 So John, you're very, very welcome to the IIEA. John is Managing Director of Digital Investment Banking in Banco Santander. Not the UK, but Banco Santander, the broader, almost global bank. John's experience comes from engineering, from trading, I guess proprietary trading in fact, in Chicago, to his own startup business to eventually Santander, bringing with him to Santander a host of a legion of learning experiences. And I would guess, though he didn't say so downstairs, that some of them were quite hard experiences and others were probably the formation of the man. I'll ask him maybe to introduce himself a little bit before he moves into his presentation because I get the impression that there's a lot of learning for all of us in his life story as well as in the presentation. Just say on behalf of the IIEA that you're all very welcome. Some of you are members, others of you are honored guests. IIEA is spending a good deal of time and attention to digital issues and to blockchain and you'll have seen from our program that there's been a series of events on that topic. And this is one of those, but I think it risks being one of the best of those that they haven't all been good. So John, please. Sure, Kevin, thank you very much for the introduction and thank you very much for the invitation to come and talk. I'm from Carlo originally and did my engineering degree in Dublin, UCD and like many people in the early 90s emigrated to the United States as an immigrant with no job, no money in order to live, looking up at skyscrapers thinking what the hell am I going to do now? And managed to work for a while as an engineer, did an MBA in finance, became a trader at the Chicago Board Options Exchange in the trading pits, entered the management consulting business, left that, founded a startup which became a blockchain startup, one of the early ones in 2012, raised money twice, spent it and failed and went back to consulting and ended up consulting for several banks, one of which is now my employer, Bank of Santander, which I joined in 2016 to run the blockchain lab, one of the very first bank run blockchain labs that was experimenting with the technology properly. And more recently then I left the blockchain lab inside the bank and joined a new unit in the investment bank called the digital investment bank which is really the warehouse for our advanced technology programs including blockchain, distributed ledger, artificial intelligence, robotics and other things. Although even though I'm responsible for all of these things globally I am actually the program manager for our blockchain digital assets program internally which is actually my own technical expertise. Anyway, I'm going to give a quick talk. I give a, I prefer business, I give a lot of talks. Can everybody hear me okay? Do I need this or not? I give a lot of talks on different topics related to blockchain technology, whether that's in front of regulators across the world, whether it's business leaders in Bank of Santander and groups such as this which have a wide range of different skills and expertise. So what I'm going to do is I'm going to run through quickly some foundational concepts about why we're here, get into why this technology is actually important for banks and the financial industry more broadly and then more specifically some of the things that we are doing along with other banks like Credit Suisse for example and other large global banks that are moving this technology almost to the point where it's going to become somewhat ubiquitous in the financial industry. Alright, so being an engineer I always like to go back to first principles and I like to start with the history of finance going all the way back to the very beginning. So there are two problems that have existed in finance since day one, day zero. Number one is the concept of counterparty risk. Now what does that mean? If you've got gold in your hand there is no counterparty to that gold but if you accumulate a lot of gold it's too heavy to carry. You've got to store it somewhere. So I give my gold to Kevin. I say Kevin you store the gold and Kevin gives me a paper ticket in return. That ticket is a claim against the gold in Kevin's gold vault. We are counterparties to a transaction. I have to trust that Kevin will redeem the gold when I go to redeem the gold. Anyway, this idea seems great but what actually happened is the gold vault operators realized they could issue as many tickets as they wanted because nobody ever came to redeem the gold. That's where Fractional Reserve was born. We'll get into that in a second. Problem number one in finance counterparty risk. Problem number two in finance is related. It's counter-fitting risk. How do you know that the gold is real? Well, you don't until our friend Archimedes appeared. Story's famous. He ran naked through the streets of Athens shouting Eureka. He had discovered a way to prove that the gold was real using the laws of physics. Does anybody here remember the equation for density? Very good. Mass overwhelming. A plus. Anyway, so our friend Archimedes had figured out a way to prove that the gold was real. So two problems in finance. Counter-party risk, counter-fitting risk. Now extrapolate forward to today's financial system. We have 25,000 banks in the world with banking licenses. We've got a million non-bank financial institutions, asset managers, hedge funds, pension funds, hedge funds, other