James Wallis Interview - CBDCs & Stablecoins on the XRP Ledger - Ripple & Central Banks - Bhutan & Palau

James Wallis is the VP of Central Bank engagements at Ripple. In this interview we discuss Central Banks issuing CBDCs and stablecoins on the XRP Ledger. We touch on Ripple’s relationships with Central Banks, updates with Palau and Bhutan pilots, benefits of CBDCs and how they can coexist with stablecoins, Fed Digital Dollar and more!

Transcription

Welcome back to The Thinking Crypto Podcasts, your home for cryptocurrency news and interviews. With me today is James Wallis, who’s Ripples Vice President for Central Bank Engagements. James, it’s great to have you on the show.

• Yeah, Tony, thanks so much for having me. Looking forward to the discussion.
• James I’m excited to speak with you because CBDCs are coming in hot and heavy and it’s a brave new world with digitization of money. And I’m very curious about what you and the folks at Ripple are doing. But before we get there, tell us about yourself, where you’re from, where did you grow up?
• Yeah, so as you might get a tell by my accent, I’m British, born and raised in the middle Midlands in the middle of the UK. But I’ve been in the US since 2001, so been here over 20 years. My background is really in technology, I’ve worked in FinTech for over 20 years in different flavors. Most notably I spent most of my career before Ripple at IBM. So I worked globally with banks, central banks, commercial banks, all sorts of financial institutions. And that was sort of got what got me into crypto and blockchain, so I have IBM to thank for that.
• Now, what was your first encounter with Bitcoin and crypto? Was it, as you mentioned, possibly through your job? Or did you hear it from a friend or through the media? And what was your aha moment?
• Yeah, no, I love that question. So yeah, as I mentioned, I was at IBM I was fortunate enough to be the Global General Manager for the payments industry. So that was working with payments companies and banks all around the world. And I’d heard of Bitcoin, but originally it was really what was in the press, it was like, there was all the pluses and minuses of Bitcoin. But what the really sort of the aha moment was actually when one of the architects on my team said, took me on one side at a conference, said, hey, James, I need to talk to you about blockchain. And of course I said, you mean Bitcoin back in those days? This was like 2014 or something. And he explained to me the sort of underlying sort of technical principles of blockchain. And that to me was like the massive breakthrough moment. And that was really what prompted me to sort of find out who else in IBM was working on blockchain. And then we ended up actually, myself and two other VPs set up the whole initiative in IBM around blockchain. One distinction though is that it was really blockchain as a technology and all the different uses of it. So not just financial, right. So IBM was very heavily into looking at thing, if you think about the characteristics of a blockchain you’ve got an immutable record that’s a single source of truth that different people that don’t trust each other can share that same view. So that characteristic along with the security and along with some of the other things you can do, that to me was like mind blowingly amazing. And that you could start doing all sorts of things that you can’t do with traditional systems. The crypto part for me was initially less of a focus. And in fact I think it’s fair to say that IBM couldn’t as an organization kind of quite figure out how to deal with crypto. Even basic questions like how do you put it on the balance sheet and things like that back. And again, I’m going back till 2015. So when I decided to branch out from a 400,000 person company to a smaller company, Ripple was like the number one pick because it was payments, right, that’s what I’ve been doing for years.
• Right.
• It was blockchain, which is what I’ve been doing for several years at that stage. But then there was crypto as well so that was like, it was the perfect sort of three elements in one place.
• Now, there’s still a bit of, for some people the juxtaposition of crypto and blockchain but it’s almost for certain blockchains you need a native token to kind of grease the wheels, so to speak. And I think some people like I’ve seen Jamie Diamond say, oh, not crypto, but blockchain, right. Or the folks at Goldman Sachs. But you can’t really separate them in, not a 100% of the time. I think when you have privacy blockchains and closed wall garden blockchains, sure, you can probably do without a token. But what are your thoughts on that? And how folks seem to have different opinions?
