So we ended up after really taking some time looking at hyper Electrofabric, Ethereum, Stellar each have their pros and cons. We landed with hithero hashgraph for us, so not a typical blockchain protocol, if you will, which has also its benefits on scalability. We wanted to have EVM compatibility for smart contracts. Imagine central banks needing to tap into the benefits of not wasting money for the government for example, or government payments, imagining smart contracts making sure that
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Welcome to the Thinking Crypto podcast. I'm your host Tony Edward and with me today is Carmel Cadet, who is the founder and CEO of MTech. Carmel, great to have you on. Thank you so much for having me. Excited to be here. Yeah, Carmel, I'm excited to learn about m TAG. I've heard a lot about you guys over the years and in talking to folks at the Digital Dollar Project and many others. So let's start with your background. You know where you're from. Where'd you grow up?
Sure? I am originally from Haiti, born and raised. That is part of the story on why am tech, to be honest. When I migrated to the US, I became very fascinated by financial services and how financial products were broadly accessible to people and how it improved their lives, their career, their health, and their centative living. And I always wondered why wasn't that available from anywhere around the world. Personally, I deeply believe that everyone deserves
access to an inclusive and a resilient financial market. And I didn't know what to do about it at the time, but I ended up with a re at IBM where I fell in love with technology, and that's where really the combination of financial services and using technology to try to make financial markets better is where we land. So I looked at your LinkedIn profile and I saw your time at IBM, and it looked like you worked a lot on blockchain tech
and innovations there. Tell us about that. Was that your first encounter with bigcoin and crypto and blockchain? Oh? Good question. So my background is in corporate finance. I join IBM right after college, actually got my internship in between, and I went back to finish my finance degree. Then John IBM and corporate finance. Always worked in software portfolios at the company and got to see really some amazing technologies being done and how we transformed enterprises around the
world. I like to say that everyone is using IBM, they just don't know it just because it runs through the wires of our world. But really got to see how impactful technology can be. But I started in corporate finance, got to see you know, software, security, WebSphere, middleware, everything in between. Then ended up going to Treasury and work for IBM, so really a good sense of how to manage kind of corporate finance at a
global level. Really loved it. Worked on restructuring about thirty two billion dollars of assets for IBM, and then IBM asked me to launch the IBM Blockchain division back in twenty seventeen, so I was binge watching doing I was leaving from attorney leap as they were launching getting ready to launch a division, and
then I came back kind of hit the ground running. So I was binge watching on blockchain and digital currency doing my maternity leave, and I have a picture of my son around three months trying to say blockchain actually, which is really funny. But I ended up being exposed to really the technology before I got exposed to bitcoin. I opened my first bitcoin wallet back in twenty seventeen
and was very proud of myself on how much I figured it out. You know, back then it was there was no coin base at the time. But really fell in love with the idea of how do we use technology to bypass some of the rigid structures that have made financial services hard to access for
people around the world. Coming from the corporate world, definitely understood risk management, profitability, and had an appreciation for why banking services and banks moved away from a lot of a lot of countries and a lot of regions and you're you know, given where you are, you have an appreciation for this. The Caribbean has become over time a very high high risk region for financial services and it was not worth the investment that was needed in order to maintain banking
services. So blockchain for me was really a light bulb moment. Can we provide better visibility, better integration, automated workflows that made financial services accessible, usable, but also more trusted. Absolutely, and certainly this technology comes at a good time where it can help those folks who are under bank, don't have access to proper financial services and so forth. So where did the idea of starting MTech? How did that come about? Understanding your background and seeing
that need, where did where did it go from? You know, I see this need, but I want to I want to participate, And how did you know starting that company come about? Yeah? Just crazy idea man to get to get started on the central banking side. But I had the rare opportunity to be at the table when the first central bank digital currency was
being created. I was at IBM at the time and Central Bank of Bahamas was looking for a blockchain based solution to modernize their payment infrastructure and that was going to be the first CBDC. I me and my team at the time decided to pitch. We got some partners to work together, and we didn't think we were going to win, but we actually ended up winning and ended up kind of really helping the team architects. So we were part of the
