Digital Currency Strategies of Central Banks | Andreas Veneris

Central banks are reaching beyond legacy financial systems into the digital world to embrace new technologies and systems.   Most central banks have initiated projects on adoption of blockchain in CBDC. 

We dive into this prominent use-case with Computer Engineering Professor, Andreas Veneris of University of Toronto.  He has been in the digital asset space for over 14 years and commissioned by several central banks in different nations to advise on technical, legal and economic angles of a nation’s proposed digital currency. 

Transcript

Lauren Weymouth: 00:08 I'm Lauren Weymouth and I lead Ripple's University Blockchain Research Initiative for over six years, the UBRI program that supports universities worldwide to educate, adopt and innovate in blockchain. In this podcast All About Blockchain, we explore what current problems blockchain solves for across various industries to better understand this groundbreaking technology. And I love to dive into how it's helping all different sectors be more efficient. But today, we're going to focus on cryptocurrencies. Probably the most prominent use case of blockchain and the best well-known. More specifically, how central banks are adopting digital currency strategies. We're joined by computer engineering professor Andreas Veneris of University of Toronto who has not only been at the front and center of digital asset space for over 14 years but has been commissioned by several central banks in different nations to advise on technical, legal and economic angles of a nation's proposed digital currency. Andreas, welcome to All About Blockchain.

Andreas Veneris: 01:08 Lauren, thank you for having me here. We were, like, next door, next having a glass of wine doing that but it's always nice to see you and hear you.

Lauren Weymouth: 01:19 Okay. So before we dive into everything, I did a little peeking around about you online and I see that you have awesome Rate My Professor ratings. Is that something that professors care about?

Andreas Veneris: 01:29 Yeah, I, I, I, (laughs) it's funny that you said. And yes, e- every year too I go and see how my ratings are. you can read funny stories you learn out of this thing. But yes, I do care actually.

Lauren Weymouth: 01:48 Well it made me excite, right, 'cause not only am I talking to someone or bring someone on to the show that has deep, extensive knowledge and experience in the subject matter but his students really appreciate him and like him and enjoy going to his class. that means this show's gonna be a good show today, right?

Andreas Veneris: 02:04 it's part of our job, right? We're not lawyers. we're not, doctors paid by the operation by the hour. We get the flat rate. Uh, part of what we do is, like, to motivate the young people. every day is the young people that gonna do the research and advance the world. So it's not about the knowledge, it's about ethics, about how to see the world. you do care for your students like my case that I know a lot of other professors feel like this being their, uh, extended family, right?, going to the classroom, you feel like an actor. you lost, like all your money that day or somebody passed away, you're going class, you have to smile.  you're on the theater, you have to give that energy.

02:45 And then coming out of the class, you do feel tired because you have some, uh, emotional reserves that you gave to the people. So it's, it's, it's a very big part of what we do in academia.

Lauren Weymouth: 02:57 Wow. I never thought of it that way. Well, now today, we all get to be in your virtual theater experiencing your show. let's start of with you telling us how you first got involved with cryptocurrency.

Andreas Veneris: 03:09 I'm a bit ancient. I started of Bitcoin in 2010 and start getting it more serious about Bitcoin around 2011.in 2012 I got to know about David, your CTO about times he was hacker and, well-known in the crypto communities, whatever, was, like, crypto community at that time. in 2013 I start going to Ethereum meetups here in Toronto. I got to know Vitalik and Charles from, Cardano and,Lubin from, Consensys and Anthony Di lorio  These were, like, underground pizza meetups, right? Uh, we're, like, putting money together to buy the pizza right? It was very interesting, uh, day.

04:02 So in 2013 and 2014, We, participate in a [inaudible 00:04:09] in very foundations of Ethereum if I can say. Uh, we're not writing code. It mostly debate and speaking about what Ethereum is and so forth.I've sent you my photo in 2014 that I was outside Mt. Gox, uh, with my six-month-old daughter the day that it pretty much went bankrupt. That's my, uh, (laughs) famous picture. and then around late 2016 I start getting interested about what is central banks we're doing at that time. Bank of Canada was coming to Ethereum meetups believe it or not. They had, they know those guys at that time but they were coming to those [inaudible 00:04:57] to hear what was going on and it was around 2014, 2015 that they start doing pilots.