• Yeah, I think it is different people have different views. I mean, I think the fundamental technology can be used for a lot of things, but crypto is sort of probably the ultimate use case, right. I think the value that you have in having a token that can be used to do things to move value around in a much more efficient way than the old legacy systems is that’s the game changer, right. So I think the utility that we are starting to see with some of the chains, right. And as you know, well within Ripples business we use XRP as part of our solution as a method for transferring funds internationally across border. So yeah, I think there is a distinction. Blockchain to me is sort of underlying technology. Crypto is sort of like killer use case to use that technology. And that’s, at least that’s the way I see it.
• Yeah, for sure because you mentioned before blockchain could be used in different industries outside of finance, whether it be healthcare and just adding a layer of trust and verifiability and even in voting, right, putting IDs and so forth on the blockchain.
• Yeah, I mean there’s so many use cases impossible to add them all up. I mean, it’s literally unlimited number of use cases potentially.
• Tell us about your role at Ripple. You’re engaging with central banks. Are you helping them to learn about CBDCs and also to build CBDCs?
• Yeah, all of the above. I mean, so my role is the lead for CBDC initiative within Ripple. Just to put that into context a little bit. So Ripple’s all about the internet of value and helping move money or value around the world as easy as it is as it is to move information today. We call it the internet of value. Within that currencies of different flavors is sort of the key, right. So we do work with native cryptos like XRP. And we do work with stable coins. And we do work with central bank digital currencies. So I think of them as three flavors of the same thing. So the characteristics of that you can use a digital currency for, they’re largely the same across those, right. But the way that they’re created and the way they’re issued and the way they’re governed and managed is very different. So as a company we can’t be in the internet of value without being involved in all three. Specific to CBDCs it’s not a brand new topic, but there’s certainly been a big uptick in interest from central banks over the last sort of, I would say three years or so, as they’ve seen other forms of digital money grow. They’ve seen things like Facebook’s DM come and go and pilots in China around the digital yuan. So they’ve got definitely more interested. Our sort of vision here is really to be an enabler for the central banks to be able to issue CBDC for several different use cases. But it’s a journey, right. I mean, central banks are amongst the most conservative organizations on the planet. Their main mission is financial stability in the country that they operate in. So there’s definitely education involved. We work doing education and we have a sandbox that we give them access to so they can play around with the technology. We also help them think through some of the policy considerations as well because often there are legal and policy implications. So we do that, but that’s really the start of it. Our goal really right now is to be working on what we call real money pilots. So one step beyond the proof of concept to say, okay, we are actually going to help the central bank build, implement our technology so they can actually mint their own currency and they can distribute it and use it and track it and so on and so forth. So that’s really the goal. And then ultimately beyond that, as we see, and the magic question is how long is it gonna take? But over the next several years, many countries will actually go into production at some scale, right. And we see that as a business opportunity for us as well.
• Now talk a bit about the dynamic between stablecoin and CBDCs because even myself and I think many folks still are questioning, can they coexist together? Are CBDs more on the, let’s say federal level while stablecoins are more on the retail level? Or is that right?
• Time will tell, right. I mean, the basic answer I think is absolutely they can and will coexist. I mean, I don’t wanna over confuse the lister said, but there is actually a category called synthetic CBDCs, which is essentially it’s a stablecoin issued by a commercial bank that’s backed by central bank money. So a true CBDC is issued and backed by a central bank. And you have synthetic CBDCs that would be issued by a commercial bank but backed by central amount money. And then you have stablecoin in multiple flavors. But if you think about a bank issued stablecoin that could be backed by other other assets other than just central bank money. In terms of coexistence, yeah, I think we will see that. In fact, there are some countries that are speculating that maybe stablecoin might come along faster because the regulatory side on the CBDC takes longer. Maybe there would be some use cases that might be more stablecoin suitable. I think the central banks certainly don’t want to see the whole world just be crypto and stablecoin because going back to their mission, part of their mission is fiscal policy and CBDC will count as m-zero money supply the same way the cash does. And they don’t wanna lose control of that. So I don’t know exactly know what the balance will be, but definitely coexistence between stable coins and CBDC.