first phase the first pilot rollout. Very exciting stuff. But the thing that really made sense to me is if a central bank is looking to At the time, we didn't call it that, but now I can say that tokenize their cash, their sovereign currency. Can we provide financial inclusion by design? Can we actually make financial market more resilient by having blockchain technology, distributed ledger technology, better traceability as far as market activity. Quickly understood that actually that
can counter an time money laundering capabilities. People didn't really understand that at first, but the traceability and the visibility of activities allows you to really deep dive and find and find better patterns and understanding how money moves. So for me, that was really exciting. That was the answer to my question seventeen years before that when I moved to the US and I saw it and I could
not un see it. So I decided to make the decision to leave IBM and became an IBM partner when we left, and helped IBM with the delivery around the CBDC and Bahamas. But the very simple idea was to bring cash on blockchain. To put cash on blockchain, we think that could you know, financial inclusion, resilience, but also better liquidity. If you think about how paper cash works, it's very limited. Yes, you know, more privacy, but you know, very limited to peer to peer or physical transportation.
And we thought that could be that could be something. So I beg my husband to let me take half of my phone one K everything I could borrow against it and lunch and lunch M tech I had. My son was two at the time. Very very big decision, but we thought that this could really make a difference if we could bring blockchain to central banks, that
was a game changer. Wow. I love that and I really appreciate your entrepreneurial spirit, and uh, you know it is risky and given that you know the time or period in your life, having a young kid and so forth. And you said borrowing against your pour one K. So that's awesome. And tell us about the services that MTech provides. And obviously you're working with central banks, but how are you enabling them to build this infrastructure and
so forth. Sure, as you can imagine, central banks are very conservative institutions, but interestingly enough, they are also very much the anchor of most financial markets. Any running and scaling and active financial market, you would find a central bank or some monetory authority that does practically two main things, issue sovereign currency in that market, so provide that sovereignty of currency, but also
regulate the financial market. So if you're going to have financial service providers, central banks are not direct financial service providers, right, They regulate the private sector that is supposed to enable that delivery of financial services. And what we realized, so after I left IBM, studied m tech, started working with the Bahamas project, but started talking to central banks and realizing that there are
just any other enterprise. They are a financial institution that has a different mandate than what on the retail side are familiar with. But they were desperately in need of a digital transformation and that's what we kind of stumble onto. And when we started talking to central banks, realizing that for them, their processes were very manual. The systems that they use haven't changed over fifty sixty years.
Some of them don't have any systems. When it comes to processing basic things like license applications or regulatory reporting for a compliance is done still today via paper submission or electronic uploading on a website. Yeah, go to the OCC website and you will find a licensed charter, licensed playbook, a handbook for you to download and you know, have some night reading or probably hire a
lawyer to go figure it out for you. Right, But the processes were very very are still our old systems, manual processes, and what we also find out is very expensive way of doing things. For printing cash, the US spends about eight hundred million dollars a year to print paper cash. And as economies are becoming more digital, some people would say, who's using this paper cash anyway? Right? I mean, do you have cash on you
or do I have? You know, why are we spending eight hundred million dollars to print paper cash in the digital economy, and in smaller central banks spend about ten million dollars a year. So there was that high cost component versus what we knew was possible and what we saw coming down the pipe around the tokenization of assets and how much simpler and efficient and scalable that could be for central banks. And that's where we landed with an opportunity to build modern
central banking infrastructure. And when we think of that, we bring a platform play to them where they can digitize their workflows on the regulatory side, on the digital currency side, then we bring really macro services and software services to do data analysis and APIs for them to consume data, receive data in near real time, build better dashboard analytical dashboards for them to get a better sense
of what the market is doing. And then on the tokenization side, we really took an approach on how do we provide a Web three unable digital cash platform, so we partner with Layer one protocols. There are certain things that we wanted to make sure that we could have. Enterprise governance was very important. If I walk into a central bank, it's very hard for me to explain who's going to govern the network that they're going to put the country's currency
