Key Takeaways from GBBC’s Virtual Blockchain Central Davos
GBBC’s Virtual Blockchain Central Davos took place on January 18–19, 2022, bringing together leaders in the blockchain and digital asset ecosystem to discuss the most pressing developments and challenges in the industry. The conference convened more than 4,300 attendees. Below are the key takeaways from each panel. Access all the Panel Recordings on GBBC’s YouTube Channel.
GBBC will return to Davos for an in-person edition of Blockchain Central Davos May 22–26, 2022!
The Future of Tech-Enabled Sustainability produced in partnership with Powerledger
Speakers:
— Dr. Sami Ben Jamaa, Global Chief Information & Digital Officer, JERA
— Dr. Jemma Green, Co-Founder & Executive Chair, Powerledger
— Ted Katagi, Founder, Kenja
— Steven Witte, Co-Founder & COO, Xange.com
— Moderator: Anastasia Kinsky, Content Lead, Global Digital Finance
The panelists said that the public and government are both crucial in creating the proper incentives for private companies. The public decides what it values and the government is responsible for creating the right incentives to create more sustainable behaviors. Blockchain can be useful for facilitating energy trading and creating provenance of carbon credits.
Speakers:
— Dotun Rominiyi, Director of Emerging Technology, London Stock Exchange Group
— Joshua Wade, Product Manager, Calastone
— Swen Werner, Global Head of Digital Custody and Payments, State Street Digital
— Michael Coletta, Chief Strategy Officer, Fineqia Inc.
— Staci Warden, CEO, Algorand Foundation
— Moderator: Justin Solomon, Executive Producer, Forkast.News
The future of capital markets will involve digitizing and automating existing processes while also reducing or eliminating reliance on single parties. On a basic level, blockchain-based capital markets are more resilient because they are available 24/7. It’s possible to make very illiquid markets liquid using DLT, for example the housing market. One of the most difficult things is articulating why to totally remake infrastructure which is upheld with existing regulations. Regulators and policymakers will have to be part of the movement in order for a G7 economy to adopt DLT in a major way.
“The Future of Money: From CBDCs to Algorithmic Stablecoins,” produced in partnership with Soramitsu
Speakers:
— Makoto Takemiya, Founder & CEO, Soramitsu
— Johannes Duong, Austrian National Bank
— Alan Lim, Head, Fintech Infrastructure Office, Monetary Authority of Singapore
— Simon Chantry, Co-Founder & CIO, Bitt
— Moderator: Eva Szalay, Currencies Correspondent, Financial Times
The future of money could be a coexistence between public and private money. We could begin to see the development of currency zones in which some countries use crypto and others use fiat-based money. While crypto started first, central banks are catching up and making good progress on their pilot projects. One of the big risks is that this is the first time most central banks are offering a product besides cash, these are huge projects with large considerations and a huge amount of stakeholders. It’s an augmentation of central bank responsibilities and creates new risks. Countries with stressed or failing currencies have an opportunity to rethink their monetary policy and perhaps peg their currency to something else, like cost of living.
Risk Mitigation and Security for Blockchain and Digital Assets
Speakers:
- Jyoti Ponnapalli, Director and Distributed Ledger Technology Lead, The Depository Trust and Clearing Corporation (DTCC)
— James Loperfido, Director of Business Development, Tangem
— Jared HG, Founder & CEO, Evertas
— Nikos Andrikogiannopoulos, Founder & CEO of Metrika
— Moderator: Emma Joyce, Executive Director & Board Member, Global Digital Finance
The crypto space brings with it many novel risks that do not exist elsewhere. Decentralization requires some level of consumer control over their private keys, so we need to figure out the right balance between security and user experience. There is still a lot of work to be done and it can be done without sacrificing the philosophical underpinnings of the technology. The greater availability of tooling and data can help reduce a variety of risks. Being part of a blockchain network entails some operational responsibility, technology providers need to get their hands dirty before making the jump from Web 2 to Web 3.
State of Play: Crypto and Digital Asset Regulation
Speakers:
— Alan Cohn, Partner, Steptoe & Johnson
— Hannah Meakin, Partner, Norton Rose Fulbright
— Matthias Artzt, Senior Legal Counsel, Deutsche Bank
— Matt Homer, Executive in Residence, Nyca Partners
— Moderator: Vincent Molinari, Founder & CEO, Fintech.TV
Exchange and custody services are two of the foundational pieces of the industry, the regulations for these are pretty well established at this point. The grey area involves the role of intermediaries, like in DeFi and DAOs, and jurisdictional questions between regulators. These challenges will strain the existing regulatory frame, and the U.S. has to catch up. New York has tried to take a proactive approach but the federal government is behind. DeFi and DEXs will really strain regulations. The difference in regulations across countries makes it hard for companies to get full involved in the space. The EU has taken a more holistic approach to regulation with MiCA, this is not really possible in the U.S. without involving 10 or more regulators. Consumer protection regulators have been surprisingly quiet, not everything has to be looked at in the context of securities and commodities, there are some more basic steps that can be taken.
