37:19.840 --> 00:37:22.880
I think there's a whole new generation
of financial products that are going to run

415
00:37:22.960 --> 00:37:28.800
on digital assets instead of bank rails, whether those are bank stable coins or

416
00:37:29.039 --> 00:37:36.480
bank infrastructure. But I think you're
going to see new payment entrants just by

417
00:37:36.559 --> 00:37:42.639
default going into digital asset payment types
and that requires a different business model if

418
00:37:42.639 --> 00:37:49.920
you think about it right, different
compliance, different partners, different ecosystem to

419
00:37:50.119 --> 00:37:54.880
plug into, different risk profile that
you need to manage. And depending on

420
00:37:54.920 --> 00:38:01.559
which countries, it might be easier
to actually expand globally and have your products

421
00:38:01.599 --> 00:38:07.280
be used globally if you have a
digital asset compare if you are a financial

422
00:38:07.320 --> 00:38:13.159
institution and you have to give access
to people to your system versus. I

423
00:38:13.199 --> 00:38:17.320
think there's quite a bit of a
new set of products that will that will

424
00:38:17.320 --> 00:38:23.360
be very attractive to individuals, businesses
small and large. I'm seeing more and

425
00:38:23.440 --> 00:38:30.960
more corporates actually partner with smaller companies
to get into their Web three strategy.

426
00:38:30.760 --> 00:38:35.039
I think that's going to come.
And you know, with the ETFs and

427
00:38:35.199 --> 00:38:38.800
the laws that just passed in the
US, I spent a lot of time

428
00:38:38.840 --> 00:38:44.599
in Africa. There's a lot of
headlines that kind of make things confusing on

429
00:38:44.639 --> 00:38:47.920
where things are. But I think
compared to two years ago, the conversation

430
00:38:49.079 --> 00:38:52.840
is very different, just very different. Back then, it was you know,

431
00:38:52.079 --> 00:38:55.840
no no, no, no no
to you know, today it's okay,

432
00:38:57.000 --> 00:39:00.559
how do we make money with this? Or how can we actually regulate

433
00:39:00.599 --> 00:39:06.000
this or you know, it's it's
a different conversation now. Speaking of regulations,

434
00:39:06.480 --> 00:39:09.440
there's been a lot of political narratives
here in the United States. You

435
00:39:09.480 --> 00:39:15.119
know, certain political parties taking the
action well we're against CBDCs and or you

436
00:39:15.159 --> 00:39:17.000
know, in your right to we
want to we're concerned about your right to

437
00:39:17.039 --> 00:39:21.199
privacy and so forth. And I
see, you know, the pros and

438
00:39:21.239 --> 00:39:24.599
cons there's tons of pros for CBDCs
and digital currencies. I think the one

439
00:39:24.960 --> 00:39:30.280
con, which is just a potential
just if you put the guardrails in place,

440
00:39:30.320 --> 00:39:34.079
I think like kind of what you're
alluding to, where the CBDCs are

441
00:39:34.119 --> 00:39:37.840
the reserves, but the retailers using
stable coins. I think that would work.

442
00:39:37.440 --> 00:39:40.119
But privacy is still a big concern
for folks. And you know,

443
00:39:40.159 --> 00:39:43.960
Congressman Tom emer who I've had on
the podcast a couple of times, he

444
00:39:44.039 --> 00:39:49.360
introduced a CBDC Anti Surveillance State Act. I want to get your thoughts on

445
00:39:49.400 --> 00:39:52.119
that. And obviously that's in the
United States. But what are the folks

446
00:39:52.320 --> 00:39:55.719
in Ghana and so forth? How
are they approaching are they do they have

447
00:39:55.760 --> 00:40:00.679
the same level of concern? Yeah, I mean I'll start the last question.

448
00:40:00.719 --> 00:40:02.880
I think there's a kind of a
learning curve for everyone, right,

449
00:40:04.480 --> 00:40:08.960
Like I said, two years ago, everyone thought bitcoin was going to be,

450
00:40:09.039 --> 00:40:15.440
you know, just for fraud and
only bad people used it. And

451
00:40:15.440 --> 00:40:19.159
then until you have black Rock,
who wants to use it? You know,

452
00:40:19.440 --> 00:40:22.039
like we'll put a whole etf around
it. So I think there's that

453
00:40:22.159 --> 00:40:34.679
learning curve. But look, I
have I have a maybe sarcastic way of

454
00:40:34.760 --> 00:40:39.800
kind of thinking about this stuff.
But if the Congressman is pro bitcoin,

455
00:40:43.559 --> 00:40:51.480
then you have by default a level
of transparency and openness to your information that

456
00:40:51.519 --> 00:40:58.719
you already are providing. I think
privacy is a tough term to get people

457
00:40:58.760 --> 00:41:01.039
to agree on. Actually post that
on Twitter at some point it's like what

458
00:41:01.159 --> 00:41:06.039
is privacy to you? And I
got different answers for everybody who replied.