• Yeah and even in the United States now we’re seeing a lot of discussion around stablecoin regulations. That seems to be a high priority because you have a lot of different stablecoin issuers, right. Different companies are doing things and there needs to be guardrails there. But also I can’t imagine a world where the government’s gonna allow these stablecoins to be flowing through the economy without them having the same control where they can help make sure the financial ecosystem is stable.
• Totally 100%. And if you look at a good case in point of that is you look at in the Europe, in the Euro zone, so the European Central Bank, they have been pretty clear that they’re very uncomfortable with the idea of unregulated stablecoin, euro stablecoin is being issued and also by companies that are outside of Europe. So that’s a little bit of sort of local defense politics going on there. But they see value in it. But they want to have some level of control. So you’re absolutely right.
• Now for those who are listening, who the concept of CBDCs are still new to them and maybe you can share a bit of your pitch what you tell some of these central banks in a meeting with them, right. What are the benefits of CBDCs?
• Yeah, it’s a really, it’s an interesting question. And I apologize. There’s no simple answers to any of these questions because it’s still early days, right. But the motivation for doing a CBDC does vary by country. It depends upon things like how sophisticated their existing payments schemes are. One of the core benefits is actually is payments efficiency. A lot of countries do not have the same level of advanced sort of faster payment schemes that we have in say, the UK or Australia and that’s been coming out in the US now. Well, you’ve got a pretty efficient system, right. And Joe Public doesn’t need, they have their credit card, their debit card and they don’t really need to know what happens under the covers. They just they give their money and they get their goods. It doesn’t work that efficiently in similar markets. So having a digital currency, right, so a CBDC would be the government version of that does allow for very efficient and low cost payments. Linked to that, one of the topics that’s always talked about is financial inclusion. Now, again, you might not think that’s a big deal in the US but there’s I think 30 or 40 million people in the US that are not banked. And then you go to other markets, Brazil, some of the other Latin countries, some of the Asian and African countries, the regular traditional banking system does not serve the low income people, right. Not well at all because they’re a public, sorry, a private company and they’re trying to make money for their shareholders and they can’t make money out of people with very low incomes. So one of the attractiveness attractive features around a CBDC is the government could say to like a startup bank or a FinTech, you can use this currency and you can create very, very low cost basic financial services, whether it’s a lending product or just savings or whatever. So that’s something that some of them are super interested in. The other one that’s comes up a lot and as you would imagine, being Ripple and we do a lot of work in cross-border, is cross-border payments are still not very efficient. What we have is super efficient, but not adopted all around the world at this stage. CBDs I think will play a part in that, again, because of the digital nature of it. But then Tony to me the big one here as part of, I guess the pitch if you like, is the basics of a CBDC, which is like you can create this national infrastructure around like wholesale interbank settlement and retail payments with CBDC as an alternative to cash. I view that as table stakes, right. That’s the basics, right. And what I really look forward to seeing is that being used as a platform for innovation. So FinTechs, other companies as long as they’re appropriately regulated coming up with a whole load of other use cases that maybe we haven’t even thought of yet that can use digital currency like a CBDC. So that platform for innovation, I think is, to me, if you’re just gonna try and improve things a little bit on efficiency, it’s like almost not worth it, right. But if you can set an environment up where you can see, like tying together some of these other blockchain use cases like bill payment or real estate all these sort of things can benefit from a super efficient payment system that a digital currency like a CBDC can offer. So to me, that’s why what I get excited about. Not the basic stuff.
• Well, it certainly makes sense, paradigm shift is happening with crypto and blockchain. It only makes sense that the fiat currencies will go in the blockchain and the benefits like you mentioned, are helping the unbanked and maybe settlement, instant settlement velocity and money and all these different things. And an economy running much faster with less lag if you can call it that. So tell us about the different central banks, if you can, that Ripple is currently working with and who’s piloting.