Speakers:
— David Newns, CEO, SIX Digital Exchange
— Florian Rais, CEO, Criptonite Asset Management
— Tanvi Singh, Managing Director, Credit Suisse
— Dr. Thomas Puschmann, Director, Swiss FinTech Innovation Lab, University of Zurich
— Mathias Imbach, Co-Founder & Group CEO, Sygnum Bank
— Moderator: Catrina Luchsinger Gaehwiler, Partner, MLL Meyerlustenberger Lachenal Froriep
This was a major year for institutions getting involved in Switzerland, with new laws coming into effect that allowed them to offer services in a compliant fashion. The internet revolution was in the comfort zone of institutions because much of the information was coming from traditional channels like investment banks. Crypto has been born from the retail market, which is challenging for asset managers. It is very difficult for institutions to keep up with something like DeFi. Institutions are investigating how to get involved in DeFi, for example how to properly account for participating in a DeFi pool. Switzerland is well positioned to take advantage of this.
Speakers:
— Rapolas Lakavičius, Policy Officer, European Commission
— Peter Golder, Chief Commercial Officer, SIX Digital Exchange
— Bill Hughes, Senior Counsel & Director of Global Regulatory Matters, ConsenSys
— Moderator: Yvette Valdez, Partner, Latham & Watkins LLP
Money is mercenary, so it goes where the returns are; we should prepare for a multichain future. The difference between centralized and decentralized is about governance and one may be more beneficial for a certain use case. The digital future is one in which entire models are digital-native, not reliant on any one person or one country’s laws. The future will involve both centralized and decentralized models, it is trending decentralized, even though most activity in crypto is still centralized. Regulations have not meaningfully slowed things down yet. Regulatory regimes should be focused on intermediaries like exchanges.
Can We Design Better Carbon Markets by 2050?
Speakers:
— Marley Gray, Principal Program Manager & Principal Architect, Azure Multiparty Engineering, Microsoft; Chair, InterWork Alliance Leadership Council
— Paul Rapino, Chief Growth Officer, GBBC
It is difficult to figure out how to achieve goals that are set, the corporate world is moving faster than the government world. The carbon removals market is nascent but it is very important to stabilize the climate. Carbon markets are very siloed, there is not a single market because they are not created in a common way. Defi is a huge opportunity, but it has not been realized yet. Supply creation has to be solved to properly create defi solutions.
Building Better Businesses Through Traceability
Speakers:
— Ingrid Wadell, Director, Product Development, First National Bank of Omaha
— Doug Johnson-Poensgen, CEO, Circulor
— Neil Cohn, Global Head of Markets and Sustainability, Chia Network
— Stan Chen, Founder & CEO, RecycleGo
— Moderator: Paul Rapino, Chief Growth Officer, GBBC
Blockchain enhances supply chains by providing better visibility across the supply chain. Sustainability through supply chains can be used as a driver for top-line growth. Blockchain can be used for ESG reporting, there are many use cases in which blockchain is allowing the sustainability story to be told. Traceability generating better returns has not yet been proven, but forward-looking companies understand that it can provide a valuation around doing good. Improving supply chains can be impactful for companies and consumers.
Vision vs. Reality: What Inclusion Means
Speakers:
— Candace Kelly, General Counsel Stellar Development Foundation
— Irene Arias Hofman, CEO, IDB Lab
— Nisa Amoils, Managing Partner, a100x
— Bernhard Kowatsch, Head, United Nations World Food Programme Innovation Accelerator
— Moderator: Andrea Tinianow, Chief Legal Officer, IOV Labs
We need to make sure the solutions that we are providing people are solving their needs. Private key storage should not be complicated for the user. The technology can be the easy part, it’s harder to get stakeholders to buy in and onboard individuals who are not familiar with the technology. There are some projects that are already up and running; it is possible to scale very quickly after initial pilot projects. It is especially easy when financial institutions reimagine their role and get involved with blockchain-based payments systems. However, the beauty of blockchain and open networks is that anyone can build on them.
