Stablecoin and Enterprise Blockchain: A Pairing for Success?

Transcript

Everyone, I'm pleased to present the next uh speakers for you. We have a fireside chat between Dennis Flad of Charter, Ra Iikner of the CVA, Christian Vieier of Stable Coin, and Pedro Lopez Belmont of Rish. Yeah, how you wish.

Good. Okay. So, thank you. Um, and welcome to our fireside chat on uh the topic uh stablecoin and enterprise blockchain solutions. This is the perfect pairing. Um I'm very happy to welcome our guests today with us. Uh he is on one side my co-chair uh RA. Uh we are both from the enterprise blockchain working group of the CVA and very glad uh to do this. Rica is um has a deep background Accenture and then now is as well independent consultant with blockchain experience and she is

actually a conductor of choirs in the past and one of our guests is Pedro. Pedro is uh I think many years you've been the lead blockchain expert and lead blockchain uh manager at Rishmo. Yeah. I think 11 years you've been there. So not all of them leading blockchain. Yeah. 11 years there and um and now has its own startup at the race where you're probably going to talk a bit about it. And um and you I know actually the fun fact is that when we were talking during Corona, you were always the one on the calls that was

sitting in front of his chalet. Yeah. In the fresh air. I quite enjoy them. Thank you so much. So um uh happy to be here. Also uh let me introduce our second speaker and uh this is Christian Biri who is CEO of Swiss Stablecoin. So, a super important company. If you have never heard about them, shame on you. No, of course, I'm very happy to have you here. And as we uh had the little alignment together as speakers, let's share some fun facts about each other. First of all, not only choirs, I was also conducting orchestras.

And um so we had some outside chalet balcony experience. But the interesting thing about Christian here is he will do a super super challenge trail run tomorrow for 50 plus kilometers in Logano. So wow what a preparation and also let me quickly introduce my wonderful co-chair Dennis who is an OG in blockchain and has the fantastic creative capability to do cartoons. So fantastic as well on blockchains. Yeah. Yes. Exactly. Absolutely. So let's deep dive and quickly on um or deep in in in the different topics and um I was wondering you know where are blockchains I mean when are they actually enterprise

ready and do you have real life examples for that? Well that's a good question. I think uh uh blockchain is a technology that uh it's in in in its purest form you know public decentralized um it takes a bit of uh thought and preparation uh to plug into enterprise uh use cases uh of course because enterprise likes uh predictability and uh and uh control right Um I I have in my hand uh two successful use cases at Rishmo. Uh we did a lot of

exploration. We started seven years ago and fast forward today uh the group is certifying all the intellectual property of older brands in blockchain since uh 2020 since covid actually and uh it has eight watchmaking brands with older products in the blockchain supported uh with NFTs supporting digital product passports. So if if you go and buy uh a watch from whatever Brisbane brand, it will have a digital passport with an NFT on on a public blockchain. So I think this shows there are many other examples from other companies but I

would say the penetration is still not good and I think is because uh this requires a bit more thought into how to plug uh how to blend the public uh decentralized uh approach with uh the the the private technologies uh you know enterprise technologies uh ERP PS and and so on that the companies are using and and want to keep because it lets them uh control and run their their businesses, right? We are speaking today about stable coins. So I think stable coins is a good example of this kind of interface that might

bring enterprises closer to uh to crypto and to blockchain and and in your in your view Christian what is the um you know what makes a blockchains enterprise ready? Yeah, I think um when I when we started out, we said we want to launch a stable coin which is basic is very wide used. So we must make sure that enterprises can use it and I think Pedro you hit on a very important point there. I think for enterprises it's not necessarily only the question is the blockchain itself enterprise ready. It starts way before that.

It starts with a business case. Is there an appealing business case? Um and part of the business case is then obviously to evaluate uh also whether the blockchain is is enterprise ready and it is can be integrated easily. Most of the companies probably from some of the banks don't really want to touch the blockchain directly. So you need to build those interfaces that they can interact with it. But you also need as Pedro um mentioned you need the interface that at the end of the day the transaction they do lands in their financial systems and they are not on the blockchain. So if you use uh your ERP system you need to have somehow have an interface that works seamlessly. All that needs to be

there so that a company can use it easily. For us an additional key point is also we believe it has to be a regulated environment. I don't think companies will jump onto um or using stable coins which are not regulated. Obviously stability and security all that comes in but the regulation is really key. Yes, absolutely. I mean we we in the enterprise working group we we once really identified five key success factors. So one is the use case as you say and basically there are three kinds of use cases either it's something totally new something that is was to totally expensive today and you can easily or it is it's a strategic point of view because you want to become