05:06 Uh, the, the word CBDC, central bank digital currency didn't exists, the term at that time, Bank of Canada started publishing,, white papers or reports about the project that we're doing. [inaudible 00:05:20], I think [inaudible 00:05:22] the first one in 2016. And that was very interesting. So around late 2016, early 20- 17, I start getting involved with, uh, CBDCs and talking to more and more central banks. very exciting because this is the other side. Although this are not cryptocurrencies, at the very end, they a lot from what has happened to world of blockchain, right? Let's be real about that., and that's how things rolled over and  as I say to come to put this, uh, question and the answer to a close, you know, I have a wife and a mistress.

05:57 my wife is my research group that would do quite a bit of stuff of, uh, on blockchain, research. And the mistress is CBDCs, that worked with a lot of colleagues and also a couple of students, uh, from a research group. so a little this world and, and it's particular exciting,, of what's happening and how it has transformed because I've seen, I've seen the transformation.

06:21 It was not easy you- to, to conclude or getting ridiculed in 2012 and go as they did for talking about blockchain. They will call you a dummy. This the same database, there's nothing new. And guess what now, (laughs) now you have government white papers, uh, citing Satoshi Nakamoto, right, or citing what the guys at Ripple have been doing for, like, over 10 years. So it's got funny how things turned around to be 2024.

Lauren Weymouth: 06:48 Well, it is funny because for those who don't know all these big names Andreas is citing, some of the founders of the biggest blockchains, right? Ethereum, XRP, XRP Ledger, Cardano. so really you were there at these meetups. And you're also pointing to one great way to get to know and better understand this tech is to go to meetups in your local regional area. they're pretty much in every city all over the world. I mean, you, you had a chance to meet some of the heavyweights of today but maybe there are some people there now that are just starting out, they will be in five years the next big blockchain or the next big, uh, [inaudible 00:07:21].

Andreas Veneris: 07:24 So le- let me comment about that. That's very interesting. And I, I fully agree. I mean, that's how I built my knowledge that I start reading. You know that back in the '80s, I was involved in the music industry, right?, and it all started within metal. Actually, you can still find my, James Hetfield, video interview, right, from 1997 at YouTube. it's got funny because this started by me writing letters to Metallica in 1983 and then writing letters to Exodus and all those guys. And the '80s rolled out and by '87, boom, Metallica was selling, like, 10, 15, you know, copies worldwide.

08:03 And even the Poisonous and the Mötley Crües was the underground. And the underground in the early '80s was supported by fan signs, people that were publishing their own magazines, Xerox, uh, and then you will all selling it around the world by mail.that's a funny story. (laughs) We used to put glue on the stamps so when the guy was getting the package, we'll return back the stamps to me when he was replying. Then, I would take some water and take the glue out and reuse the stamp, right? That was underground. That's how Metallica started.

08:39 And fast-forward with the blockchain, you know, those meetings that you're speaking about gives me exactly the same sort of underground feeling, people that have believed that something new can start out of these, something more fair, something more equitable., and that's part of what I loved from this scene, you know, like the passion of people I have to bring this kind of, like, energy together in those meetups.

Lauren Weymouth: 09:07 and out of those meetups you were seeing, you know, some of the central bankers then you didn't realized they were central bankers because-

Andreas Veneris: 09:13 No, not at all, yeah.

Lauren Weymouth: 09:14 Right, because we're starting to see more mainstream testing and redesigning of physical cash. So the question is, 

Lauren Weymouth: 09:34 . Why would a central bank issue a digitally native fiat money? What are the advantages of that?

Andreas Veneris: 09:38 Uh, there's a, there's a multitude of advantages, right? Uh, uh, for, for us to answer this question, we need to find out how money is getting distributed today in the world. So the central banks print the paper money and they print also money that they give to the banks, the private banks or the banks and distribute to the public. And, in this manner, they can create credit, they can give out loans, they can give out mortgages and so forth. That's what moves the economy, right? So the private banks have reserve accounts with the central bank and that's how payments are done and overnight their balances are getting settled through the central bank overnight and then the next day begins.