Building Blocks: Applications for Better Business
Speakers:
— Daniela Barbosa, Executive Director, Hyperledger
— Alan Vey, Founder & CEO, Aventus Network
— Duncan Johnston-Watt, Co-Founder & CEO, BTP
— John deVadoss, Founder & Head, ngd Enterprise; Fmr. Microsoft
— Moderator: Stephen Aschettino, U.S. Head of FinTech, Norton Rose Fulbright
A few years ago, blockchain had a ton of hype and adding it to anything made people excited. Now, there are a lot of real projects being built on the technology. The enterprise and public blockchain spaces have grown separately and are rather different at this point. Blockchain is the first economic layer for the internet, so you do not have to align business and IT, they are automatically aligned. It’s unclear whether CBDCs and stablecoins can coexist, regardless it will be one of the most significant disruptions of recent years; will be able to program money. Open-source technology bring companies and organizations together to create something special.
Speakers:
— Sophia Mahfooz, AI Foundation
— Mina Sharif, Afghan Activist and Media Producer
— Rahilla Zafar, Documentary Filmmaker of Minter
— Heidi Pease, GBBC Giving
Afghans are entrepreneurial people and have been very resilient in the face of disruptions and difficult times. However, people who have been able to leave have left, and it is hard to know how the next generation will succeed. In the past, humanitarian aid has provided immediate relief but can also break down systems in the country. The global community owes the country support, and it can be done with Afghani management. Aid work can be done through grassroots efforts and give them ownership rather than international organizations. It is hard to operate because of sanctions, but it is possible to empower people and change the narrative so people know refugees and other marginalized populations have a lot to offer.
“Building Next-Generation Market Infrastructure” produced in partnership with Copper.co
Speakers:
— Boris Bilowitzki, Chief Revenue Officer, Copper.co
— Andre Portilho, Head of Digital Assets, BTG Pactual
— Talia Klein, Director, Digital Asset Custody, BNY Mellon
— Tanya Shastri, Vice President of Products, Blockchain, VMware
— Moderator: Geoffrey Goldman, Partner, Shearman & Sterling
Traditional financial institutions are moving relatively quickly right now, including on the post-trade side. These areas are perfectly suited for blockchain technology. The crypto space is largely being built by tech people, who generally do not understand finance. Collaboration is extremely important; we have to bring technologists and finance people together. It’s possible we won’t see a big disruption all of a sudden but a slow adoption of blockchain into various market infrastructure areas. Smart contracts can create a new paradigm for a variety of assets, regardless of your beliefs on DeFi or crypto. Updated market infrastructure can vastly simplify complex multiparty transactions, eliminating errors and data reconciliation requirements. A lot has to happen before we get to a world where everything is smart contracts, people are probably underestimating the timeline.
Speakers:
— Scott Lucas, J.P. Morgan
— Mathew McDermott, Goldman Sachs
— David Newns, SIX Digital Exchange
— Yuval Rooz, Digital Asset
— Michael Wagner, Oliver Wyman
— Moderator: Eva Szalay, FT
Financial systems of tomorrow should allow collaboration between competitors and market participants. This will create new economic concepts, there is an opportunity to make things more efficient. This will create new capital flows between stakeholders as well as countries. There is nothing to compete over if there is nothing created yet, collaboration is necessary to get to the place where competition is possible. However, there are many markets where this technology is already driving significant value. In recent years there has been heavy investment of time and resources into blockchain technology, this may be partially driven by the appreciation of cryptocurrencies, but it is creating significant progress. People want choice, but choice between assets right now is expensive, blockchain can make it cheaper to access more assets. Regulators have begun to realize the transformational potential of the technology, and some countries are allowing for more innovation.
“CBDC: Preparing for the Future of a US ‘Digital Dollar’” produced in partnership with Accenture
Speakers:
— David Treat, Global Blockchain and Multiparty Systems Lead at Accenture, Chair of the Board of Directors of GBBC and Co-Director of The Digital Dollar Project
— David Kretz, Managing Director, Head of GTS Global Strategy and Payments at Bank of America Merrill Lynch
— Catherine Gu, Head of CBDC at VISA
— Jennifer Lassiter, Executive Director of The Digital Dollar Project
There has been a shift from research to countries beginning pilot projects, the majority have been focused on wholesale. This informs them about whether it would make sense to issue a retail version. Retail CBDCs represent a new form of money, the digital version of cash. There is no one size fits all CBDC, it can be looked at as a product and needs certain design principles to be successful; commercial bank readiness is crucial; it should be a developer-friendly ecosystem; merchants need to adopt it. Privacy will be one of the most important conversations going forward. We haven’t paid enough attention to the different roles to be played across the architecture. Consumer adoption is one of the hardest problems to solve, there is no way to really know if consumers will use the product.