459
00:41:08.400 --> 00:41:15.679
I think when I look at what
the bill proposes, it's not anti CBDC.

460
00:41:15.920 --> 00:41:22.599
It's anti CBDC that violates your privacy. And I think I believe that

461
00:41:22.639 --> 00:41:24.880
there's a way to solve for that. And if you solve for that,

462
00:41:25.880 --> 00:41:37.079
then what you're talking about is having
a US dollar version of bitcoin, and

463
00:41:37.480 --> 00:41:39.840
I don't think a lot of people
would be against that, to be honest

464
00:41:39.880 --> 00:41:45.639
with you, you know, because
bitcoin is something that you can't control.

465
00:41:45.840 --> 00:41:49.599
Yes, decentralized and so on,
but is that the only asset that you

466
00:41:49.719 --> 00:41:54.599
want to be using. But at
the same time, the US prize itself

467
00:41:54.719 --> 00:42:00.199
and providing kind of safety and security
to the world when it comes to their

468
00:42:00.239 --> 00:42:05.239
Google currency. People have different opinions
about that, but that's where we are.

469
00:42:07.079 --> 00:42:14.800
Do you actually see that role in
a web three world? Do you

470
00:42:15.480 --> 00:42:21.519
move away and say we're not doing
CBDC because it is not something that's going

471
00:42:21.559 --> 00:42:28.800
to be private while everyone else is
either issuing their own CBDC or you're seeing

472
00:42:29.119 --> 00:42:32.760
a transfer of trust from the US
dollar to bitcoin. I think that's going

473
00:42:32.840 --> 00:42:39.320
to be a very interesting conversation for
policymakers in the US. In Europe and

474
00:42:39.559 --> 00:42:45.039
Asia, they are much further along
as far as deciding. I will never

475
00:42:45.119 --> 00:42:51.960
forget where I was when I think
it was Governor run the Centus at the

476
00:42:52.039 --> 00:42:57.639
time who took the charge on Twitter
on anti CBBC. I was sitting at

477
00:42:57.679 --> 00:43:00.960
a BIS summit, which is the
Bank of International Settlement, which is a

478
00:43:01.039 --> 00:43:06.920
tink tink of central banks in Switzerland
and Basil at the time in Switzerland,

479
00:43:07.880 --> 00:43:20.880
watching the European Central Bank monetary Authority
of Singapore and Bank of France arguing on

480
00:43:20.920 --> 00:43:27.159
whether they should have programmability of their
CBDC, not whether they should be doing

481
00:43:27.199 --> 00:43:34.920
CBDC. Is debating whether we should
have programmability and whether the idea of programmability

482
00:43:36.199 --> 00:43:43.679
changes the nature of the singleness of
money. Very deep currency central banking conversations

483
00:43:43.719 --> 00:43:46.719
that are really more advanced. And
then I opened Twitter. I happened to

484
00:43:46.719 --> 00:43:51.079
be opening Twitter on that and because
I was kind of trying to post as

485
00:43:51.119 --> 00:43:54.360
the event was going on, and
then Twitter was blowing up around you know,

486
00:43:54.639 --> 00:43:59.719
kind of US is not doing CBDC. I think it's a matter of

487
00:43:59.719 --> 00:44:06.960
time, to be honest with you. I think the odds and the dynamics

488
00:44:06.960 --> 00:44:12.679
happening around the world is going to
make it a really tough choice for the

489
00:44:12.800 --> 00:44:17.480
US to not do this. So
maybe it's the model you're talking about before,

490
00:44:17.599 --> 00:44:22.559
where they do the wholesale CBDC.
I don't know what blockchain, Maybe

491
00:44:22.599 --> 00:44:27.360
a private blockchain is running behind the
scenes. But like you said, the

492
00:44:28.760 --> 00:44:34.840
stable corn issuers are given regulation and
they start pushing it to the masses,

493
00:44:35.559 --> 00:44:38.280
but they have to hold the CBDC
as reserves. I think that makes sense.

494
00:44:39.719 --> 00:44:45.320
Maybe that's Yeah, that's definitely a
model. That's definitely a model.

495
00:44:45.119 --> 00:44:51.480
What ends up kind of throwing a
little wrench, and that is that central

496
00:44:51.519 --> 00:44:59.480
banks have a mandate, legal mandate
to provide sovereign currency in their country.