stuff. And we're all counterparties to each other's transactions. All of this built on a system of Fractional Reserve where we hope, we do not know, but we hope that 10% of all the assets, all the cash in existence is on deposit in a central bank. Right? And we can imagine that a precarious system that's built on this leverage that's opaque has some potential systemic problems. We all know what happened in 2007, 2008. My father spent 42 years with AIB at the branch level. There was chaos in Ireland and all over the world. We know that. Thankfully we're out of it. It looks great in Dublin these days, actually. Let's not make the same mistake again. Blame the back side. Anyway, so in 2009, something new came along and this new thing was called Bitcoin. I won't get into the details too much, but Bitcoin was designed to operate entirely separate from the financial industry, to be its own mini financial system by itself. And within the context of its own network, it solves the two problems in finance. It solves counterfeiting risk. It solves counterparty risk. And it also solves the third problem from computer science just geeks would know about. PhD in artificial intelligence. Yes, sorry. Byzantine gender is a problem. How a distributed system reaches agreement on the overall state of the system. Interesting stuff. Anyway, what is Bitcoin? Bitcoin is essentially a payment system. It was designed to be, and this is a direct quote from the white paper that described it originally, peer-to-peer electronic cash. It's a payment system. And it's really three things. It's a secure distributed database or ledger. So it says there's a record, a ledger of all the transactions in the Bitcoin network running all over the world. Many, many copies. Number two, it's a communication protocol. So the ledger has the ability to communicate with itself. In other words, to reach agreement on the state of the ledger. So it's got the records are true. Number three, then Bitcoin, and this was the something new. Bitcoin is also a digital token. It's this idea of there's a digital representation of value in the ledger and in Bitcoin's purposes, it serves two functions. Number one is as an anti-spam mechanism. The ledger is open. In order to enter a transaction into the ledger, you actually have to record or pay some small amount of Bitcoin that limits the amount of transactions that could occur. And then number two, it also serves as an incentive mechanism. Some operators of the ledger validate and process transactions. That term, Bitcoin terminology is known as mining. I won't get into the reasons why or how it actually works. But some parts of the ledger, operators, validate transactions and they get rewarded by the ledger itself. And that ledger is known as a blockchain. Why is it called blockchain? It's a nice buzzword. It's called blockchain simply because Bitcoin is inefficient and has the ability only to validate transactions every 10 minutes. So every 10 minutes, block of transactions, validated. 10 minutes later, block of transactions validated. 10 minutes later, block of transactions validated. Now they're linked together. These blocks of transactions are linked together using mathematics, cryptography. That's okay. But what you have is block, block, block, block, blockchain, blocks. That's all it means. That's what blockchain means. It's no more than that. It's a very simple concept. Okay. Now, so all of this has led to an explosion of what are known as crypto currencies. This idea that you can have these digital representations of value out there trading in the marketplace, this is a deep topic by itself. Working for a bank, I'm not even supposed to talk about crypto currencies, but that's the world that I came from. I got inspired by Bitcoin in 2012 and started asking questions, how did it actually work, and went down the rabbit hole. Which, by the way, never ends. Am I right? Yes. Glory's laughing too. And there are tons of crypto currencies out there. I'm curious about blockchain on CNBC and Bloomberg. That's what they're really talking about. They're talking about the active liquid market for crypto currencies, Bitcoin, Ether, XRP, Litecoin. All of these things that people don't understand why they have value. There are very good reasons I think why they have value. It's a topic for another time. I'm happy to chat about that perhaps during Q&A. Okay. So what we have with Bitcoin, starting with Bitcoin, this idea of a shared ledger, this golden record, this universal source of truth where my copy of the ledger is the same as your copy of the ledger and I know it's true because of the power of mathematics and cryptography. There's something there. Now there's lots of discussions about different flames. Some of these ledgers are public, some of these ledgers are private. Banks are more inclined to operate private permissioned ledgers where we restrict access to the ledger systems to other banks. Up until recently the public ledger systems have not been particularly interesting although that is changing and it's changing because the technology is evolving. It's becoming more performant, it's becoming more secure and it's becoming easier to understand how to use from a legal and regulatory point of view. We did some of that recently ourselves. Now this idea of ledgers and records begs the question and this is where I try and connect the work that's come before from the public open-source