Speakers:
— Michael Moro, CEO, Genesis Global Trading
— Ambre Soubiran, CEO, Kaiko
— Mary Beth, EVP Americas & Global Chief Legal Officer, Merkle Science
— Daniel Peled, Founder & President, Orbs
— Nicolas Bertrand, Fmr. Head of Derivatives Markets and Commodities, Borsa Italiana
— Moderator: Joseph Hall, Cointelegraph
The future of finance is likely decentralized, but this doesn’t mean that traditional financial institutions will not be able to participate, they should treat it as an opportunity. It may blend into just “finance” as the decentralized and centralized areas converge. Finance has historically lagged innovation, but hopefully the push of defi will force innovation. Education will be important so that more people are going to be able to join, the one that is best able to do that will win the defi race. At this point there is a trade off between speed/scaling and decentralization; we do not know who the winner will be, there will probably be more than one. You have to be relatively tech savvy to use defi right now, institutions have also not really gotten involved yet.
Blockchain and the Future of Commodity Trading
Speakers:
— Omer Ibraham, Director, Business Development, LiquidX
— Jeanine Hightower-Sellitto, CEO, Atomyze
— Andrew Pisano, Head of XRegistries, Xpansiv
— Amanda Martinez, President & CEO, Artemis Technology Group
— Moderator: Jeff Bandman, Co-Founder, Global Digital Finance
There is a lack of access to current assets, blockchain technology can help to solve these problems by creating efficiency and transparency, as well as digital ownership of physical material. There have been some high-profile failures in the commodity space, which has led people to move away from it. DLT can be used to help alleviate these concerns and provide greater information across the marketplace. This would bring capital back to some regions of the world that have suffered from the fear of commodities. It would also help small and medium size investors enter the market, further improving liquidity and pricing. The new technology will allow people to do something different, institutions should do more than just copy and paste existing systems to DLT.
Speakers:
— Brian Brooks, CEO, Bitfury
— Tanya Woods, General Counsel & EVP Regulatory Affairs, Hut 8 Mining
— Jerry Tang, Co-Founder & CEO, VCV Digital
— Emma Todd, Board Member, Tokens.com
— Moderator: Jo Ann Barefoot, Founder & CEO, Alliance for Innovative Regulation (AIR)
The global semiconductor shortage is a big deal, it makes it harder to build out mining sites. There is one company that dominates the space. It’s also worse for the environment when people use old equipment because they are less efficient. Partnerships will continue, now it is time for miners to communicate with government and stress the opportunities that are available. These conversations are expanding in a pragmatic way, leading to more partnership and innovation. There is lots of interesting progress happening in South America. The Middle East has cheap power, and the governments there are very interested in getting involved. Some companies are hesitant in moving mining operations in non-first world countries because the equipment is so expensive. There is a trend of consolidation among miners, though it is hard to raise capital through these transactions. Bitcoin is a more efficient creator of value than the traditional banking system when you look at market cap divided by energy used. Mining can consume excess energy and make solar farms more popular.
A Fireside Chat with Charles Hoskinson, Founder of IOHK
Speakers:
— Charles Hoskinson, Founder, IOHK
— Joel Telpner, Chief Legal Officer, IOHK
Transparency, globalization, decentralization make systems more resilient. Everybody sharing means that innovation moves much more quickly. This is one of the first technologies where many people across the world are finding out about it at the same time and have strong opinions on it. People in the industry are young, and they tend to discount or undervalue regulation because they don’t see the need for it. The industry is good at research and building, but it needs to step up and engage with governments instead of treating them as the enemy. Stablecoins have been some of the worst actors in the crypto space because they pretend that they’re decentralized when they are actually custodians. For fast moving industries it’s best to create self-regulatory organizations (SROs), 75 to 80% of regulation should be done by SROs. There are many conflicts of interest and lack of ethics in the space right now, with people advertising tokens they own a stake in; this can largely be addressed by SROs.
