December 11, 2023
Today’s show updates us on the evolution of CBDCs — central bank digital currencies. Coming back to us again is former CFTC Chairman Chris Giancarlo, who is, among many things, founder of the Digital Dollar Project.
I participate twice a year in a wonderful roundtable held in Vaduz, Liechtenstein, by Prince Michael and by Thomas Puschman of the University of Zurich. Our focus is the financial system of 2030, and the deliberations to date are producing a book that will be out next year. Be sure to watch for that (and here is the show we recorded in Vaduz before Covid with Prince Michael). At the last meeting I heard Chris give his analysis of where we are on CBDC, and with it, stablecoins, and asked him to share it with our listeners.
Chris recaps the arguments in favor of CBDC, as well as the risks. He talks about where we are today in the major economies’ CBDC plans; how policymakers are thinking about retail versus wholesale CBDC; the tides swirling around geopolitical developments, including with China; the emerging concerns and solutions regarding protection of privacy; the tremendous growth of stablecoins; and his vision for whether and how CBDC and stablecoins can and should coexist.
The advent of CBDC a few years ago sparked a worldwide rush to evaluate and, in some cases, adopt them (see below for links to our earlier conversations with Chris marking that journey). In the past year we’ve seen great turbulence in the whole realm of digital currencies, stablecoins, tokenization, Web3, and much more. We’ve also seen the meteoric rise of interest in artificial intelligence, and especially generative AI, which arguably has become the top tech development in the minds of financial leaders and policymakers, in some respects displacing some of the CBDC energy. Something to keep in mind is that, amidst all this, the biggest trend underway is actually the convergence of all this new tech — digitized data, AI that puts it to use, blockchains and decentralization, CBDC, and much more. As they flow together, they will produce more than the sum of their parts.
Change comes in fits and starts, ups and downs, but, big change is coming in how we design, use, and even understand, money.
The Honorable J. Christopher Giancarlo served as the thirteenth Chairman of the U.S. Commodity Futures Trading Commission. He was also a member of the U.S. Financial Stability Oversight Committee, the President’s Working Group on Financial Markets, and the Executive Board of the International Organization of Securities Commissions.
Giancarlo is author of “CryptoDad – The Fight for the Future of Money,” an account of his oversight of the world’s first regulated market for Bitcoin derivatives and the coming transformation of financial services.
Giancarlo is co-founder and Executive Chairman of the Digital Dollar Project, Senior Counsel of Willkie Farr & Gallagher and also board director, advisor and angel investor in numerous public and private technology and financial services companies.
Among other recent recognitions, Giancarlo was appointed to the rank of Chevalier in the National Order of Merit by French President Macron in recognition of his expertise in “cryptofinance.”
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It was wonderful to see so many of you at the Singapore Fintech Festival last month! I serve on the board of Elevandi, a nonprofit created by the Monetary Authority of Singapore and now the organization that runs the conference. I believe SFF is the largest financial conference in the world, with over 63,000 people. This year’s event occurred at such a pivotal time in global finance and financial regulation. It’s also special in that it celebrated the retirement of MAS Managing Director Ravi Menon, who in his 12 years at the helm has been one of the world’s most consequential leaders in shaping the world of digital age finance. (Here is my podcast with him from last year.)
In Singapore, AIR hosted a roundtable on NextGenAI — how generative AI will impact consumer financial protection. We gathered input from thought leaders around the world regarding risks to consumers, potential benefits to consumers, and how regulators, themselves, can use AI to protect consumers better than in the past. We also held a roundtable exercise on this topic in Washington the week before with GFIN, the Global Financial Innovation Network. Check out the announcement on our GenAI plans for the coming year, including publishing a paper, a call for papers, and some special events.
We recorded two episodes of Barefoot Innovation in Singapore. One is with Michael Wiegand, Director of the Financial Services for the Poor program at the Gates Foundation. The other is with Kwame Oppong, Head of FinTech and Innovation at Bank of Ghana. We also have a great show coming up with Simone di Castri and Matt Grasser from the Cambridge Centre for Alternative Finance SupTech Lab.
As I record this, I’m nearly finished with speaking at events for the year. My last event – which might occur before we post this episode — is at the Aspen Institute’s important conference in Washington on development of a U.S. national strategy for financial inclusion. I hope to see many of our listeners there.
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