10:24 Now, you know, money has changed already. Like, literally speaking, the audience should ask, what was the last time they used a $10 bill? And most of the guys are gonna say, "Oops, I don't even have a 10 dollar bill in my wallet, right? I only have credit cards." So money has changed its role in our digital society today. Well, with this, within this picture, central banks can become obsolete.  The mandate of central banks is to advance prosperity of the economy for the public. The role of the private banks is to pretty much offer more to the shareholders. So it's like black and white what those two guys want, right?

11:11 So we are now in the phase of how money has evolved. The central banks can become obsolete. Then that's one reason, right? They need to modernized the physical cash, right? They need to modernized in this digital world. Now the second thing is because digital payments have pretty much evaded, like, we're risking the possibility. And that was very big when Facebook came out with their idea to to issue the, Libra coin, right? Diem it was called later.

11:49 Imagine a situation that every U.S. citizen is using Libra, class Libra 2 or Libra 3, three private coins. And those coverage get to know the data. Uh, and what is the role of the Federal Reserve and accounts to protect the citizen, uh, against this, right? It can be a digital coupe, a digital money coupe, right? So central banks need to be able to provide anonymity and provide security to the public. And this gets even worse.  imagine everybody in Canada using Diem or everybody in Canada who have,big Asia population using WeChat or using Alipay or Kakao Pay from Korea, this kind of implications to tax evasion, uh, data from Canada is gonna be going to our friends in the U.S. or China or Korea, these has major implications to a, a nation's sovereignty, right? and some banks need to protect the public out of these. There's also other reasons like public inclusion, public prosperity, social welfare, yeah, there are a lot of stats out there, like, explain how CBDCs can promote social welfare. There's monetary policy that can implement monetary policy. Like, look what happened with COVID, the Fed was issuing checks. And what was happening, the checks were going to the private banks.

13:23 And if you have issues with  that bank because you, all the money, they will not give you the check, that will it keep from them , the Fed could do nothing, you know, to send the checks, cannot cash the check. Now imagine a situation that the Fed directly can deposit that money to your wallet. So these has big implications for a monetary policy, it has big implications with fraud then AML and CFD, other money laundering and combating the financing of terrorism. And then this is not an only inclusive but a very last thing is CBDCs today, they have their two types of CBDCs. They're like the retail CBDCs which the CBDCs that go to the public and the wholesale CBDCs now there between the several bank and the private banks.

14:10 But there's also the cross border aspect, uh, that when CBDCs from different countries start talking to each other, then you can have cross border transactions. These transactions today are very, very expensive. Uh, actually, the poorer the country is the more fees those guys, uh, to do a transaction, right, and these prohibit social welfare, especially for countries that needed more if you think about it, right? on top of that, the United States weaponized Swift] as we saw recently with, Russia. the BRICS, the Brazil, Russia, India, China, so forth are developing their own CBDCs system for cross border transactions. There's a long, long, long 30 list of, like, benefits for introducing CBDCs.

Lauren Weymouth: 14:57 All right. We got a whole handful of lessons from you there, right, from financial inclusion to modernizing to avoid becoming obsolete, uh, to helping with anonymity and security. Um, and you even been touched how it could provide new capabilities during a global pandemic. What about in extreme situations like a financial crisis?

Andreas Veneris: 15:21 . I mean, we had the financial crisis when COVID happened, right? Like, you saw this top [inaudible 00:15:33] going down, like a 30 month, like 15 or 20%, whatever that was. CBDCs will also help these current situations that can pipeline the government, can pipeline money directly to the individuals. you don't want this money to go waste. Like, if you give money for social welfare, we don't want this guy to go buy cocaine or heroin obviously, right? We want him to buy food, uh, to help the economy instead, the economy or other public goods that promote the economy, right? So there are scenarios like that that CBDCs will help. And today, central banks cannot do that.

Lauren Weymouth: 16:15 yeah, today's central banks cannot do that.It creates new monetary policy tools that are currently lacking.