on. The second thing is the scalability and of course privacy we saw we see really kind of a really love and hate or a lot of confusion on what privacy really means. But with the rise of bitcoin and digital assets, you also see that people are comfortable having some level of you know, transparency into what's happening, but maintaining their private information closer to their chest. And
we thought that we could actually deliver that. So our portfolio of services is a platform based, highly modular, so a central bank can deploy a module that for their digital regulatory sendbox, we deploy that for them. On one side, you have the central bank, on the other side you have the financial ecosystem, and then we build what we like to call central banking as
a service in between. Wow, Carmel, really great insights there, you know, telling us about many of the central banks, which is a bit eye opening for me that they haven't fully upgraded their systems in like fifty to sixty years, so you guys are helping them to do that. So that's really great. And you mentioned some of the layer one protocols. Are you able to tell us which block chains you have worked with and are currently partnered
with? Sure? I mean coming from IBM of course started with hyper ledge or Fabric, had a good appreciation for how that could work into some enterprise use cases, but we also saw some limitations around financial services and tokenization of
assets when it comes to hyper Ledger. Great great crital cal for some use cases, but we believe that long term, the retail aspect of cash as a liquidity asset, as a very liquid asset would really take hold and be better used on a public ledger, public network with EVM compatibility that can be
interoperable with other assets, just like Cache is today. So if you walk up to someone and say top up my bitcoin wallet and they take your cash and they send you bitcoin from their wallet, that nature of it I think will continue to happen and we wanted to make sure that we build with that
in mind. So we ended up after really taking some time looking at Hyperludri, Fabric, Ethereum Stellar each have their pros and cons, we landed with hithero hashgraph for us, so not a typical blockchain protocol if you will, which has also its benefits on scalability. We wanted to have EVM compatibility for
smart contracts. Imagine central banks needing to uh tap into the benefits of not wasting money for the government, for example, or government payments, imagining smart contracts making sure that the wallet is still valid before disbursing funds or making certain disbursements for special programs. So we knew smart contracts were going to be a component of it. So we really took some time to research, and we really like working with Hi or hash graft. They've been a great partner and
but definitely a great protocol. And of course the energy, the fact that we work in emerging market, the energy consumption and the distribution nature of the running of the network is something that we knew that we needed to officecate. It was too much to ask governments and fund institutions to not only adopt a new technology, but also having to figure out how to manage notes. I saw that very painful, painful process in their early days. It literally kills
so many blockchain projects. M man, I'm getting so much insights here, so I appreciate your knowledge and all the things that are I'll slow down here. No, no, no, It's great because I have like a ton of questions like the steam engines going here. So you mentioned hyper ledger, fabric Fabric and I interviewed those folks, and I know their blockchain is private, but you mentioned you know you're leading towards leaning towards the public blockchains.
But question for you, I know with central banks and financial institutions, privacy is a concern, and how are they navigating that where maybe, like you said, the retail version is pretty much open, is pseudononymous to a certain degree, or are you using like a private aspect of those blockchains? And I'll give an apple like Avalanche has subnets, private subnets, XRP Ledger has
I believe what it's called the private ledger or something like that. But you know, some of these blockchains are building these like subnets which have a private lager. Is that what happening happening with Yes, he there absolutely have what they call a special purpose network that an institution can deploy. But of course the trade off also comes back in right, So in the moment that you
want a private network, you have to have your own governance mechanism. Who's going to manage the nodes who's going to determine the rules of you know, how frequently transactions are processed. Do you use a typical blockchain or do you use any other consensus mechanism. There are some problems that I think it's if you can address the issue of privacy with a public network, then the benefits
are so much greater on a public network. Right, Just that if you make a list of pros and cons you end up with so many more benefits if you can figure out the privacy issue, because you're right the same way in early days of cloud, right, there was this perception of kind of well everything is in the cloud, and you know who's controlling the cloud kind of thing. But in blockchain, you see you started with a mechanism of
private networks wanting to keep things. From an ecosystem perspective, the economics actually just won't let that happen. And I think it's you can look around the world you'll see the struggle of private network scaling up. It's hard, it's really hard, and the ones that have scaled up are more open and public. Are there use cases that you can imagine a private network be better?
