January 14, 2021

My guests today are Christopher Giancarlo, former Chairman of the Commodity Futures Trading Commission, and Daniel Gorfine, who previously led the CFTC’s innovation program, LabCFTC. When they left the commission, they teamed up to found the Digital Dollar Project, advocating for why and how the United States needs to join the 80-plus other countries that are planning to issue Central Bank Digital Currency, or CBDC.

Chris and Daniel argue that the world of money as we know it is about to change completely -- the whole way we issue money, use money, and design money. They take us back through the past, to the times when the system has transformed before -- thousands of years back to the invention of money, and then up to the medieval breakthroughs of banking that were invented in northern Italy, and then on to how the Internet reinvented payments -- the big leaps that unlocked massive new opportunities. They note that the present day system is still mostly analog -- pre-digital age -- and argue that in the US, the Dodd-Frank Act was the last big effort to keep it patched together. They think that we are poised today to make another profound transformation, to digital money.

In our conversation, they explain what CBDC is -- fiat currency in digital form. They address people’s tendency to confuse it with the electronic payments we already have today, in that CBDC is not just an electronic ledger entry. It’s actual legal tender. It functions exactly like cash. It is always, automatically good. There is no need for a person receiving CBDC to assure that there are sufficient funds in a payer's account, or even a need to know who the payer is. Like cash, if you have it, you can spend it, no strings attached.

On the other hand, they also explain how, unlike cash, this government-issued electronic money can be programmed and paired with smart contracts on blockchains so that, without needing any middlemen, funds can be transferred easily and instantly across the boundaries of space, and even the boundaries of time. For example, it can be programmed to be spent in the future only if certain terms are met, even if the sender, by then, is long gone. Such programming could be designed to address an endless variety of business, personal or regulatory objectives. Chris and Daniel take us through examples of the many ways this new medium of exchange could be put to use -- a list that will only grow as more and more people bring creative thinking to it.

Daniel and Chris note that 80 countries are developing CDBC and talk about which are in the lead, most notably including China. They talk about what it will mean for the United States, and the world, if other countries move ahead, and it does not. They think the US may not need to be among the first adopters, but that it also can’t lag behind while others shape this brave new world. They think it’s critical that the new global money system be grounded in “American values,” and they describe the “champion model” they are advocating in order to address the many complexities that inevitably lie ahead.

They also argue that the United States needs a moonshot type of project. I’ll share in the show notes the Wall Street Journal article they coauthored over a year ago, entitled, We Sent a Man to the Moon. We Can Send the Dollar to Cyberspace.” 

More on Chris Giancarlo

J. Christopher “Chris” Giancarlo was unanimously confirmed to serve as Chairman of the U.S. Commodity Futures Trading Commission by the U.S. Senate on August 3, 2017. Prior to becoming Chairman, Mr. Giancarlo was designated Acting Chairman on January 20, 2017 and was nominated to serve as the Chairman on March 14, 2017 to a term that expired in April 2019. Mr. Giancarlo had served as a CFTC Commissioner since his swearing in on June 16, 2014, after a unanimous consent by the U.S. Senate on June 3, 2014.

Before entering public service, Mr. Giancarlo served as the Executive Vice President of GFI Group Inc., a financial services firm. He was previously Executive Vice President and U.S. Legal Counsel of Fenics Software and was a corporate partner in the New York law firm of Brown Raysman Millstein Felder & Steiner. Mr. Giancarlo joined Brown Raysman from Giancarlo & Gleiberman, a law practice founded by Mr. Giancarlo in 1992 following his return from several years in London with the international law firm of Curtis, MalletPrevost, Colt & Mosle. Mr. Giancarlo was also a founding Co-Editor-in-Chief of eSecurities, Trading and Regulation on the Internet (Leader Publications).

He has testified before Congress regarding the implementation of the Dodd-Frank Act, and writes and speaks extensively on public policy, legal and other matters involving technology and the financial markets.

More on Daniel Gorfine

Daniel Gorfine is the founder of Gattaca Horizons LLC, a boutique fintech advisory firm.  He also currently serves as an Adjunct Professor of Law at the Georgetown University Law Center and is a co-founder of the Digital Dollar Project.  He previously served as the U.S. Commodity Futures Trading Commission’s first Chief Innovation Officer and Director of LabCFTC.

Prior to the CFTC, Mr. Gorfine was Vice President, External Affairs & Associate General Counsel at OnDeck.  He also previously served as Director of Financial Markets Policy and Legal Counsel at the Milken Institute think tank, and earlier in his career worked at the international law firm Covington & Burling LLP.  Mr. Gorfine also served a clerkship with U.S. District Court Judge Catherine C. Blake in the District of Maryland.

A graduate of Brown University (A.B.), Mr. Gorfine holds a J.D. from George Washington University Law School and an M.A. from the Paul H. Nitze School for Advanced International Studies (SAIS) at Johns Hopkins University.

More for our Listeners

Please follow AIR on LinkedIn and Twitter, and also follow me personally on Twitter @JoAnnBarefoot. And be sure to leave us a five-star rating on your favorite podcast platform.

This is our first show of 2021. If you missed the last episode in 2020 over the holidays, be sure to go back and listen. It’s one of my own all-time favorites, with Intuit founder Scott Cook, and it’s been getting a tremendous response.

2021 is off to a difficult start in the United States, with our Capitol Building being stormed last week, and President Trump impeached this week, for the second time, and Washington DC now under tight, armed security and with many roads closed, aimed at enabling a peaceful inauguration, next week, of Joe Biden and Kamala Harris. These crises have flared amidst a worsening pandemic and worsening job losses as well. Despite all this, the arrival of safe and effective vaccines offers rays of hope. We at AIR continue our work safely from home, and we hope that you, our listeners, are all safe and well.

We have some changes planned for Barefoot Innovation this year, delving more deeply into key themes in financial and regulatory innovation. We plan a special series focused on innovation in emerging markets. We also plan a series with guests offering insights on how the plans of the new US Administration and Congress are likely to impact financial and regulatory innovation, for listeners who are either in the US or interested in what is happening here.

Meanwhile, watch for some great upcoming shows. They will include Nathaniel Harley of Mantl, Susan French of BBVA, Maria Gotsch of Partnership Fund, Mike de Vere and Teddy Flo of Zest, Pindar Wong of VeriFi, Rob Nichols of the American Bankers Association, and Sharmista Appaya and Ivo Jenik of the World Bank and CGAP, respectively.

The 2021 virtual events and conferences are also coming onstream. I am excited to have been chosen alongside Cleve Mesidor to speak at South by Southwest on “Diversifying Tech.” Make sure to register and join us! I will also be speaking at #ACCERATERegTech2021 in March. I’ll speak at both Harvard University and the US Treasury in February. And I’m looking forward to speaking at LendIt, in April. I’ll hope to see many of you at these great gatherings.

Let’s work toward better times in the days ahead.

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