Andreas Veneris: 16:29 It creates a lot new tools. And, and the work that you guys have done at Ripple for, like, 12 years now and the work that Ethereum did and Bitcoin of course started was a motivating factor for all these to a very large extent. Like, central banks didn't know what these, like, currency was until 2013, 14, [inaudible 00:16:49] said wow, they start taking seriously what was going out there with those initial projects.

Lauren Weymouth: 17:01 Yes. Um, okay. So a- and beyond, you know, your academic and, and researching CBDCs and looking at it from all different angles. In 2020, you were commissioned by the Bank of Canada to examine the digital loonie. We even have you on stage at UBRI Connect last year, the leading blockchain academic industry convening during a fireside chat. Um, so there's so many things to think through here. Uh, regarding the cross border interoperability that you just touched on, um, and considering regulatory differences between different economies, different countries, how long do you think it will take to achieve true cross border CBDC interoperability?

Andreas Veneris: 17:36 that's a very good question actually. Right now, there not too many deployed CBDCs out there. The one that has... I mean, leaving Nigeria and leaving The Bahamas out as these are not very large or very important economies. Nigeria of course is very important for Africa. The only CBDC that has been deployed and not fully, fully deployed is this of China, the electronic yuan. However, we see that India is already doing public pilots of their CBDC,, limited scale of their public pilots. India has done an amazing job with the UPI system and the other digital ID in the last pretty much 10 years. Amazing adoption.

18:32 Uh, Brazil was about to release their CBDC by the end of this year but they delayed it because they had some issue with the private sector. But Brazil has released the Pix system, fast payment system which has an amazing adoption. So, and I know the guys from the Ba- Bank of Brazil. They have very strong understanding of CBDCs. Russia is about to release their CBDC. They've done public pilots. Uh, and other members of the BRICS, they're at late stages, including Iran, United Arab Emirates, they're at the late stages of their pilot with CBDC, right? The European Union has said that by 2026 they're gonna have public pilots of the digital Euro.

19:18 So having said that, I already told you more than 50% of the world's economy right there-

Lauren Weymouth: 19:21 (laughs)

Andreas Veneris: 19:22 ... right?

Lauren Weymouth: 19:22 Yeah.

Andreas Veneris: 19:22 Uh, maybe over 60%. I would suspect that there's already very strong active cross border pilots between CBDCs. These are called mBridge with the participation of, the People's Republic of China, Hong Kong, whatever authority, United Arab Emirates. And I think Bank of Thailand is the other participant. And this project has been going off for the last three years. The Fed is an observer to this project along with many other central banks. So before we have cross border within to that CBDCs, so if I have to predict by the end of this decade, for sure we're gonna have cross border CBDCs and by the 2026 the CBDC arena is gonna be different to today with more countries operating public, not pilots but operating the CBDC maybe in a limited format. These are critical systems, right? It's not like, uh, Ethereum that, uh, somebody steals like [inaudible 00:20:23] endorse and with that it comes out and says, "Oh, I'm sorry. We're gonna fork it."

20:27 Uh, imagine what's gonna happen if there's a hack in those systems. Uh, the, governor of [inaudible 00:20:34] can go down, the politicians can go down. These are very critical systems.

Lauren Weymouth: 20:39 Yeah. And you've just, as you said, given over 50%  of world GDP examples of countries that are i- at least in pilots. So this is moving forward. It's not just a conversation at this point. what role our international organizations like the IMF and World Bank playing in this?

Andreas Veneris: 20:54 very good question also.all of them have groups. We're talking about the Bank for International Settlement, which is the central bank of all central banks, based in Switzerland, and then is the IMF and then the World Bank. So the BIS is, like, the absolute leader by far. two years ago, they announced, uh, the so-called BIS Innovation research centers. They already had two in they and another four, one in England, one is Sweden, the other Hong Kong and the other Toronto. I'm involved with this one in Toronto. Um, and the BIS Innovation Hubs are doing tremendous work on pilots CBDCs.

21:46 In fact, the BIS is the golden standard when it comes to central bank digital currency because that's their bread and butter. It's like the place that all central banks go to have coffee and chat with each other basically, right? they have also the, CPMIA group [inaudible 00:22:04] payments, which is very active.the IMF also is following the BIS. they're not implementing pilots themselves but their participating a lot of pilots to provide advice. they announce, like, last year they're gonna be offering the CBDC handbook. They've done an amazing amount of work on publishing those CBDCs.

