Citi's Future of Finance Global Head Addresses Future of CBDCs

A recent report from city predicts we are approaching a turning point where quote, the promised potential of Blockchain will be realized to be measured in billions of users and trillions of dollars in value. Joining us to discuss that report is city Global Insights, Future of Finance head run it Ghosh run it. Thanks for joining us this morning. So this city report on Blockchain that you co-authored speaks to the promised potential of Blockchain and how it will be measured in billions of users and trillions of dollars. But the report says this will be driven not by Dogecoin but by CBD C tokenized assets and gaming and uh Blockchain based online payments. So tell us a bit about that and what role will cryptocurrencies play? Sure. Well, first of all, thank you so much for having me on the show and featuring our report. Once you write a big report and something that's coming down the pipe in the future of finance. My team is called The Future of Finance. And what we talk about in the report is how money is different to other types of innovations. And the reason Blockchain scaling hasn't really taken off in big numbers so far is that Blockchain is about the transfer of value. It's about money, it's about value and most of the time that's regulated in most parts of the world. So, while my friends who are much more in the public Cryptocurrency space and usually hate the idea of CBD CS or centralized tokens. They'll be shocked when I say like CBD CS are going to be a reason to grow Blockchain uh adoption. We think CBD C will be a Trojan Horse. It'll be like almost coming in from the side, the back door. And that's what's gonna push the adoption in financial services of um tokenized assets, tokenized money. And then we're gonna be talking about Tams market sizes of trillions, not billions. It's interesting that you use the term Trojan Horse. Um I feel like there's a lot of controversy about this, right? So definitely there's people who say that, OK, this will like, cause people to, I don't know Google or you know what is Blockchain and maybe it will increase adoption. But then there's a whole other camp that says it's, it's actually quite the opposite. Um This will just, I mean, I guess a Trojan Horse isn't necessarily thing, right? It sort of depends on how you interpret that phrase. But I think there's one you think that um you know, it's basically going to serve as this sort of like not real replacement for cryptocurrencies, you know, in countries that don't like the idea of decentralized cryptocurrencies. They're going to put in the CBD C and be like, ok, just use this instead where there's nothing decentralized about it and it doesn't have icy protections and it's basically their way of edging out decentralized cryptocurrencies. I mean, don't you think that there's some legitimacy to that argument? Oh, totally. That's why I say it's a Trojan horse or it's an unexpected likely development from the side because many, not all many central banks are doing CBD CS as a centralized response to either decentralized cryptocurrencies, the Bitcoins of the world or as a response to private sector, technology companies wanting to like we've seen with Libra and DM launch their own tokens. But the end result of this is going to be that we're all going to become familiar in our digital wallets and our web two digital wall wallets, not the meta mass of the world, but the apple pays and the others will have by the end of this decade tokens in those wallets. And it's a short jump from having a CBD C or a bank issued stable coin to a wide variety of other tokens. Now, blockchains are technology. If you're a centralizing society or a centralizing state, you're gonna be using this from a centralized perspective. China is a good example of this. They're not going to have a CBD C likely based on Blockchain. But when you come to cross border Blockchain has a real value. When you're looking at fragmented systems, cross border CBD CS. That could be a great use of Blockchain in India, in Europe, in democratic countries as they embrace CBD CS. There'll be some element of Blockchain based deal based interoperability in CBD CS and it won't just be CBD CS alone gaming tokens which are going to take off in the next two or three years digital securities. The by side is pushing the traditional, by side, big institutions such as the Black Rocks, the world are pushing for this. It's going to be three or four different drivers, CBD, CS, digital securities and in-game tokens. And that's what, that's what's going to drive the growth of Blockchain on the next 3 to 5 years. How much of this hinges on the idea of the uh on the Americans adopting a CBD C if the Americans decide not to adopt it, if there's political pressure and there seems to be increasing political pressure for the Federal Reserve, not to create a CBD C. But to say, look, we'll just let the stable coin market handle this. What happens to this thesis? Uh You know, how much does it hinge on the Americans? Um So I'm, I'm based in, I'm based in Dubai in the United Arab Emirates when it comes to digital money and CBD CS, this is gonna be led by parts of the world that are closer to me than to you guys in the US America is the world's biggest capital market. And when it comes to tokenized or digital securities, that's where Blockchain is going to be growing in the regulated space in the US. Big buys side institutions, the pe firms, the VC firms saying, hey, having a Blockchain based solution allows me to access a new user base and they're all regulated anyway. So this is not about something new, there'll be regulated institutions who will be adopting for whether a new class of pe fund or a new class of VC digital securities. The CBD C story in the next couple of years is going to be here in the UAE in India, maybe in Europe. Not so much in the US. Interesting. All right. Uh I know you gotta get going Ronne, but thank you for your time this morning. That was Ront Ghosh. See, global Insights. Future of Finance head.