6 Highlights From “Stablecoins Are Killing It” #16— Featuring The CBDC & Stablecoin Leads From ConsenSys

Episode #16 featured Matthieu Saint Olive, a member of ConsenSys’ strategic business development team, focused on enterprises and governments. As part of his role, Matthieu leads ConsenSys’s strategy and delivery for Central Bank Digital Currencies (“CBDCs”), stablecoins, and payment projects globally.

Matthieu was joined by his colleague Ludovic Courcelas, Government Strategy Lead at ConsenSys. For the last two years, Ludovic has also been leading the EU Blockchain Observatory and Forum, a major research initiative of the European Commission that aims at analyzing blockchain use cases and setting up a coherent regulatory framework in Europe.

You can watch the entire episode below:

Or you can read our six highlights below:

1. ConsenSys Is Currently Working With Four Central Governments On Their CBDC Projects

ConsenSys is building infrastructure for foreign governments to showcase the possibilities of CBDC. ConsenSys helps central banks understand how they can maintain control of the digital currency while leveraging a distributed network of commercial banks, how to optimize privacy, and how to provide the TPS (transactions per second) needed to enable broad consumer use. Matthieu stated that technologies including zero knowledge proof and rollups are key technologies enabling scaling and privacy on the Ethereum network.

2. ConsenSys Is Bridging The Crypto World & Traditional Finance To Foster Mass Adoption

ConsenSys is helping drive the tremendous innovation in stablecoins that has enabled a tripling of market cap in 2020, to $20 billion. But ConsenSys believes that for crypto to really go mainstream, the technology needs to be adopted by traditional financial companies. So in addition to driving the technology forward, Consensys also sees its roll as helping to bridge the world’s of crypto and traditional finance.

3. 70+ Central Banks Are Experimenting With CBDCs, Driving Interest From Traditional Finance Companies

With 80% of the world’s central banks working on CBDC projects, traditional companies know that the global markets for payments is rapidly evolving, and they need to evolve with it.

While China has the most advanced project in trial, the Chinese government has been pretty quite in terms of the projects progress and plans for a wider rollout.

Developing countries like the Bahamas and Eastern Caribbean have advanced projects planning rollouts in 2021. It’s also possible a country in Latin America will roll out a CBDC in 2021. Meanwhile, more developed countries, like Sweeden, that are far along in terms of experimenting, will likely be more cautious, and take more time, before they rollout a CBD.

Matthieu stated that while the technology is ready for primetime, understanding the impact of the technology is what central banks are working on and need to get comfortable with before they roll out.

4. There Are Two Kinds Of CBDCs, Wholesale & Retail

Wholesale CBDC is for interbank settlement to enable capital market activities.

Retail CBDC is a digital version of cash. Consensys believes that central banks will not want a direct relationship with consumers. Instead, they will leverage commercial banks as well as large fintech companies to work directly with consumers. ConsenSys further believes that fintech companies are well positioned to disrupt commercial banks, who have generally lagged with regard to embracing crypto technology.

5. Programmability of CBDC Will Drive Innovation And Adoption

There is a massive opportunity for private companies to innovate on top of the base layer infrastructure being built for CBDCs by central banks.

While China’s CBDC trial is not leveraging blockchain, due to their unique need for high throughput (80,000 transaction per seconds), most CBDC experiments are leveraging blockchain.

The main reason Matthieu cited for central banks using the blockchain is that it’s the best technology for ensuring trust in distributed networks. Blockchain enables coordination between the central bank, commercial banks, and individuals, while ensuring individuals have full control of their money.

Matthieu believes central banks will use permissioned public networks, as private networks don’t have the necessary throughput.

6. Stablecoins And CBDCs Are Part Of A Larger Financial Ecosystem Moving Towards Programmable Money

Matthieu believes that the crypto native first movers on the right, in the graph above. are 2–3 years ahead of the traditional companies on the left in terms of developing the tools to scale DeFi.

Importantly, Consensys believes that CBDCs are complimentary to stablecoins, and not a threat. They will have different use cases, but leverage similar technologies, like digital wallets.

Click here to register for Stablecoins are Killing It #17, featuring a discussion of stablecoins in emerging markets with Thiago Cesar, CEO of Transfero Swiss, the creators of the BRZ — Brazilian Stablecoin. Thiago will be joined by Sinan Koc , the Co-Founder & CEO of BiLira, a Turkish Lira backed stablecoin.

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