blockchain world with banks. What is a bank? A bank is just a ledger. It's a record of who owns what. Now of course banks are special ledgers because they're wrapped up in regulation. Our bank well it's called part none, it's written in COBOL. We have COBOL engineers we're taking out. If anybody here programs COBOL you have a job tomorrow. You might have to move to Madrid and it lives it's a COBOL mainframe system and it lives inside an IBM Z-Series mainframe. I've never seen it. I've seen a photograph of this thing. It's as big as this room. I don't know why. Anyway we'll migrate off it eventually. But these ledger systems that banks have are very complicated. They're very cumbersome and every bank has its own ledger. So John Bank has John Ledgers Kevin's Bank has Kevin's Ledger multiplied by 25,000 and one of the big problems is we do business with each other but we don't trust each other. So John Bank does business with Kevin Bank we don't trust each other and because of that we've got a huge amount of reconciliation, auditing, CCP central clearing parties, CSD, central securities depositors, regulators auditors compliance. All of these things that essentially are there to verify that my ledger is the same but opposite of Kevin's ledger multiplied by 25,000 plus the million non-bank financial institutions on top. We've created a system architecture it's called of the financial industry of many banks many ledgers. Cumbersome, grew organically wasn't designed by anybody. Okay So let's imagine a new future. What if the banks were to share the same ledger? I don't think there would be just one ledger I think there would be lots of ledgers but let's just say, let's imagine if there was just one ledger for a minute that means that John Bank and Kevin Bank we do business together we don't trust each other but John Bank trusts the ledger and has a copy and Kevin Bank does business with Laurie Bank they don't trust each other but Kevin Bank trusts the ledger and has a copy and because of the power of mathematics, cryptography and laws of physics, we know that our copies of the ledger are true and in that regard we have done exactly the same thing as our comedés did 3,000 years ago. We have used the laws of physics to solve a human problem the problem of trust So it's not the concept about why blockchain or distributed ledger technology is powerful for financial services it's not, the technology is complicated but the concept is so simple it makes sense Now I don't think there would be just one ledger for everything there may be a ledger for payments there may be a ledger for bonds there could be a ledger for equities there could be a ledger for derivatives there could be a ledger for trade finance activities we trade sorry, yes that's an example of a shared ledger system and what we're talking about here really is just infrastructure the internet is infrastructure so we'll move from an architecture that banks many ledgers of today to a different world which will be many banks fewer ledgers and the regulators like that because they like the idea that if they had a special you know, lamp they could shine a light into this ledger and have an understanding of positions of counterparts bilaterally, multilaterally or across the entire system, systemic risk and that's why regulators like the answer so no need for banks to trust each other just like today because we don't but we trust the ledger anyway, the killer app in all of this then is this idea of programmability our ledger is a special ledger, it's a computer and what do computers do, they run programs so this idea of programmable value or programmable money now, the buzzword from the blockchain world is called smart contracts they're not smart they're not contracts in the legal sense they're little computer programs, scripts persistent scripts is probably a better term but the world calls them smart contracts let's call them smart contracts this idea that you can attach behavior automated behavior to value let me give you an example, so over here we have a legal contract legal contract lawyers hands up okay I spend too much time with you guys so I know something about this I'm trying to write some checks we take a legal contract which essentially is logic if then what happens and in a security it's a set of rights and obligations the cash flows, more or less the layman's person but you can turn that legal contract some of it anyway you can represent it as some of it as cold potentially, particularly simple logic if something happens then it's something else you take this cold you embed the cold in the ledger and now common parts to a transaction you enter into a securities transaction I buy one, you sell and there's a valuation that needs to be done associated with that transaction which determines the amount of collateral which needs to get posted by either counterpart well in today's world that's kind of done manually to a certain extent and there can be a discrepancy between as valuations change over time in the market the amount of collateral that Kevin Bank or John Bank should be posting and what actually happens is back office A and back office B get on the phone to each other and if we don't like that we call these guys and we end up in court now in the future and that's very cumbersome, a lot of paperwork back offices, for every front office sales person in the bank there are probably 5 to 7 people in the back