22:29 Now the World Bank has a much smaller group of people and they're focused mostly not on publishing but assisting because that's how the World Bank operates, assisting, emerging in other develop economies, into their knowledge of CBDCs, right, both technically and also by giving advice. Because the World Bank, that's their niche, 

Lauren Weymouth: 22:53 It's fair to say they're all actively involved. They have centers and advisers and they're publishing on the topics. So they're focusing on it. They're-

Andreas Veneris: 23:01 More than 90% of central banks around the world are experimenting with CBDCs-

Lauren Weymouth: 23:07 Yup.

Andreas Veneris: 23:09 ... or run pilots.

Lauren Weymouth: 23:11 Okay. And earlier you mentioned, you know, there's two kinds of CBDCs. There's retail and there's wholesale. Recently, we just read that the Bank of Canada announced that they're steering away from retail. Uh, what do you think they made this announcement?

Andreas Veneris: 23:24 Okay. So I've been working with the Bank of Canada and working means, you know, I'm, I'm, I'm in my capacity as a professor of the university, of course, for, uh, many years, for over five years. And, and Bank of Canada is [inaudible 00:23:39] two of three banks, central banks and their other study of CBDCs. Because they study very early. They study the same time that the People Bank of China did their CBDC work in 2014. So CBDCs are political tools. When I say political tools, I mean, it was Trump last January that came out and said, "If I get elected, I will make sure there's no CBDC." Right?

24:08 Uh, there's another bill that, that advanced to ban CBDCs altogether in the United States. In Canada, you have Poilievre which is the conservative leader and polls today give him the lead if we had an election. Poilievre said very similar to what Trump says that, "If I get elected, forget about CBDCs. These people, they gotta track you, the government's gotta track you." 

24:42 So this are political tools. And essentially, we need to realize and you guys at Ripple know firsthand that private banks make a lot of money out of payments. And not [inaudible 00:24:57] only make a lot of money out of payments but now we have a new lollipop which is the data. So nobody that get the money but they get the data and data is the new oil, is the 21st century oil. You know how important data is.

25:12 . You know, we don't have your executives here but I'm sure that they have an easy time talking to the [inaudible 00:25:20] more than Goldman Sachs of the world. I see you smiling and not commenting. But anyway, this is my speculation, okay? So if anybody has a problem, come to me and I'll discuss about it. So the same thing happens now with the central bank, you know, because those private banks, they have strong [inaudible 00:25:37] and obviously they don't want CBDCs because CBDCs is gonna eat from their lands and not even lands from their cash cow lands, right? So they're political tools. And to close about the data, what I was saying, it's, it's kind of, like, an oxymoron and a paradox at the same time that those politicians come out and say, "Oh, CBDCs, they're gonna track everybody."

26:08 cryptography can guarantee that, you can build a system and also prove to the user that nobody is, like, spying [inaudible 00:26:21], right? And the central banks definitely they don't want to spy people because it comes with a lot of liabilities., politicians, like, go out and they give this type of rhetoric, why those guys don't promote legislation to help us against the data that we give for free to the Facebook, Google and Alibabas of the world, right? They don't do nothing. that's the crossroads that we had today. So going back to Bank-

Lauren Weymouth: 26:51 Yeah.

Andreas Veneris: 26:51 ... of Canada why they said so, I guess the governor took that decision with the deputy governor. what happened behind the scenes I can only speculate.

Lauren Weymouth: 27:02 So it's sounds s- s- a political decision. Sounds like a political decision.

Andreas Veneris: 27:05 If you, that's my personal opinion. I have to be very clear that, yeah.

Lauren Weymouth: 27:10 Okay. But the a-

Andreas Veneris: 27:11 So they put it, they put it on pause. They didn't divert. They have a lot of knowledge. They put it on pause and I know for sure that they redirected the personnel that was involved in other fintech payment projects.

Lauren Weymouth: 27:26 that might also lend to why other countries are having challenges adopting a CBDC or even establishing global CBDC standards 'cause it's beyond technical factors or differences. It could also be-

Andreas Veneris: 27:40 Uh.