497
00:45:00.599 --> 00:45:06.519
And if you delegate that a bit
to the private sector one hundred percent,

498
00:45:07.039 --> 00:45:13.920
meaning let's just stay reserve, you
guys take the retail. If there is

499
00:45:14.000 --> 00:45:21.079
a failure in the market where circle
drops or ripple drops, then what fills

500
00:45:21.119 --> 00:45:25.719
the gaps? Right in finance,
we call that concentration risk, if you

501
00:45:25.760 --> 00:45:31.800
will, meaning that central bank as
a regulator depends on only on the private

502
00:45:31.880 --> 00:45:39.599
sector to provide money and currency.
It's not a risk that they're going to

503
00:45:39.719 --> 00:45:45.320
take, at least for the foreseeable
future. They will continue to maintain cash.

504
00:45:45.320 --> 00:45:49.199
There's a reason that they still spend
a lot of money printing cash is

505
00:45:49.199 --> 00:45:52.679
because a lot of people still want
it. To be honest, and second,

506
00:45:52.280 --> 00:46:01.199
it's the last result alternative. When
svbs have opening what FTX is happening,

507
00:46:01.400 --> 00:46:06.800
everybody wants their cash. If you
could give it to them in paper,

508
00:46:06.840 --> 00:46:12.559
it would be even better just for
them to put it on a mattress

509
00:46:12.599 --> 00:46:15.760
and feel safe. But I joke, but you know, you want to

510
00:46:15.880 --> 00:46:22.119
kind of cash out of those assets, right, because there is a different

511
00:46:22.760 --> 00:46:30.000
risk profile. Any company that issues
stable coins is only as strong as their

512
00:46:30.119 --> 00:46:37.559
balance sheet. The US government or
the central bank runs on their GDP as

513
00:46:37.639 --> 00:46:42.119
their balance sheet, right, So
very different risk profile the likelihood of a

514
00:46:42.199 --> 00:46:45.360
central bank failing versus a private sector
failing. But you're right. I think

515
00:46:45.360 --> 00:46:52.079
those guys are feeling going to fill
in a big gap and then giving people

516
00:46:52.239 --> 00:46:57.400
choice on whether they want to keep
digital cash, stable coins, bitcoin,

517
00:46:58.239 --> 00:47:04.039
other private tokens David token if they
want to. You know, the idea

518
00:47:04.079 --> 00:47:07.199
of really having different assets and tokens
that they that they want to keep in

519
00:47:07.239 --> 00:47:12.360
their portfolio, I think is going
to be something that people actually ask for

520
00:47:12.519 --> 00:47:17.159
and look for. I'm so intrigued
by how they're going to figure this out,

521
00:47:17.239 --> 00:47:22.639
you know, is it circle ripple, PayPal the other issueres are tied

522
00:47:22.639 --> 00:47:24.920
into the treasury or so, I
don't know, right, Yeah, I

523
00:47:24.920 --> 00:47:28.840
mean, I think those guys are
definitely looking forward to that. I think

524
00:47:28.920 --> 00:47:31.559
those guys, if they're not,
they should be, but I think they

525
00:47:31.920 --> 00:47:40.239
probably see that. Think about it, right, Imagine if you had your

526
00:47:40.360 --> 00:47:54.400
reserves very compatible as far as asset
type or technological standards to your private stable

527
00:47:54.480 --> 00:47:58.239
coin, right, so if you
need to tap into your reserve, you're

528
00:47:58.280 --> 00:48:01.679
not waiting for two days while you
have twenty four to seven stable coins running

529
00:48:02.880 --> 00:48:09.679
right fed now is not a you
know, twenty four to seven system.

530
00:48:10.639 --> 00:48:21.360
The TPS or SEPA system and Europe
kind of runs in certain times and you

531
00:48:21.440 --> 00:48:23.760
have to shut down and do settlement
and so on, so that compatibility is

532
00:48:23.760 --> 00:48:28.119
not there, and I think there's
a great efficiency for those players to have

533
00:48:28.199 --> 00:48:35.400
reserves in kind of central bank stable
coins while backed by or to back their

534
00:48:35.480 --> 00:48:38.719
own private stable coins. So what's
on your twenty twenty four road map?