For sure? There are some ecosystems let's say trade or food traceability, where an organization wants to see its own supply chain, right, and you integrate into that. I didn't want to have your own visibility. But I think for financial services some of the problems that we have in today's financial system is the silo aspect of the financial services and the limitation that comes with those silos, meaning each organization make the rules on how you get it and get out
right. And that's what blockchain was essentially actually turned out to solve very well. How can you provide broad access I like to say decentralized access. I like to say centralized governance, centralized centralized issuance, but with decentralized access and public networks do that very well. You know, as you're saying that, I was thinking about JP Morgan's jpm coin and they use Quorum, and that would be like that private centralized blockchain and it's only between maybe their branches or
things like that. Yeah, And you know what, that's a really good example because JPM, if I'm not wrong, ended up partnering with Consensus and transferred chrom over to Consensus with meta mask and so on, which kind of brings you closer to the more public network aspect of it or ethereum, But you're right, that's where they started. Internally, the benefits are limited though, I mean jpm coin was moving money between their accounts. I don't know
if they need a private coin to do that, right. The benefits of it really become exponential when when you step out of your network and being able to have interoperability more and with more flexibility. Yeah. Absolutely. Now I don't know if you can tell us, but how many cential banks are you working with and could you give us any names? Sure, we are working
with six central banks today. It's it's a lot to get six central banks to go to that digital transformation, as you can imagine, We anticipated maybe one a year starting in twenty twenty two, but we ended up with bankov Ghana was our first client. We signed the first pilot agreement with them during COVID. It was quite a trigger for digital transformation. But banko Ghana has
been such a great model around innovation in this space. Around twenty twenty they set up the Financial the Fintech and Innovation Office at the Central Bank with a real mandate of engaging fintech, ecosystem, safe innovation and web three blockchain and
digital currency type of approach, So I'm very part of the team. We actually did a pilot for a ECD hackathon, so that was their first cbd web three unabled CBDC hackathon, and that was very successful from a central bank perspecise being able to see can we actually use a public ledger for this, So we were happy to be able to showcase that and then but they started
with the regulatory sandbox. So the regulatory sandbox is actually a very popular solution that we're bringing to market because it allows the central banks to navigate their process, their slow process around putting regulatory frameworks in place and the speed at which innovation is happening. So we bridge that gap by enabling them to say, all right, innovators, we know we don't have a regulatory framework for you
yet, but come to the sendbox. We want to make sure that you have your compliance, your consumer protection, that you're not going to do money laundering with whatever product you're launching. Will give you a sendbox license and will supervise how you're doing, and that will inform us on how we should actually
regulate this space. But it also accelerates your go to market right so it's kind of a win win and being able to do that with a digital platform, having real time visibility into their performance and to their data is something that we enabled and we have six central banks who are deploying that today. Central Bank of Nigeria was our second client, and we're working with Liberia, Sera,
Leon Guinea and Gambia. So there's a zone that we kind of tapped into and they're very, very excited to not only digitize what they do, but also regional integration over time. Wow, that's amazing. Congrats on this success. And you know, as you're saying that, I can't imagine what it's like to pitch a central bank and you know, moving and you know, trying to get them from the analog to digital world. So that's pretty
incredible. Now. I remember reading and I think I was talking to Chris John Karla the Digital Dollar Project about this that Chris that you guys ran a pilot for a US CBDC. Tell us about that and were there any updates with the FED receptive if you can't tell us anything there, so can't share too much on what happened on the Digital Dour Project side. But actually when
we join the Digital Dour project. We started talking to essentially financial service providers, fintech companies who are trying to think of how can they build on CBDC in a perfect There are two use cases that we started working on. One was being able to provide financial inclusion. And I know people don't think that the US have a financial inclusion problem, but there are the size of Ghana in the US that don't have bank accounts in the US about thirty million people
about in the US that don't have bank accounts for various reasons. Granted, but the access has moved away from local branches and so on, and whether people are digitally unable to access digital services. But they were in a very underserved and under bank region where they had a community of people who are either in shelters or coming out of you know, jail or coming out of different situations that don't have bank account How could they provide digital cash to them?