• Yeah. Well we have several projects and we had a good 2022 with some new projects being added. Most of them are still under NDA at the moment, so I can’t give you the details. But we have a number of projects in Europe. We have projects kicking off in other geographies as well. The two that we talk publicly about are in Bhutan and Palau and they’re super interesting because they’re two very different sort of models if you like. So in Bhutan for those of you that don’t know, it’s a small country in the Himalayas between China and India, just under a million population. They have quite a high level of literacy and mobile phone penetration, but not a very high financial literacy. So people are not very sophisticated with their money. And the other interesting factor about Bhutan is that’s a carbon negative country. I think we think it’s the only carbon negative country because I think 60 or 70% of the land is covered by trees and their major industries actually hydroelectric power, which they sell to India. So they’re actually creating the super climate focus and so forth. So they wanted to do under the auspices of the leadership of the country they wanted to get their level of financial literacy up and their level of technology, digital capabilities up as a country. So when we started talking to them the penny dropped here. It’s like, okay, so a CBDC would be a great place to start, we’ve actually already done a pilot around a wholesale CBDC. And we’re now in the midst of the pilot with the retail CBDC so sort of full life cycle from minting distributing through banks to individuals and making payments and so forth. And then also, but the fact that we’re running it on our technology, so the ledger that we use is a private instance of using the same tech as the XRP ledger. Which is hopefully is a very, very efficient low energy use blockchain, right. There’s no proof of work or proof of stake, different consensus mechanism. And it’s been designed from the ground up for money and payments. So, very, very, very, very, very efficient, very fast and low cost. So that sustainability part of it was a big reason why they wanted to work with us in Bhutan. And they’re small, right. But for us it was a perfect match because small means you’ve got all the decision makers in one place, right. You can get things done. If other end of the scale is trying to get things done in the US which when they do finally get done and massive, but you have, I don’t even know probably more regulatory or interested parties than you have fingers on your hands and toes on your feet, right. So getting things done more quickly was something we were keen in. And then the other one that’s interesting is Palau, right. So Palau is even smaller. But it was equally interested in the environment. They’re a small nation, a archipelago of islands in the Pacific and climate control is very, very high on their agenda, right. For lots of reasons. They have fishery concerns and sea level rises, all sorts of things, right. And talking to the president there, they wanted to have their own currency, but the challenge is they are a digitized, sorry, a dollarized country. So the US dollar is their official currency. So, we sat down with them and we came up with the idea of having a national stablecoin. So this is, when it gets rolled out at scale again, we are in the pilot stage now, a national, a government issued stablecoin pegged to the US dollar collateralized with a US bank beyond the mainland. So they’ll have a national currency, but it doesn’t disrupt their relationship with the US around the US dollar. They can use it for all sorts of uses. I mean, initially all be use for some internal efficiency within the country, but then think about tourism, right. Which is their main source of income. You could see scenarios where you could come in and you buy the stablecoin and then you get discounts on some of the tourism things. And then as they try and build up their cross border payments for business purposes, again, you can see a broader set of use cases. So, they’re investing in this technology for a national currency without having a central bank. So it’s not a CBDC because there is no central bank, but it’s a national government issued stablecoin, which is, we think that this is gonna be probably the first one in the world when it gets formalized.
• That’s interesting. So let’s say the United States issues the digital dollar CBDC will Palau then opt for that? Or is this kind of like a trial run with the national stablecoin? How would that co-exist?
• They could do, I mean, or it could co-exist, right. So the moment they have US fiat and then they’ll have the Palau stablecoin, which would be, they’ll be one is one from a value perspective. But they might still want to have their own currency because they can differentiate with things like I said the tourist, they could could say you’re gonna get a deal, a discount if you go with a stablecoin. So I think it’ll play out over time. I think there are some other countries that we’re working with that use other currencies. I don’t wanna give the game away too much. But they use other currencies as their currency and they may over time they may end up adopting the digital version of that if and when it comes along. But you can’t wait if you want to get things done, you wanna get value and you want to be an early adopter, you have to start. So it’s gonna be fascinating.