independent from big tax for example with a decentralized infrastructure then the tokenization of assets as well because in the enterprise world you have usually real life assets goods watches uh and so And then comes this integration as you said that both of you said this integration into the existing workflows because we're talking here enterprises the enterprises have a daily business that runs on existing legacy and existing systems you need to integrate with an SAP system you need to integrate with an accounting system you need to integrate with a payment system and etc and I think that's as well what what you said Petro that's why we don't see that many enterprise cases yet or we see

enterprise cases And I discussed it yesterday with with um with somebody here at the conference. We see they start as a blockchain case and then suddenly all the enterprises see oh yeah no we can trust each other that's no problem and then they say oh but then let's go offchain you know that's an interesting thing. Well, uh let me quickly add to that. Absolutely true points, but I think also where we uh I think should be really um considerate yesterday when we had also some other discussions with OEC's. What was the common denominator there? what you both mentioned and what you already realized at Rishmon, you need to have a business case, not just the technology you want to have. Uh and not only you need to identify what business problem situation

situations you want to solve and then really think about is this technology this approach actually the right fit. Just don't use technology because it's new technology, right? Make it make it feasible. make it also in the sense of uh when we talk about volatility in crypto and something not predictable and we not following policy or regulation that's of course with your Swiss stable coin quite in the realm of super aligned with regulation and forward thinking that's also a very important factor we shouldn't forget right so are are then you know stable coins I mean it's usually used for transactions and it's a trans transactional in uh ind instrument and tool. Um but is that

still the case or are we already a step further or what what is your opinion on that question? I think the uh the transaction case is the obvious one and is the the next one we will hopefully crack and and and uh go in big scale. Um but we can already see beyond that um companies are building ecosystems on the blockchain for example for sourcing um things um enterprise um uh steering and so on and so forth. Uh another example is that if you think about shipping worldwide shipping shipping companies are putting documents on the blockchain shipping

documents which then kind of build the backbone for the whole information flow. If you add on your stable coin to that, you have a bigger system. So it becomes eventually an integral part of an infrastructure which goes beyond I would say way beyond just the pure transaction. Stable coin obviously facilitates transaction but um it it feels it will become part of something uh bigger where also information and in case of Rishmo for example IP or stuff like that is on there. Um, and if you then add the fact that stable coins can be programmed as we all know, then you obviously open up a whole new uh world of possibilities you can do and uh improve your processes uh efficiencies,

automation. Yep. I think uh you you said something interesting which is focus focus on the use case and uh and uh start from uh from there. I think that's probably one of the the reasons why uh many cases uh have failed and the technology has not penetrated uh really deep yet. As you said, a lot of blockchain cases start a lot of use cases start by blockchain.

Personally, I I I I have a strong opinion about these blockchain consortions which uh they were really popular a few years ago. almost none uh uh remains today because uh also they were trying to build technology which I which I find awkward but uh essentially I think uh one needs to identify what's what are the friction points and how whatever technology it might not be a stable coin it might not be a blockchain it's applicable to any technology what's uh what's the technology um doing for that uh for that use case I believe uh at uh at Riftmont the technology is working

already for five years is is operational now it's a bit mind-blowing say that a blockchain use case is operational in a in a big enterprise but there it is because we were looking into the friction points you know what do we uh do in order to make uh this work what is this technology bringing and then we looked into the technology okay what are the risks of the technologies, a new technology, are these partners going to be here uh in a number of years? And we build actually a technology layer that was solving of these problems. And and I can tell you um we found um uh uh not long time ago that one of the blockchain

public layers that we were using was um was being abandoned and we migrated all the assets to another one. So all these elements that we analyzed and uh and that we identified we have been able to prove and to use the technologies afterwards with the stable coins is exactly the the same you were saying before uh that companies don't like volatility and in in terms of finance that's uh clear and in terms of uh of and and I think that's probably the reason why crypto has not penetrated into corporations and in in different industries, right? Stable coins definitely have the power to do so

because they are stable. You can treat them as another currency. And one of the pain points that uh that companies have is the currency uh change especially global companies they need to choose when you do they do transactions. They need to move money around. Hello stable coins uh to the rescue if if you will. I think that's a perfect use case. And I think it will be proved we will prove uh right uh in in short time because regulation it's clearly um uh moving ahead uh to to support also the the adoption from corporations.