Right, they don't have to have a bank account to hold cash and CBDC on a retail CBDC if you design it properly, if you have the right regulatory framework around it, you don't need a back account to hold a CBDC and that was the beauty of why digitizing cash and tokenizing cash got us excited. The other use case was also very interesting where they wanted to issue their own stable coin for their local community but back it with CBDC as reserves.
So that was a very interesting mechanism. So you can have the retail and you can have the wholesale component of it if you will, where it can really be interchangeable as far as what you do with a CBDC if you are a financial service provider versus if you are a user. So those are very you know, two use cases that we started working on with the digital or
project participants. We're still going through that as you can imagine as people you know, we're building, but those are the early test cases that became very interesting. And I think that's probably what Chris is referring to. That's fascinating and I didn't think about that. But stable You said a localized stable coin, so it could be maybe are you thinking a country wide, nationwide or
like state specific, using the United States as an example. Think of it as just like the US Circle you know, enables or let's say Ripple issues their own stable coin. Think of it as a community base or more targeted type of stable coin that another issuer would would would issue and it would be US dollar and it would be one to one, but instead of having cash directly, which cash doesn't pay interests. Cash is really kind of one to
one. You could create different business models around your stable coins that are different from the CBDC that is back from whether you wanted to create rewards program or have a voucher program where if you're using the stable coin, you can go to all the registered you know, ecosystem stakeholders if you want to, if you're in that community, you want to go to that grocery, you want to go to this vendor. You have certain vendors that accept the stable coin.
Those are the use cases that I think are going to be very interesting on how moving the resilience that they can have with the backing of cash being one to one. If you think about it, Circle is doing the same thing, right, so they have one to one backing US dollar, but
it's just with black Rock instead of with the FED. Black Rock ends up having an account of the FED, so you kind of like you still have the intermediary here that I think over time, as central banks think through how do they provide an efficient infrastructure to the market that you might see people really engaging and connecting directly into into a central bank system, a CBDC system.
That's so fascinating. And as you're saying that, I'm thinking about all the things that have been brought up and discussed over the years, such as new stable coins have the reserves, right, some are using US treasuries. Now, I know there's a big question about teather even though there's they have monthly or quarterly attestations. I've heard Howard Lutnick at Caunterfitz General say they do have
the reserves. But you know, to your point, if these CBDCs are put into play, and let's say the United States creates a digital dollar, they would have these stable coin issuers use that as the reserve. So that's fascinating. Yes, I think so too. I think so. And you end up addressing privacy pretty well right the retail side when you look at what the central bank can see. The way you can tell whether there is a level of privacy when it comes to CBDC on the retail side is one whether
the central bank is the direct interface provider. We've seen a couple of central banks think about how to introduce their own app that that's one and their own app is the only way to get access to the CBDC. I think that there's at least a perception of the central banks senior information directly, but central banks don't really want to do that because the idea of doing KIC and AML. Central banks don't want the risk of doing that, so they're not in
the business of doing that. So I think there's a natural disincentive for them to get into that role. What most central banks are expecting and have expressed desire to do. The design is really to make CBDC and cash available through the private sector solutions. The same way you have to go to an ATM, you don't go to the central bank. You don't go to the FED directly to get your cash. You go to an ATM to get your cash.