• Yeah and I was just thinking as you were saying that at the end of the day, it’s not like I have to carry around different paper currencies in my pocket. It’s all here, so it doesn’t even matter because it settles or moves and it matters matter seconds. So whether I have the stablecoin or the CBDC or the digital euro, whatever else, here you go. What do you take? Payment, boom and I’m done. It’s gonna be that simple because it’s gonna be on apps and on the blockchain.
• Yeah, exactly. And then you then you get into all sorts of interesting nuances around cross border and then can you use a CBDC from one country in another country? Or do you have to go through FX to get some kind of conversion? But just to go back to your phone, I have a bag here. This has got notes and coins from countries around the world that I’ve been to and I came back. And I don’t even know, half of it’s probably not even valid anymore, but I kind of keep it as a bit of a joke. It’s like, I don’t wanna carry that around with me.
• Right.
• I’d rather carry my phone.
• Exactly, exactly. So my next question was gonna be I read reports that Ripple along with other companies, I think believe the firm is digital assets and so forth are advising the FED if, I can’t remember if it was in New York FED or which one, on the digital dollar. And can you tell us anything about that? And as well as do you expect the digital dollar to come to be live this year?
• The answer to the last question is no.
• Okay.
• I did not expect there to be a digital dollar this year. We can maybe come back to that. So look, in the US as I mentioned earlier, it’s a complex environment. So we are a member of the Digital Dollar Association. So this is an independent group that is working on a digital dollar strategy and technology and they are providing sort of input and thought leadership to the FED. Yeah, we separately through our business have relationships with the FED both some of the local FEDs as well as the Federal Reserve Board. But I think in the US it’s gonna be a journey. I think we’ll see some regulation coming in around stablecoin probably before we’ll see regulation coming in around CBDC. There’s so many different interested parties and both on the hill and also in terms of commercial banks having thoughts across this. So I think it’s gonna take a while. I think the thing that might speed it up is if other major currencies accelerate what they’re doing. So if in Europe they move a lot more quickly, which they may do, I think that might encourage the US to move more quickly. And I think they have already accelerated their efforts thankfully, partly I think certainly some of the research was driven because driven by the work’s been going in China, right. And the potential rise of the yuan as a global currency could potentially impact the US dollar. So there’s a lot, I think there’s a long way to go, a lot of studying to be done. But just to put it into context there’s other major markets are doing similar things. So in Europe there’s a Digital Euro Association, which we’re also a member I’ve been working with and also Digital Pound Foundation in the UK. So these digital dollar project, euro pound all doing similar things, right. It’s really the private sector trying to encourage the public sector to move a bit more quickly.
• Sure and as I can imagine, there’s a layer of politics you alluded to it here in global geo macro politics whatever the terminology is, where China expanding to different countries and helping other countries build their infrastructure could easily inject the digital yuan into those economies because they’re so involved in the economic growth of those respective countries. I believe some in Africa and so forth. So it seems the US does need to move a bit fast here, assured they have to do their due diligence, but if we want to maintain the world reserve currency status.
• Yeah, the other thing I would add, Tony, that I think this is a trend I’ve seen emerging probably over the last nine months or so. That’s the level of interest in CBDCs from the commercial banks. So when CBDC research started a few years back, it was all central bank focused. And now I think this is not a US specific conversation. This is globally commercial banks see that there’s a very high likelihood that CBDs will become a reality. So rather than sort of ignoring them and worrying about that when they come along, a lot of the banks are now leaning in a bit more and saying, okay, this potentially changes some of the dynamics in the market. How do I take advantage of that, right? And the answer is get involved early, right. So we’re expecting that there to be more activity amongst commercial banks. And in fact, if you take Bhutan as an example, in the pilot phase two of the commercial banks are involved in the project already. So, you certainly, I don’t think, can’t do a retail CBDC realistically without the commercial banks being part of that model, part of the distribution model and onboarding for consumers like you and I.