Quite interesting factors. Christian share a little bit more about um what uh in your vision of Swiss stable coin is outside of the transactional area. What other things do you envision? What things are already happening? I know if you can share already now. Well, I think the um outside the pure transactional uh world we we see a lot of uh the developments going on but it is early days I would say to be fair. Um but an an example I think we we discussed before is um the fact that you can uh combine information basically onchain with with with transactions but

I think the the other component in in stable coins we should not forget is also the store of value element of it. Um, one of the examples we were discussing with a large um online um uh online company in Switzerland is they purchase a lot of uh goods obviously from abroad and their suppliers they're actually quite happy to receive stable coins as a payment means even if it's in Swiss Frank and not in their original currency or because it is in Swiss Frank and not original currency because it gives them a store a stable store of value which is for them more advantages than uh having local high uh inflation um currency for example. So there's that

impact we should not forget. There's obviously political layers which we have heard about a lot what's happening in the US and why they're pushing uh stable coins. So we we tend to think a lot about making a transaction cheaper, faster, quicker, but there's bigger kind of motivations around that that can make the usage of a stable coin uh quite uh attractive in certain cases which go beyond that. um beyond that simple um fact. Yeah, that that that's definitely a a trend that we see as well. Um that a lot a lot of large corporates are now starting really to expand their value chain as well in the finance area. So

integrating the supply chain into their value generation. I mean companies like Henkle for example or Bosch and so on they start really to to say okay you know um basically instead when you as a as a supplier you need faster um cash you can actually get that I can pay you within within a day uh with a reduction uh of the amount that I owe you uh so because unusual payment period is in 60 days and so on. So these corporates are really starting actually to as well provide financial services to their suppliers. So they're building like their own ecosystem to their strategic partners and that's actually where I

really see stable coins can become a crucial um component in there and as Petra said before I mean um I mean when you look at the history we heard as well in this conference a lot about yeah we can use stable coins for crossber payments and and these things and and I mean I mean the crossboard payments case in in in blockchain we're discussing things years and and and and I mean that was as well one of the original usea use use cases from Ripple revolutionizing the the crossber payments and it always struggled with getting the cash lack at the moment you came to go to corporates

and asked them okay you need to buy XOPs for doing the crossber payments they said oh oh why buying a separate currency when I have already uh Swiss Franks, US dollars and pounds. I have enough currencies to manage. I don't want to lock additional liquidity into a coin that is not liquid that I cannot use for other business for paying salaries for paying uh suppliers and so on. And I think that piece that was really holding enterprise blockchain solutions back I think that is now going away. Don't you think so?

Yes, I think uh also we we tend to uh to have this kind of tunnel vision and when we find something new uh we get over excited about that and and we don't really see all the uh work the leg work that needs to be done for uh for for that. I think if we compare the the state of the infrastructure uh now versus six, seven, eight, 10 years ago, it has matured a lot is more stable, is more performance uh performant. Uh so I think corporates now can look at it from a different

perspective, right? Um I think one also of the of the elements that is uh that is uh forgotten is um the the incentives for the adoption right. So if if you look at uh payments uh systems um you see that all these payment systems have been evolving uh uh along with they have taken time to uh to evolve uh they have not been built in a day right but sometimes you can speed up with adoption I'm fascinated particularly by by the adoption of cure code payments in China which probably uh

most of you were around. But what fascinates me is how the Chinese government moved from a non-technological uh society, not even regular phones, the one with the wheel that some of us remember and have used uh to uh QR code payments and it was through incentives, right? They incentivized clients providing discounts and they incentivized service providers providing discounts as well. So the the government subsidized the adoption of the technologies and they made it happen in in three four five uh five years. What puzles me is that blockchain one of the key pillars of blockchain is incentives.

It's built on incentives on finding the right incentives for all the actors. But then when we go to implement uh these solutions we totally uh forget about these incentives. we forget that, you know, it needs to work for everyone. It needs to be a win-win for for everyone. Uh but I think that's part of uh part of the game. And I think also I I know that I'm, you know, taking a a kind of side road here, but I think it's important for enterprise adoption.