Lauren Weymouth: 27:41 ... political wealth.

Andreas Veneris: 27:42 . The only two countries that resemble what you show is Canada is number one, we, we can be the United States of that the Feds said, you know, "We're exploring it but we don't have to issue CBDCs and so forth." And if you ask me, is the political lobbies behind it? And then the other one is England. Uh, England actually is not as bad as Canada or the United States, right?, I think Europe like Lagarde and, pretty much said by 2026 we're gonna have public versions of CBDCs, not fully deployed. So if the European Union does CBDCs, it's a matter of time that England's gonna do and then Canada's gonna follow. And then just like,, Donald Rumsfeld said, "If you're not with us, you're gonna be forced to be with us."

Lauren Weymouth: 28:45 (laughs)

Andreas Veneris: 28:46 So that's how it's gonna play out but it's gonna take some time.

Lauren Weymouth: 28:49 All right. Just because you brought the United States in, I've gotta mentioned that you worked tap for your expertise in digital assets and with other leading academics on the Hoover Institution's classified report on digital currencies that I believed is what prompted, the White House, Joe Biden designed an exact order. Uh, following recommendations of that report, can you tell us about that experience and where you think the U.S. is going today?

Andreas Veneris: 29:12 that was an honor to be part of this report. It was report that, uh, start getting put together in early 2021 by  a big, list of prominent thinkers, thinkers from the United States, people that work for the Fed and CFDC, academics and so forth, all Americans. So in that report I had very early access and I was able to, uh, provide a lot of commentary and that's why my name is acknowledged. That report focused on two things. It was [inaudible 00:29:53] analyzing the Chinese DCP. That's how it was called at that time, the electronic yuan.

30:02 Uh, China started doing research on, on their digital currency around 2013. Uh, so this report did an amazing job explaining how DCP works. And then it was setting the case why the United States has to release also a CBDC, right? and also other aspects of how cryptocurrencies and digital assets in general, why they're important and how that should be regulated. But mostly what why they're important maybe 21st century. And that report was released in, uh, March 1st or 2nd, March 1st I believe of, uh, 2022. And then the week after, uh, Joe Biden, President Joe Biden signed the executive order of digital assets. That was pretty much incorporating accommodations of that report. But unfortunately since then, I, that's my personal opinion. I think private lobbies in the United States and that's saying that, uh, it does work to capitalize on digital assets and that's what we are today.

31:08 it took, like, seven years of the United States to wake up and say, "Oh, damn, I need to do (laughs) something about the Wild Wild West out there, right?" I agree there has been regulation but going out guns and shooting everything you see in front of you, it's not the proper way to do policing.

Lauren Weymouth: 31:38 Yeah.

Andreas Veneris: 31:38 Um, when other countries were able to introduce especially Switzerland has legislation around from, like, seven, eight years ago. Uh, and I think that's a big problem in the United States right now, right?

Lauren Weymouth: 31:52 Yeah. I mean, unfortunate without clear regulations, it's very harmful to innovation and businesses.

Andreas Veneris: 31:57 Yeah. You don't know... You know, how do you innovate if you don't know what law regulates you and how.

Lauren Weymouth: 32:04 Okay. So you've been in tapped in Canada and the United States. Are there any other adviserships to national banks or, settlement s- uh, [inaudible 00:32:12].

Andreas Veneris: 32:11 I communicate with a lot of central banks and I communicate a lot with the BIS and the IMF. More recently, like, two, three weeks ago, an article that was able to edit for the IMF came out about the program of the [inaudible 00:32:27] of money. Uh, in the next months, I'm a co-author on their report. That's gonna come from the Hong Kong monetary authority, uh, with another set of, uh, great academics from Hong Kong and Luxembourg that we look into the problem of anonymity-

Lauren Weymouth: 32:43 Hmm.

Andreas Veneris: 32:45 ... when it comes to CBDCs.this should be out in the next, uh, two to four months. including me seven people as co-authors. I worked with the Bank of Canada and researched projects together that will looking, for different issues relating to, uh, essentially not CBDCs per se but these all assets, right? vulnerability attacks, malicious attacks, oracles, uh, how to be truthful in this environment, so forth. provided commentary to the Fed when they ask for it. That was, like, a year and a half ago. Uh, and I participate on a lot of meetings with central bankers when, when it comes to as stay up to date because it's a very, very fast, and fascinating field.