• Sure. Question relating to Ripple’s ODL, on demand liquidity product. Will CBDCs eliminate the need for ODL and XRP as a bridge asset or will they enhance it because you still have these different CBDs running on different blockchains. Whether it be Algorand, Ethereum, I don’t know. What are your thoughts on that?
• I think theoretically they could impact it. But I think practically it’s a big plus. And let me sort of explain on that. I think the likelihood of individual countries coming up with pre-agreed exchange rate so you can do a direct CBDC to CBDC I think in most cases that’s highly unlikely and certainly highly unlikely in the short term. So I think there’s a need for a bridge, some kind of conversion. And having a CBDC I think is actually will be a big asset to our ODL business. Imagine you are in a received country and you are receiving ODL XRP into your country, having a digital currency like a CBDC will make the off ramp a lot more efficient than it is currently. You won’t have to go through an exchange for example. So I think ultimately it’s gonna be a very big plus for us from the ODL perspective.
• Now, with the CBDC is mostly being issued on the private ledger via the XRP ledger. Is it primarily up to the central banks to disclose supply the dynamics of the economics of how they handle the tokens? Or are used also involved in setting those guardrails and what information is being released at a public?
• Yeah, I think that’s gonna be entirely down to the central bank and the regulators. So the ledger is a separate ledger from the XRP ledger. I mean, there are interoperability characteristics such that if you wanted to transfer to the private from a private to public that’s something that can be done. But in terms of management of the ledger, that’s sort of within the control of the central bank. And that’s by design, right, because they’re not yet comfortable with the public ledger. Over time maybe that will change, right.
• Sure.
• So the rules I think will be set by the central bank and the regulators, the analogy being the same way with the decision to print more money. You know, all money’s made up, right. So the FED decides to print another 5 billion or 5 trillion dollars, right, that they have processes by which that’s signed off and so on and so on, right. So we’re expecting some similar processes. Hopefully not too slow, but the similar processes with CBDC.
• Now, there are folks, including myself at least here in the United States, are a bit concerned about, will the US digital dollar align with the constitution and the right to privacy? This is discussions that may be happening in other countries as well. What are your thoughts and what are the essential banks saying, in your conversations with them? Because people are looking at China and they’re like, we’re a bit worried because we’re seeing a social credit system and all these things.
• Yeah, no, this is a very big topic. I think privacy, I mean, it means different things to different people, but the basic privacy basic sort of right of privacy on what you spend your money on and so forth, I think is sacrosanct. And I think this absolutely the same in Europe. Same discussion going on within the Euro zone. But it’s gonna be I think largely policy driven. So I mean, at the moment if you take more than $10,000 in cash on a plane, you have to declare it, right. So there are already some rules in place. But if you walk in around with a few hundred dollars in your wallet, then that should be up to you. So some of the policies that have been looked at, for example, within the Euro zone is to say within up to a certain amount it’ll be anonymous. And above a certain amount, it won’t be, right, to whoever needs to see it. I think the thing we have to do is two things. I mean, the technology has to map onto what the policy makers want to do, right. So as you know, blockchains by definition public chains are pretty open, right. So there’s all of work going on in that space to be able to put the right sort of filters in place if you like. And then there’s also the sort of trust from the consumer perspective, right. If you’ve got a $10 bill and you give it to me, you and I are walking down the street, you’re giving $10, no one knows that you’re giving me $10, right. If it’s digital, people think, well, there’s a record of it somewhere, isn’t there? So how do I know the government’s not looking at that. So I think there’s work to be done policy sort of trust level, make sure people are comfortable that what’s being solved to them as the policy is actually being implemented. And then of course, the technology aspect as well.