535
00:48:39.840 --> 00:48:45.239
Oh man? Okay, So one
thing that we're seeing right now, definitely

536
00:48:45.280 --> 00:48:53.360
the timing around central banking digitization is
upon us. We are It's crazy to

537
00:48:53.400 --> 00:48:57.920
say, but we literally have a
backlock of central banks that we're trying to

538
00:48:57.960 --> 00:49:05.880
get to and building for them.
Both on the regulatory side, meaning sendbox

539
00:49:05.960 --> 00:49:13.039
from going from sendbox to supervision for
not only current Web two type of products,

540
00:49:13.079 --> 00:49:17.039
but Web three that is coming down
the pipe, right, so they

541
00:49:17.079 --> 00:49:22.000
need better tools. We are building
that. On the central bank side,

542
00:49:22.719 --> 00:49:28.519
we're also seeing the opportunity to create
value for the financial ecosystems. One thing

543
00:49:28.519 --> 00:49:31.599
that we realize that central banks are
regulators. It is not their job to

544
00:49:31.760 --> 00:49:38.280
make your life easier as a regulated
entity, and that creates kind of a

545
00:49:38.320 --> 00:49:44.840
lot of fragmentation on the ecosystem on
how did they engage regulators, how did

546
00:49:44.840 --> 00:49:49.719
they do compliance, how did they
become more resilient, and how did they

547
00:49:49.800 --> 00:49:54.119
minimize their compliance risk and get shut
down in the middle of them growing.

548
00:49:55.360 --> 00:49:59.960
Those are things that those are problem
and pain points that we're looking at addressing.

549
00:50:00.400 --> 00:50:04.360
So for us, we're looking at
bringing the Sandbox into more countries,

550
00:50:05.320 --> 00:50:12.079
increasing our product portfolio with the central
banks that we were winning, and we're

551
00:50:12.280 --> 00:50:16.039
very hopeful of a new CBDC launching
soon. We'll see. That's awesome.

552
00:50:16.599 --> 00:50:21.000
Well, I'm excited to see those
updates. I got some wrap up questions

553
00:50:21.039 --> 00:50:22.920
here for you. First, if
you could create your own metaverse, what

554
00:50:22.920 --> 00:50:29.719
would the theme be? Oh man, I never had that question before.

555
00:50:30.079 --> 00:50:36.679
If you put your oculus on or
yeah, yeah, yeah, Well I

556
00:50:36.760 --> 00:50:44.800
would definitely reinvent Haiti. I would
reinvent Haiti. I would love to take

557
00:50:44.880 --> 00:50:49.480
Haiti and everywhere with me, at
least the Haiti that I have in my

558
00:50:49.559 --> 00:50:52.239
mind and what I remember and what
my parents had to talk about. That

559
00:50:52.280 --> 00:50:59.599
would be pretty cool, given how
almost impossible it is to imagine today.

560
00:50:59.599 --> 00:51:01.440
I was to my mom for a
good hour last night and just talking about

561
00:51:01.480 --> 00:51:06.920
how things are happening in Haiti right
now. Given how impossible it seems,

562
00:51:07.159 --> 00:51:14.000
I think creating a metaverse that recreatesd
it that reimagined it would be really cool.

563
00:51:14.480 --> 00:51:17.039
That's awesome. And I got some
rapid fire questions for you. Favorite

564
00:51:17.039 --> 00:51:23.639
food, favorite food. I'm a
foodie, so that's a hard one.

565
00:51:24.880 --> 00:51:31.960
Tacos, I'll say tacos. Favorite
musician or band John Legend, Nice,

566
00:51:32.559 --> 00:51:45.559
favorite movie, dirty Dancing. Favorite
book Seven Principles of Vision mm hmm by

567
00:51:45.800 --> 00:51:50.840
Dr Miles Monroe. I gotta check
that out. And when you're not working

568
00:51:50.840 --> 00:51:53.639
at m tech, what are you
doing for fun? Uh? Going to

569
00:51:53.760 --> 00:52:04.079
baseball practice, basketball practice, cooking, not hanging out with my friends or

570
00:52:04.119 --> 00:52:08.000
calling my friends enough, that's for
sure, and then trying to exercise.

571
00:52:08.519 --> 00:52:10.920
That's kind of like my thing.
So I'm trying to, you know,

572
00:52:12.000 --> 00:52:15.159
kind of maintain and protect my regime
a little bit. But those are the

573
00:52:15.199 --> 00:52:20.679
things that kind of take me away
from MTAP. Awesome caramel, absolute pleasure.

574
00:52:20.800 --> 00:52:22.920
I appreciate your knowledge and insights,
and I got to have you back

575
00:52:22.960 --> 00:52:28.320
on because I'm fascinated by what the
central banks are doing in the future of

576
00:52:28.400 --> 00:52:32.239
digital currencies and CBDCs. But congrats
on all the success and thank you so

577
00:52:32.320 --> 00:52:36.880
much for joining me. Sounds good. Thank you for having me. I

578
00:52:36.920 --> 00:52:39.679
think it's been a long time coming
and I'd be happy to come back,

579
00:52:39.679 --> 00:52:42.480
so let's do it again. Awesome