33:35 We need to understand that assuming that China was the first to release money, paper money like like, 14 and a half years ago whenever it came out, uh, or maybe something can say Persia from 3,000 years ago, 4,000 years ago when money was like kind of barter. After all those studies of years redefining what money is, central bank money is. And that's not an one-trick pony. It's very critical, right? Because it's gonna follow us for maybe another thousand years.

Lauren Weymouth: 34:14 And, and with all your work with different countries and jurisdictions, who do you see is getting it right so far?

Andreas Veneris: 34:21 China. By far, India. By far, Brazil has been doing an amazing work. technically, Bank of Canada, those guys are, like, very intelligent. You don't know how much I've learned from them. but in Canada, just like in the United States, we have, other issues, right?, I'm not very familiar but I know that the Fed is quite a bit of active, uh, activity behind the scenes, doing R&D on, and, and the Fed is definitely a set of very intelligent people as well. who's getting it right, for sure China, India and Brazil.

Lauren Weymouth: 35:05 Okay. [inaudible 00:35:07]-

Andreas Veneris: 35:08 and to my surprise... And I'm very happy because I'm from Greece originally, the European Union.

Lauren Weymouth: 35:16 Right.

Andreas Veneris: 35:16 Like, Christine Lagarde is doing an outstanding job,looking forward.

Lauren Weymouth: 35:23 Okay. And I have to ask 'cause you did start out saying that one of the advantages of central banks looking at in doing a digital currency is, avoid becoming obsolete with other projects coming to fold like Facebook. What do you think of Ripple announcing, RLUSD stablecoin?

Andreas Veneris: 35:41 the question is why you guys didn't announced it before. I think Ripple is, is a top five project. in terms of blockchain, it's a historic project.  I think it was a very intelligent, a very smart decision, yeah, because now there is some sort of regulation in the United States. You reach out to a very large audience, which including institutional audience, right? And Ripple has been focusing on servicing not only the public but serving social institutions and cross border institutions. So that was a very simple idea that I think moving forward for you guys considering the size that you have, it's gonna have a tremendous impact and-

Lauren Weymouth: 36:27 We-

Andreas Veneris: 36:27 ... provide a, a lot of, like, new opportunities for Ripple and for those who use Ripple.

Lauren Weymouth: 36:33 Yeah, I, I think so too. And then the reason it's happening later rather than sooner is because the interest in making sure that everything is compliant and that it's coming out in the right way with regulatory

Andreas Veneris: 36:45 Yeah, that's what-

Lauren Weymouth: 36:45 Yep.

Andreas Veneris: 36:45 Yeah, that's what I said. Exactly, yeah.

Lauren Weymouth: 36:45 Yeah.

Andreas Veneris: 36:45 It comes out on a time that you guys are not afraid of what ifs, right?

Lauren Weymouth: 36:52 Uh, that's right. All right. Big, big question. Do you think there's gonna be a time where fiat is obsolete?

Andreas Veneris: 37:00 you mean paper fiat?

Lauren Weymouth: 37:04 Yes. Is there gonna be a time where paper fiat is obsolete?

Andreas Veneris: 37:08 Okay. So the CBDCs is fiat but it's electronic fiat, right? So we're talking about the paper fiat. the answer is no. And if we see a tendency moving there, then I will be the first one going out in the streets to protest and I will explain why. Uh, evidently in the last 15, 20 years and especially with COVID, there's a significant shift of people using electronic money, uh, credit cards, PayPals or cryptocurrencies and so forth, like using paper fiat, right? But first of all, there are economies like Mexico more than 80% of the people use, like, paper money. Like, you ca- you ca- you cannot convince a Mexican quit drinking tequila and not use paper money. Like, I come from Greece and I can tell you no matter what the government has done in the last 15 years, you know, uh, people pay their lawyer with money and evade tax or to pay the doctor with money and evade tax.