• Yeah and I know a lot of that is still in early discussions is still a lot of iterations to be done there with the policies. Now with regards to the digital token economy that we’re headed to where everything is seems will be on the blockchain, do you believe CBDCs will be beneficial to the crypto market and asset class, given that people, consumers, the public, will be trained to understand and be educated by the governments as well? Here’s why this is different and then they can take that knowledge and say, oh, now I get Bitcoin, now I get XRP and so forth.
• No, a 100% that this is one of the things that attracted us to this whole concept was helping, sort of helping mainstream crypto, if you like, right. So people at the moment, a lot of the wallets are not that super user-friendly, right. And if you want to take your own destiny and manage your own keys that’s not for the normal person, right. So I think absolutely it is sort of the case, classic story of the rising tide lifts all ships, right. I know people use that all the time. But I really think it’s true. And I think if you look at all the money that exists, say in the US or any country there’s probably less than 1% is crypto, central bank money is less than 10%, you know, official sort of FED money. And then the rest of it is all commercial bank money. So, if there’s more CBDCs issued than currently there is cash that might move the dial a bit on CBDC as a percentage and hopefully crypto will increase as a percentage, right. But there’s still gonna be all three, right. There’s no scenario I could see where it’s all one or the other. So people should be thinking about these as three different flavors of digital money, right. And the wallets that we’re working on with central banks to make them sort of super user friendly. And so they can be used in an offline environment if there’s no internet, that is gonna benefit all three classes of digital money.
• Tell us about that. You mentioned the wallet. So are each of these central banks developing their own app, like I can can download the, let’s say the FED app. And then I get the digital dollar and maybe the Euro app, I don’t know and I get the digital euro?
• I think, well some of that’s been happening as part of the sort of more the experimentation and proof of concept and pilots. But I think as we’ve mentioned earlier I think it’s unlikely that you or I will have an account with the FED for our CBDC. So there will be different types of wallets. If you just take the basic concept of a wallet as somewhere to store the money, the central bank will have their own wallets or accounts, right. The commercial banks will receive money from the central bank. But then I think once this matures more we will see most likely the commercial banks offering the CBDC as an option in their existing wallets. I mean, it’s the same dilemma that we all have already with digital wallets, right. Do I try and have one wallet that covers everything? Or do I have different wallets for different banks or different use cases? And I think the market will ultimately decide, right. So we are taking a very open approach and we are working with different wallet providers for different types of use cases because I think it would make no sense for us to pick wallets and say, this is the wallet that’s gonna be the mega wallet of all wallets, right. I just don’t think that’s realistic.
• Oh yeah, sure. And the thought came to mind, I send people money via Chase QuickPay sometimes, sometimes it’s Venmo, sometimes I have to send it via PayPal. So maybe all those platforms they start integrating CBDCs. And it doesn’t matter what wallet I’m using, if I have to send you James, I don’t know, 50 CBDC, US digital dollar, whatever, it is right, I know you say, okay, I’ll send it to you via Venmo.
• Yeah, so yeah, I think there’s lots of different combinations here. But I think the ultimately we wanna see an environment where it’s not just very easy to use on the surface, but the actual settlement is instant as well, right. I mean, a lot of these existing wallets that exist are user-friendly but under the covers it’s still like a clearing cycle of a two or three days or whatever, right. So what we don’t wanna do is just put some nice, glossy front end on a really, like ancient creaky old infrastructure, right. The whole point here is you’re making the infrastructure brand new and amazingly fast and then the use cases can take advantage of that.
• So 2023 we’re in your first month, what can we expect, from you guys? Will there be announcements of new pilots? And is there anything else that you’re working on?
• We are already working flat out. We came back last week and we’re already into progressing deals, working on our product roadmap, working on some thought leadership pieces. So you’ll be seeing lots of different things. I’m not gonna preannounce anything obviously. But I think there’s gonna be a lot of activity on CBDCs this year, a ton.