There's going to be an intermediary that provides that and that information. Your information is with your provider, not with the central bank, right, And one of the benefits of using a public ledger is that you can actually see what the central bank sees, right, and the central bank can say here's what's on the ledger, here's what we see, there's no private information on there. In order for us to get your private information, one, it
has to be under the constructle whether it's aml or any suspicious activities. But then we still have to go through your financial service provider and work with them for any investigations and so on the same way it's done today to be honest, right, if there is any suspecial activity, then your bank is part of the conversation as far as getting information. But that for me is a
benefit of using public ledger that everyone can see what's visible. And then putting the second thing is putting laws around that and making sure that it's not only codified, but it is legally kind of stated that the central bank does not receive PII under certain you know, except under certain circumstances. And then the second thing is that the token is designed as a bearer's instrument, meaning if you hold it, it's yours, just like it's cash. No one is
coming to you and kind of taking your cash from your pocket. So a central bank should not be able to kind of take cash out of your wallet again, minus the extreme circumstances that would require that. But I think that's a good way of being able to address that. For Cremel, Let's walk through a mock scenario here potentially hypothetically here, right, I have JP Morgan as a bank five years from now, could I see a JP Morgan being intermediary where I can access Circles, US, DC, Paypals, p y
US, the Ripples News stable coin. You know, depending when it's launch or something else. Do you see banks being intermediaries versus you know, people in the general public don't know who Circle is, they don't know who Ripple is, right, but they know they know who Bank America is, and TD Bank and JP Morgan DC. A scenario like that, I definitely see banks playing a role. However, I think they have a few things going against them, right and which opens opportunity for their players. I think the
banks don't necessarily have a problem that digital asset is solving for them. You could, you could think about it on the settlement side, security settlement on wholesale transactions, securities, UH trade payment and so on that take a few
days. But I would argue, depending which bank you're talking to, if they're the one holding that cash, they have the float for two days, they're not trying to give that up for twenty four to seven settlement right, money comes in and out really fast that way, I think the opportunity, however, you're going to see the Circles of the world and the Paypals of the world leveraging either their own network or building networks around the product that they're
they're they're building, and I think Circle did it right. Instead of them being the issuer, it's really working with different issuers and different channels to make sure that this can be accessible in different platforms, and PayPal paypals start with its own network, but bringing it into more open networks for it to be a more liquid asset while they maintain the one to one that they received for that I think is also going a very scalable model. But I think you're
going to see a lot of FinTechs play into this space. I actually think that the digital asset landscape of products of fintech products has not arrived yet. I think there's a whole new generation of financial products that are going to run on digital assets instead of bank rails, whether those are bank stable coins or
bank infrastructure. But I think you're going to see new payment entrants just by default going into digital asset payment types and that requires a different business model if you think about it right, different compliance, different partners, different ecosystem to
plug into, different risk profile that you need to manage. And depending on which countries, it might be easier to actually expand globally and have your products be used globally if you have a digital asset compare if you are a financial institution and you have to give access to people to your system versus. I think there's quite a bit of a new set of products that will that will
be very attractive to individuals, businesses small and large. I'm seeing more and more corporates actually partner with smaller companies to get into their Web three strategy. I think that's going to come. And you know, with the ETFs and the laws that just passed in the US, I spent a lot of time in Africa. There's a lot of headlines that kind of make things confusing on where things are. But I think compared to two years ago, the conversation
is very different, just very different. Back then, it was you know, no no, no, no no to you know, today it's okay, how do we make money with this? Or how can we actually regulate this or you know, it's it's a different conversation now. Speaking of regulations, there's been a lot of political narratives here in the United States. You know, certain political parties taking the action well we're against CBDCs and or you know, in your right to we want to we're concerned about your right to
