The Blockchain and Us: Interview with Caitlin Long, Symbiont

Transcript

[Music] there are so many applications of this technology and I think it's going to take a long time for it to weave its way into the system uh it may take a normal Tech upgrade cycle for it for it to fully uh weave its way into the system but I've said publicly I think within 20 years that financial services will be just software and the smart contracts technology in particular is going to automate a lot of the things that institutions and people handle today my name is Caitlyn long I'm chairman and president of symbient which is a smart contracts provider for institutional Financial use cases of distributed

ledgers I spent 22 years on Wall Street before making the jump in August 2016 to the uh blockchain World fulltime I happened to uh spent a lot of time in the the the freedom politics uh and it was impossible to avoid Bitcoin in that in those circles and I first came across it in 2012 got my first Bitcoin wallet in 2013 and uh started toh play around with it but it wasn't until 2014 that I figured out that this would actually have applications to the mainstream Financial Services industry it was more of a weekend hobby for for those first couple of years and uh then once I got the bug uh I was able to

evangelize internally where I was at the time at Morgan Stanley uh and in fact in fact actually the chief technology officer grabbed me as this started to to get going and said gosh you've got some gray hair and some experience uh and you seem to know something about this so will you join me on the uh on this working group of five people including himself and so I was able to learn a lot and vet on Morgan Stanley's behalf a lot of the opportunities that were coming its way and really got to watch the blockchain uh part of the industry as opposed to the Bitcoin part of the industry uh uh really grow up from uh from from the from The Roots think about what AT&T and Verizon did when the wi line business switched

over to wireless they pivoted they spotted it they they they understood it um on the flip side there are companies like Kodak who didn't understand that their old business model was becoming obsolete and didn't make the pivot um effectively and and so I think a lot of these Institutions and frankly a lot of the people will make the pivot effectively and I was lucky enough at Morgan Stanley to have had the opportunity to speak to the operations offsite and one of the things that I said to everyone was get this technology dig in on this technology start learning it because your jobs are going to change and and if you Embrace that concept now you will be so valuable look what happened to me I'm not a technologist and yet the chief technology officer

grabbed me because I was early to it and uh and I was able to make a contribution I know how big financial institutions work first of all they're not going to run out and do something Reckless with technology this is people's money and livelihood that they're working with right so this is these are slow upgrade processes these systems once they get implemented will run in parallel with the old systems for a while before you have a switch over to the new one that's standard in technology upgrade so I knew this was going to take time uh but yes sure there are antagonists uh the there are players who are threatened by their business model it's the AT&T Verizon Cod analogy again their business model is threatened

by this and of course they're going to do things to to try to slow down and water down the transformational network uh that are that are being developed and so there's a game theory approach to to how the uh technology is being rolled out in the markets for sure if one of the big three central banks adopts a uh a blockchainbased currency The Big Three being the US the UK and Japan and I Define those big three as being the the the um the the because they're the central banks of cross currency transactions so they're basically the Regional Central Banks through which all the Lesser um valued currencies go through uh in settlements um so so in Thailand for example uh

frequently the the Thai bot payments will clear through the bank of Japan on their way to the US for example so it's the intermediary bank is what I'm alluding to there when those intermediary Banks put their their currency on a distributed Ledger all of the corporations that deal with moving money around the world which is an incredibly complex process as you know will immediately switch over to using that Central Bank as its intermediary currency and right now the US dollar is the intermediary currency of trade but if somebody does actually come up with a meaningfully better payment rails for moving International money all the M multinational companies regardless of where they're they're based will immediately switch

no one wants to be first right everyone wants to be a fast follower but you certainly don't want to be last um and and in this example where I where I gave you know the three most important central banks that that see the greatest trading volume going through their currencies every day uh you don't want to be the last of the third to adopt uh a new payment system because again the the the economics are so compelling for corporate payments crossborder payments to go through whatever is the most liquid and easiest and fastest settlement currency and I do think that one can gazump the others if uh if they're first we think we own the money in our bank accounts but we don't the banks own the money we've lent it to them we think

they own we own the shares in our brokerage accounts or our retirement pensions but we don't we've lent those shares to the Securities dealers right so what I'd like to do as as somebody who's interested in in Freedom and property right I'd like to be able to have those property rights go back to the people who actually own the assets as opposed to having someone else own those assets in your name and then you have an IOU from the from those counterparties so that is actually very much a part of what of my passion in in this technology is giving assets back to the people who rightfully own them and taking out all this counterparty risk that was introduced into the system because the technology didn't exist to

settle this huge volume of trans actions so for example it used to be that instead of settling millions of transactions a day the banks would all settle up with each other so they maybe only would settle a dozen transactions a night they'd net all of their transactions right that made it easier um but it created this counterparty risk and these layers of intermediaries that exist in the financial services industry they don't need to exist anymore because we have the technology to settle all of those millions of transactions gross if you instead of having to net them and then have the institutions set settle on their netted amounts against each other power to the people yeah indeed power to Mom and Pop power to the mutual

funds who who own the assets on Mom and Pop's behalf the insurance companies who own the assets on Mom and Pop's behalf it used to be that they all owned those assets in their own name and then over 30 years it the pendulum swung where they were no longer owning the assets in their name now the pendulum is going to swing back and and what that's going to going to do is frankly make uh confidence in capital markets higher and I think ultimately everyone will Embrace this but as you can imagine there are people who make money off the system not accurately accounting for things and uh and so there there are certain uh parts of the financial system that are naturally going to fight it [Music]