The modern advancements in technology have led to new innovative methods in the banking and payment sectors. This has led to traditional methods being enhanced through digital assets. This session features panels discussing the futures of CBDCs and digital assets, the anatomy of digital securities, and the rising field of decentralized finance and its impact on the banking and payment sector.
The session began with a fireside keynote with Tom Pageler and Lisa Hook on the topic of digital assets and how it has enhanced traditional banking and payments. Tom notes the current success of digital assets with innovative products such as AliPay in the currency market. Tom has a very positive view of the role of digital assets in that it’s allowed new enhanced infrastructure as well as transparency. With more and more industries going digital, he believes that if done properly, enhancing current methods with digital assets can lead to higher profit margins and efficiency. Notably, the public ledger with the digital platform would allow smoother transactions across jurisdictions. While Tom believes that the transition has been going extremely well with governments starting to show support, he also mentions potential risks as well. These can involve fraud related to tracking IDs and IP addresses that need to be taken in consideration.
This panel featured talks about the future of central bank digital currency (CBDC), its biggest advantages, and perspectives on how its adoption will play out. One of the biggest advantages that digital currency offers is its speed and efficiency, particularly between parties internationally. Currently, there frequently exists friction across countries, making transactions both timely and costly. The panel also believes the adoption of digital currency will be a good transition away from cash, which has many inefficiencies such as susceptibility to forgery and criminal activity. The panelists also noted that the transition must be gradual as not everyone is on the internet and simply getting rid of cash as a means of transaction will exclude a lot of people.
Austin Hubbell: “One of the biggest risks of CBDCs is technology risk”
In this session, Blair Wiley shares his experience with getting his business WealthSimple to receive regulatory approval from every securities regulator to offer a crypto trading platform in Canada. He describes the journey to regulatory crypto approval and offers lessons he has learned along the way. Blair has strong belief that cryptocurrency is the future in financial services, but with various fraud cases involving digital assets in Canada, they don’t have the best reputation with regulators. However, Blair believes that it is important to look at things from the perspective of the regulators and understand that regulations want to ensure compliance and offer protection for consumers. The lesson he offers is to go for natural extension to current regulations and stick to their core tenets. Blair also recommends going to regulators with a fully built product rather than just an idea or concept as it gives the impression of better preparation done in the eyes of the regulators.
Blair Wiley: “speak the language of the regulators”
The next panel discusses the concept of decentralized finance – frequently referenced as DeFi – and its significance. DeFi is defined as the ability to create financial services with blockchain technology. This would allow anyone to create applications that enable financial activity to take place without the involvement of a centralized institution. The panelists believe that some factors that contribute to the rise in DeFi is gamification and efficiency. With cryptocurrency, users can now earn interest, and the lending and borrowing infrastructure is also growing. The panelists believe that the future of DeFi will see more things scalable like sports betting as well as moving outside of trading digital assets. Their prediction that 80% of finances will be run on blockchain technology in next 5 years.
The final presentation was a workshop presented by James Wallace about the anatomy of digital assets and securities. James believes that digital securities help build a more efficient global economy and trading system. Some of the benefits that he emphasized are less barriers to entry, more accessibility, less friction across borders, and less compliance and regulations. Also mentioned was its security – There is very low risk with storage and ownership is recorded and verified on immutable ledger. James also showed many charts, one illustrating the substantial costs savings and value creation of digital assets. Digitizing will remove significant costs as well as generate new growing liquidity that should drive the asset value higher.
The future of banking and payments has a bright future with new innovations with digital assets. Digital transactions have benefits of greater efficiency, speed, and accessibility to a wider range of the population. Government support for digital assets helps tackle precautions that need to be taken to avoid fraud and other risks associated with digital transactions. With majority of finances likely to be run on digital assets, it is time to embrace these new innovative methods.
Missed FFCON20 RISE? Checkout the Session Recordings
Co-hosted by NCFA Canada and TFI, below is a collection FFCON20 DIGITAL: RISE keynote talks, fireside interviews, and panels taking place every Thursday at 1:45PM EDT from July 9 - August 27, 2020 at the 6th Fintech & Financing Conference. View the full program
Attendees experience a curated 8 week online event series covering the latest topics in fintech and funding in 2020, and get access to virtual networking with participants, the opportunity to interact and ask questions with speakers and special workshops, virtual socials and surprise content and experiences that are not recorded. FFCON Experience
We encourage you to attend FFCON20 to experience the full show. Having said that, the value and need for education has never been higher and FFCON20 organizers are happy to share this incredible content to advance dialogues and promote the development of the Canadian fintech industry. Checkout what's on this week, or register now
WEEK 1 - July 9, 2020: Scaling Fintech Funding, Innovation and Competition
WEEK 2 - July 16, 2020: Digital Banking (Open Finance) and The Future of Paytech
WEEK 3 - July 23, 2020: Social Finance
WEEK 4 - July 30, 2020: Leadership, Adaptability and Culture
WEEK 8 - Aug 27, 2020: Fintech Draft Pitching & Demo Competition Finals