privacy and so forth. And I see, you know, the pros and cons there's tons of pros for CBDCs and digital currencies. I think the one con, which is just a potential just if you put the guardrails in place, I think like kind of what you're alluding to, where the CBDCs are the reserves, but the retailers using stable coins. I think that would work. But privacy is still a big concern for folks. And you know, Congressman Tom emer who I've had on the podcast a couple of times, he
introduced a CBDC Anti Surveillance State Act. I want to get your thoughts on that. And obviously that's in the United States. But what are the folks in Ghana and so forth? How are they approaching are they do they have the same level of concern? Yeah, I mean I'll start the last question. I think there's a kind of a learning curve for everyone, right, Like I said, two years ago, everyone thought bitcoin was going to be, you know, just for fraud and only bad people used it. And
then until you have black Rock, who wants to use it? You know, like we'll put a whole etf around it. So I think there's that learning curve. But look, I have I have a maybe sarcastic way of kind of thinking about this stuff. But if the Congressman is pro bitcoin, then you have by default a level of transparency and openness to your information that you already are providing. I think privacy is a tough term to get people to agree on. Actually post that on Twitter at some point it's like what
is privacy to you? And I got different answers for everybody who replied. I think when I look at what the bill proposes, it's not anti CBDC. It's anti CBDC that violates your privacy. And I think I believe that there's a way to solve for that. And if you solve for that, then what you're talking about is having a US dollar version of bitcoin, and I don't think a lot of people would be against that, to be honest with you, you know, because bitcoin is something that you can't control.
Yes, decentralized and so on, but is that the only asset that you want to be using. But at the same time, the US prize itself and providing kind of safety and security to the world when it comes to their Google currency. People have different opinions about that, but that's where we are.
Do you actually see that role in a web three world? Do you move away and say we're not doing CBDC because it is not something that's going to be private while everyone else is either issuing their own CBDC or you're seeing a transfer of trust from the US dollar to bitcoin. I think that's going to be a very interesting conversation for policymakers in the US. In Europe and
Asia, they are much further along as far as deciding. I will never forget where I was when I think it was Governor run the Centus at the
time who took the charge on Twitter on anti CBBC. I was sitting at a BIS summit, which is the Bank of International Settlement, which is a tink tink of central banks in Switzerland and Basil at the time in Switzerland, watching the European Central Bank monetary Authority of Singapore and Bank of France arguing on whether they should have programmability of their CBDC, not whether they should be doing
CBDC. Is debating whether we should have programmability and whether the idea of programmability changes the nature of the singleness of money. Very deep currency central banking conversations that are really more advanced. And then I opened Twitter. I happened to be opening Twitter on that and because I was kind of trying to post as the event was going on, and then Twitter was blowing up around you know, kind of US is not doing CBDC. I think it's a matter of
time, to be honest with you. I think the odds and the dynamics happening around the world is going to make it a really tough choice for the US to not do this. So maybe it's the model you're talking about before, where they do the wholesale CBDC. I don't know what blockchain, Maybe a private blockchain is running behind the scenes. But like you said, the stable corn issuers are given regulation and they start pushing it to the masses,
but they have to hold the CBDC as reserves. I think that makes sense. Maybe that's Yeah, that's definitely a model. That's definitely a model. What ends up kind of throwing a little wrench, and that is that central banks have a mandate, legal mandate to provide sovereign currency in their country. And if you delegate that a bit to the private sector one hundred percent,
meaning let's just stay reserve, you guys take the retail. If there is a failure in the market where circle drops or ripple drops, then what fills the gaps? Right in finance, we call that concentration risk, if you will, meaning that central bank as a regulator depends on only on the private sector to provide money and currency. It's not a risk that they're going to take, at least for the foreseeable future. They will continue to maintain cash.