We also forget the the point of decentralization. And I think decentralization brings a lot of efficiency because when it's decentralized and it has been verified whatever it is you don't need to reverify again you can build automation on top of uh on top of uh on top of that right so when we see we see a lot of solutions uh you know I'm going to mention the the previous uh keynote this Google solution um I I'm not going to to speak negatively about that, but I'm skeptical because what I was reading between the lines is a centralized solution

um with uh you know dressed as a decentralized as as blockchain and I'm not blaming them. I think they are trying to build a solution positively and with good intention. Uh but I think this has happened. We have a lot of examples in the last years of uh centralized solutions that have been uh built in the same way. Try to solve problems that the centralized solutions are are bringing. While we should have taken a different approach offchain uh data is is one of them. methods. It's been used and abused extensively to the point that companies finally say, "Okay, there is no difference between putting my information in a blockchain or what

I've been doing for years and decades in a centralized database in my system." Right? So, we need to pay attention also to that to bring the right value with the centralized technology and and going back to the topic, I think stable coins are more and more mature and keeping that value. One last uh point that we were discussing before I am very impressed by you know putting example USDC USDT they live in different blockchains they have decoupled the infrastructure layer from the application layer and I think that's super positive is one of the superpowers because it it gives a lot of flexibility using those stable coins.

Uh that's fantastic uh focus and um let's let's zoom out even a little bit further and think about if we talk about the infrastructure could change uh business models can change. You also mentioned something about uh the um why somebody should do that. Think about now when we zoom out for even outside financial aspects of an entity or the financial area. um as you worked for Richmore and as we are hope all um aware there are current enterprise blockchain use cases. Let's pick one example which we um might have um as a neutral example. Think about diamond trades the bear has with other diamond trading companies the tracer um um app or situation where you go away from a

centralized solution. It's a fully decentralized non-paper solution. you have a proof of the heritage origin on chain and it's you don't need to prove that again not by paper not by signature or something. So this is something we also think from um also our working group enterprise blockchain that these are use cases which at least entities can consider and research and I'm sure that there is a lot more potential for new business model new thinking of infrastructure finding efficiency implementing that of course with for example a stable coin within the entity structure within the business model and um I know for example Pedro you are venturing out in a even further in a different combination where you even

combine several emerging technologies not only blockchain. Would you like to elaborate a little bit on that? Maybe very very quickly. Yes. Metamines is building immersive uh the next generation of e-commerce through an immersive technology that uh that blends uh special web with AI and also with blockchain. And uh uh if you think about uh how you interact with e-commerce, there is no differentiation. The experience is mostly the same. Doesn't matter if you go to a luxury brand to Amazon. Uh you have a portfolio of products catalog and uh you can buy whatever you want. You put it in

your shopping cart in the shopping cart. You purchase it. That's it. That's the experience. So we want uh to do the experience much more immersive and give retailers the opportunity to differentiate across uh themselves and um one of the things that uh we are implementing is a tokenization layer both for payments and for real world uh assets. Uh so I'm not going to elaborate more on that because we don't have time. But uh in terms of uh payments, we plan to offer payments uh through fiat of course uh credit cards whatever but also through stable coins and some tokens.

Quite interesting. So maybe one one question um nearly closing in on the time. Christian do you think when we have this discussion what kind of future maybe architecture layer are we not seeing yet? Well, I think for me the looking at it it from a stable coin perspective, the interesting question at the moment is how the whole orchestration globally for stable coins will will uh pan out. Uh will there be tons of different stable coins which kind of don't work together or you have to go through a through an exchange to a um change from one to the other or will there be something like a new visa for stable coin that globally orchestrates the whole flow

independently of the blockchain independently of the stable coin you're using making sure that everything is also regulated um all the the regulations are compliant with and so on so forth and there is a lot competition at the moment obviously in that field. How that pans out, how the end game will look like, I'm not 100% sure yet. Um, but for the stable coins to really get the traction and become a global um payment, an important global payment means there needs to be some sort of orchestration of the whole thing. else it will be a fragmented nonfluid um non-liquid um market which is not going to be interesting particularly

particularly not for corporates might be okay for domestic cases but it's for globals and for corporates it's certainly not going to be the solution if if it's too complicated very good so last question if you would give one advice one recommendation on enterprise blockchain and stable coins to the audience. What would it be? Well, I'm going to take my hat of uh expertise in non-financial institution. Ditch the fees. Fees works very well in in finance and probably most of our audience are from from this field. Uh manufacturers especially economy of a

scale more volume cost reduction. So they want predictability not volatility. Ditch the fees. Get ready. It is coming. It's going to be a bit of a way still until it's fully there, but become ready and prepare yourself so that you can join the train. Okay. So, thank you very much uh on time and uh we are very excited and um yeah, see you let's see where the journey will take us. Thank you all. Thank you.