38:15 Uh, but a lot of people in Canada, like, you go in the store, they say, "How much is that?" And they say, "Uh, costs like, uh, $200 but if you give me cash it's 180," right?

38:38 So all the central banks, their mandates and, and pilots where they came out has said, and I hope they're truthful, that introducing CBDCs are not there to eliminate physical cash and I hope they're truthful. So if you see that not happening and in five years that we'll see, oh, let's pass the legislation. We don't need CBDCs. We need, uh... We don't need paper cash, you know. Just collect them and put them over the wall to remember how it looked.

39:11 Then that's a good reason to go out and protest, right? But at the end of day, the customer is always right and the customer we see is the public. Uh, and that's why education is very important, public education. So they understand that, you know, the government is not gonna run after that to track to everything. I mean, Google is doing it and, and, uh, Facebook is doing it and WeChat is doing it, right, and KakaoTalk is doing it. So, and they need to understand also that paper money would need and they should not go away. So if you ask me, the answer is no because I don't envision CBDCs having the same level of anonymity that cash. Cash is the ultimate example of a non-fungible anonymous asset, right? I give you $20, nobody knows that unless they take a picture of it, right? Uh, uh-

Lauren Weymouth: 41:07 Yeah. All right. Well, Andreas, wrapping our podcast out, is there anything we have not discussed today that you'd like our listeners to know about?

Andreas Veneris: 41:15 Um, people need awareness, right? last week, I was invited to provide a, a opinion about what's moving forward when it comes to anonymity, on digital assets by a big, Canadian think tank. Uh, and essentially, my biggest fear right now is that people especially United States, they have this distrust against the government, whether show, open [inaudible 00:41:49] to give everything and all the data to the private sector. And nobody in the government's gotta make money out of them but the private sector will do, right? it seems what Satoshi did and what those original projects established soon after did was the right thing because it show to the world of there's an alternate way that can protect their privacy and respect their hard work and their money.

42:16 paying with cryptocurrencies today is minuscule compare by doing a wire transfer. So people need education to understand that we live in a very fine balance of a digital feudalism as I call it. And they need to educate themselves and they need to use the right tools so we don't end up like in a big brother world five, 10 years from now, right? So the quest is not over yet. The revolution is not done yet. It still needs more work but this work needs education to understand what we are.

Lauren Weymouth: 42:52 I could not agree more. That's why I wake up every day and love working with the University Blockchain Research Initiative.

Andreas Veneris: 43:00 You're a lucky person.

Lauren Weymouth: 43:01 (laughs)

Andreas Veneris: 43:56 You're working for that. You're putting a lot of blood and sweat into this. So we're very thankful for the love that you give to academia. And, and-

Lauren Weymouth: 44:03 Oh, thanks for saying that.

Andreas Veneris: 44:05 ... and rightfully so also because academia will... The seeds you guys put is gonna give a lot of roots.

Lauren Weymouth: 44:10 Yeah, we have to do this together., our leadership recognizes that a lot of the big innovation and the internet, which I like in blockchain in the early days too, came out of academic, came out of universities and we just wanna see that it able to collaborate with you what's happening.

Andreas Veneris: 44:24 thank you for, for Ripple for doing that to,young people around the world. But that's why you're doing essentially.

Lauren Weymouth: 45:39 Yeah. Well, thank you for being active. I mean, Andreas, you've been in this for the long haul and your career has spanned all these different countries, U.S., Canada, Greece, Japan and beyond and I'm sure these diverse academic and cultural experiences have shaped your approach to technology and research, 

Lauren Weymouth: 47:29 - You're examining all the technical properties of privacies, security, use cases leveraging, blockchain application. Thank you for participating in All About Blockchain, helping us better understand how countries are looking at using digital assets to update their legacy financial systems.

Andreas Veneris: 47:54 Thank you for having me and I'm looking forward to see you next time, uh, at some of the trips. Hopefully, you'll make it to Toronto. Thank you for having me today-

Lauren Weymouth: 48:02 can't wait. And to our community and subscribers, thank you for listening and for your feedback, to my UBRI at Ripple.com. Email if you have any questions about this episode or ideas for future episodes, please reach out. Until next time.