There's a reason that they still spend a lot of money printing cash is because a lot of people still want it. To be honest, and second, it's the last result alternative. When svbs have opening what FTX is happening, everybody wants their cash. If you could give it to them in paper, it would be even better just for them to put it on a mattress and feel safe. But I joke, but you know, you want to kind of cash out of those assets, right, because there is a different
risk profile. Any company that issues stable coins is only as strong as their balance sheet. The US government or the central bank runs on their GDP as their balance sheet, right, So very different risk profile the likelihood of a central bank failing versus a private sector failing. But you're right. I think those guys are feeling going to fill in a big gap and then giving people choice on whether they want to keep digital cash, stable coins, bitcoin,
other private tokens David token if they want to. You know, the idea of really having different assets and tokens that they that they want to keep in their portfolio, I think is going to be something that people actually ask for and look for. I'm so intrigued by how they're going to figure this out, you know, is it circle ripple, PayPal the other issueres are tied into the treasury or so, I don't know, right, Yeah, I
mean, I think those guys are definitely looking forward to that. I think those guys, if they're not, they should be, but I think they probably see that. Think about it, right, Imagine if you had your reserves very compatible as far as asset type or technological standards to your private stable coin, right, so if you need to tap into your reserve, you're not waiting for two days while you have twenty four to seven stable coins running right fed now is not a you know, twenty four to seven system.
The TPS or SEPA system and Europe kind of runs in certain times and you have to shut down and do settlement and so on, so that compatibility is not there, and I think there's a great efficiency for those players to have reserves in kind of central bank stable coins while backed by or to back their own private stable coins. So what's on your twenty twenty four road map? Oh man? Okay, So one thing that we're seeing right now, definitely
the timing around central banking digitization is upon us. We are It's crazy to say, but we literally have a backlock of central banks that we're trying to get to and building for them. Both on the regulatory side, meaning sendbox from going from sendbox to supervision for not only current Web two type of products, but Web three that is coming down the pipe, right, so they need better tools. We are building that. On the central bank side,
we're also seeing the opportunity to create value for the financial ecosystems. One thing that we realize that central banks are regulators. It is not their job to make your life easier as a regulated entity, and that creates kind of a lot of fragmentation on the ecosystem on how did they engage regulators, how did they do compliance, how did they become more resilient, and how did they minimize their compliance risk and get shut down in the middle of them growing.
Those are things that those are problem and pain points that we're looking at addressing. So for us, we're looking at bringing the Sandbox into more countries, increasing our product portfolio with the central banks that we were winning, and we're very hopeful of a new CBDC launching soon. We'll see. That's awesome. Well, I'm excited to see those updates. I got some wrap up questions here for you. First, if you could create your own metaverse, what
would the theme be? Oh man, I never had that question before. If you put your oculus on or yeah, yeah, yeah, Well I would definitely reinvent Haiti. I would reinvent Haiti. I would love to take Haiti and everywhere with me, at least the Haiti that I have in my mind and what I remember and what my parents had to talk about. That would be pretty cool, given how almost impossible it is to imagine today. I was to my mom for a good hour last night and just talking about
how things are happening in Haiti right now. Given how impossible it seems, I think creating a metaverse that recreatesd it that reimagined it would be really cool. That's awesome. And I got some rapid fire questions for you. Favorite food, favorite food. I'm a foodie, so that's a hard one. Tacos, I'll say tacos. Favorite musician or band John Legend, Nice, favorite movie, dirty Dancing. Favorite book Seven Principles of Vision mm hmm by
Dr Miles Monroe. I gotta check that out. And when you're not working at m tech, what are you doing for fun? Uh? Going to baseball practice, basketball practice, cooking, not hanging out with my friends or calling my friends enough, that's for sure, and then trying to exercise. That's kind of like my thing. So I'm trying to, you know, kind of maintain and protect my regime a little bit. But those are the things that kind of take me away from MTAP. Awesome caramel, absolute pleasure.
I appreciate your knowledge and insights, and I got to have you back on because I'm fascinated by what the central banks are doing in the future of digital currencies and CBDCs. But congrats on all the success and thank you so much for joining me. Sounds good. Thank you for having me. I think it's been a long time coming and I'd be happy to come back, so let's do it again. Awesome