• Well I can’t wait for those announcements. I’ll have to have you back on.
• I’m always happy to be back on.
• So a tough question for you and I’m not talking about price but rather adoption and where we’re going to. Where do you see the crypto asset class in five years? And maybe the vision for Ripple in five years as well.
• Yeah, look, I’m very, very high on the future for crypto as an asset class and for Ripple as well, obviously. I think one of the things that sort of slowed down the adoption a little bit as been this lack of clarity from a regulatory perspective, right. And then you get the market volatility. We’re obviously in a less than ideal market position right now, but I’m confident things will change. So I think you’ve gotta step back and go underlying what is the value in this technology and these assets? And the thing that excites me the most is the utility of it. And this is why I got into blockchain in the first place, is you can do things with this technology that you can’t do with the old technology. So I mean it sounds very altruistic and eye level but you can make the world a better place, right. You can do things, people can get paid more quickly. People in developing markets can get a 100% of what they’re owed rather than someone skimming off money, right. So there’s real tangible benefits here. And I think they all prevail, right. I think the regulatory landscape and the usability adoption that we talked about a few minutes ago, I think those two things will have to improve and will improve and then that will, I think, ultimately enable the potential these assets to be fully realized.
• I got some wrap up questions here for you. First is if you could create your own metaverse, what would the theme be?
• Oh God.
• Okay.
• Where would James escape to in the VR augmented reality role?
• Well, I love to travel and go to new places. And although I travel a lot with my job, I’m usually so busy back to back I very rarely get to see the countries I go to. So for me, I guess the ultimate metaverse would be you can go wherever you want whenever you want, then you can immerse yourself. If you wanna go to Machu Picchu and you know there’s not enough years in your life left because of all the other things on your bucket list you can just go there and immerse yourself. So for me, I think that would be cool. I would definitely still go to real places, right. But that to me would be amazing.
• Yeah, yeah absolutely. Funny enough, I have the, what’s it called, the Facebook, the Meta Oculus. And I’ve used certain apps where I went to Antarctica just to see what the landscape is like. I may never get to travel there. And I’ve been to different places in the world. But it’s a hard place to get to harsh conditions and so forth but if I can walk through Antarctica, right.
• Yeah, totally. I mean, yeah look at it on YouTube doesn’t do it for me. It’s not quite.
• Exactly.
• Now you need to put a cold suit on as well or something. So you can get the temperature thing as well.
• Exactly, full immersion. Rapid fire question. Favorite food?
• Can I have two? If I have that one, it’s anything apart from British food. Indian food and Japanese food, ultimate. Both I love equally.
• Awesome. Favorite musician or band?
• I’m gonna show my age here. I’m a sort of rock guy and my two favorite bands of all time are Led Zeppelin and Pink Floyd.
• Both great.
• And now even my kids love those bands and they’re teenagers, so.
• Me too. I play guitar, I love Zeppelin and of course Pink Floyd. I mean, this is great, great bands. Favorite movie?
• Movie, Pulp Fiction.
• Good one.
• I mean, I know it’s a bit too violent but it was, to me the impact was just amazing. And the whole way the story, circular around and things. So, great movie.
• Favorite book?
• I very rarely read fiction. I love non-fiction. In fact if I had to have only one book, it would be an Atlas of world history or something. So you could see things changing over time. I love that. Looking at that kind of stuff. More sort of analytical rather than the love story.
• And when you’re not working at Ripple, what are you doing for fun as a hobby?
• I’m an Avid Formula One viewer, not a driver. And golf is my other thing. I used to play golf a lot and the last few years I’ve not. So that’s my to-do this year is to get back into playing golf.
• Amazing, James, pleasure chatting with you. I’m excited to see the updates rollout this year at further announcements and so forth. And I would love to have you back on by that. Thank you for joining me today.
• Now, Tony, it’s been an absolute pleasure. I really enjoyed the conversation. And yeah, let’s try and do it again later in the year.