“The Future of Investing and Crypto” produced in partnership with Algorand
Speakers:
— Steve Kokinos, CEO, Algorand
— Anthony Scaramucci, Founder & Managing Partner, SkyBridge
— Matt Zhang, Founder & Managing Partner, Hivemind
— David Siemer, CEO, Wave Financial
— Amy Luo, Partner, DIGITAL
— Moderator: Jane King, CEO, LilaMax Media
In 2017, much of the initial excitement was driven by retail, this has changed now. Bigger brands and larger institutional investors are entering the space. Many institutions are curious but are scared or skeptical about entering; we are very early. Big institutions do not want to be embarrassed, they do not want to be too late or too early. The biggest challenge is not education but regulatory clarity; we need governments and regulators to be more supportive and allow innovation in the right way. This is the hardest asset class to enter and understand, and it is still largely retail. It has gotten a lot easier for smaller institutions to enter the space lately, especially with the emergence of DAOs, which allow people to invest together. Founders have also gotten savvier and don’t just want capital, they want to know what investors bring to the table. Fashion will be a new area of the metaverse, as well as the intersection of NTFs and defi. Kids understand this space intuitively, they will branch out from games into other things like concerts and other activities.
Hedera and Microsoft in Conversation on “The Metaverse and Enterprise”
Speakers:
— Mance Harmon, Co-Founder & CEO, Hedera
— Yorke Rhodes, Director Digital Transformation, Blockchain, Cloud Supply Chain, Microsoft
— Moderator: Alissa Worley, Global Marketing Director, Accenture Security
The metaverse is a fundamentally new way to interact without the need for trust or a third party. It has become prominent because of the new UI focus, people thought of it as VR and AR, but the metaverse has already been being created and predate VR and AR. There are a lot of enterprise use cases as well. The concept of digital ownership is relatively new. Digital ownership and the metaverse necessitate blockchain technology and its trustless features. It takes a lot to convince large Web 2.0 companies that Web 3.0 is necessary for the metaverse. Many corporations are looking to improve ESG, and thus improve their tracking and tracing in supply chains; they need greener blockchains to do this. To bring corporations in, you have to make it easier for them to get involved, for example bring it to where they are, in Microsoft Teams or Zoom, rather than requiring them to wear a VR headset.
Speakers:
— Marta Belcher, Chair of the Filecoin Foundation and the Filecoin Foundation for the Decentralized Web
— Paul Brody, Principal & Global Blockhcain Leader, EY
— Jason Hsu, Senior Research Fellow at The Ash Center for Democratic Governance and Innovation, Harvard Kennedy School
— Moderator: Dr. Kristi Yuthas, Founder, Business Blockchain, Portland State University
We experience so much of our daily lives in Web 2.0 through a handful of large corporations, we have no choice but to trust them. You realize how centralized the internet is when there are blackouts on one of the three large web services. Web 3.0 could be used to create a better internet by decentralizing it, allowing websites to stay up even in the event of failure. We are making a lot of good progress because people are experiencing the centralization of the internet in their personal lives. Web 2.0 is a natural monopoly that results in centralized structure. It is really hard to build decentralized systems, especially when it has to outcompete centralized systems that are really fast, but not resilient and robust. Part of the success has to come from improving developer tools for decentralized systems. We need to rethink privacy, security, and centralization; government is falling behind the evolution of data. The web is changing constantly because of the data that is being input; the law must have greater flexibility and more regulatory sandbox environments. Web 3.0 allows owners to delegate their voting rights to someone who is keeping track of voting proposals, you can delegate to organizations that agree with you.
The Consumer and the Creator: Entering the Metaverse
Speakers:
— Heidi Pease, CEO, PoA Studios
— Andrew Kiguel, Co-Founder & CEO, Tokens.com
— Justin Banon, Co-Founder, Boson Protocol
— Alex Blagirev, Deputy CEO, Sensorium
— Pablo Martins, CEO, STHORM
— Moderator: Karen Korponai, GBBC Ambassador to Bolivia; Founder, Konscious Konsulting
We are building towards a digital realm that could be a twin of our reality or a thing that could only exist in the metaverse. The backbone of these metaverses will be built on blockchains, with cryptocurrency and NFTs. Institutions are increasingly experimenting with the metaverse, in large part due to the pandemic. Blockchains and NFTs give strong digital property rights that cannot be removed, items in existing games can be deleted and do not really belong to the user. Fashion brands, luxury automobile brands are getting involved in the metaverse as a way of advertising. The ownership aspect that blockchain brings is what makes it invaluable and gives it the ability to grow. The metaverse can be used for education, even in higher learning, allowing people to learn and teach across the world. All brands will need to have a presence in the metaverse to keep pace; NFTs and the metaverse have proven to be the leader in mass adoption. Once people realize there is money to be made they will flock to the metaverse.