office performing reconciliation tasks it's expensive, it's costly it's error-prone but you can in the future be able to take the valuation model link it to the collateral system as a 5 lines of code on the same ledger system we agree implicitly, sign the contract and we agree that this code represents the valuation model and it automatically posts collateral as things move no back office involved, we've agreed that's the code we both see it, fine so this idea of programmable value programmable money contractual behavior encapsulated in code that is visible and agreed to by all parties executes automatically based on certain predetermined criteria now, think about a bond when a company goes out and borrows money usually has interest payments known as coupons that pay quarterly and then there's a redemption when the principal has paid back you can automate the entire thing we've got CCPs, central clearing parties CSDs, paying agents, calculation agents all these intermediaries verifying that everything is supposed to work correctly check-in boxes we can automate all of it okay, so I work for a bank that is mostly retail and commercial branches small businesses, SMEs small and medium enterprises although I work for the investment bank which deals usually with large corporations and financial institutions but we looked at use cases across the bank in retail banking, corporate banking capital markets and we start by asking the same three questions that anybody asks regarding technology, when you look at a particular process in a business, it doesn't matter what it is you ask is it slow is it costly and is it error prone well if the answer is yes, yes and yes, now you've got let's do something with technology and if you add an additional layer on top which are there are different parties that need to interact together that don't necessarily trust each other that's a promising use case potentially for some kind of shared ledger technology and looking at these things how many people here have lived in different countries in their lives nearly everybody international payments sending dollars euros in carlo to dollars in chicago actually at the time it was pounds because that's what my father had to do to send me money when I was an immigrant in the united states took seven days to get there even today with transfer wise it can take three to five why does it take five days to send money and value are just ones and zero it's just data in a machine should be instant and back in san tedair now we actually have blockchain based international payment system that's running on four of our corridors brazil, mexico, san uk, spain it'll be on all ten soon instant transfer at very very tight spreads 30 basis points that's a nice user experience I used it myself, sent money to the united states fantastic, at a guaranteed rate even better now if it's usable person to person business to business you talk to a treasurer of an international technology company who is buying chips in taiwan and has to pay the research center and televieve well they probably have three bank accounts in taiwan because they need to be sure that they can make the payment to pay for the chips so the chips get on the boat to meet the just in time needs of their supply chain what about in israel when you have to pay the shekels to the local research team these phd cryptographers that are designing your next generation systems well you probably need three bank accounts there as well in case a glitch happens and a payment gets stuck because people don't go to work if they don't get paid now once you talk about business to business payments you can put automated things like what's called cash pooling this automated liquidity management for large companies that manage big pools of capital around the world you can move that capital instantly sweep it on top of it again difficult to do on existing analog transaction rails but the future which will be 24 7365 you can automate a lot of this and then when you get into the capital market side of things almost every single business process in capital markets cross currency swaps syndicated loans structured products trade finance bonds equities derivatives slow costly error prone this is the back offices the indicator that the answer is yes we know this in banking but we've lived with it and we've kind of accepted it no longer because we can't and the reason why we can't in banking accept this any longer is as an industry our return on tangible equity ROTE which is the measure is lower than our cost of capital as an industry and there are too many banks that's unsustainable that means we're in it's hard to survive if your return on equity is lower than your cost of capital doesn't make any sense so we have to figure out how to reduce costs number one and part of the story there is potentially blockchain systems for shared infrastructure why should we why should three banks build the same infrastructure why don't we just share the same infrastructure we're still going to compete with each other on products and services go to market with different ideas and concepts anyway so when you look at a bank any transaction process which is slow costly and error prone is probably a good target alright so where are we um in 2014 the very first bank study was conducted by Bank of Santander titled and this is publicly available now it's called it was titled the impact of crypto currencies on banks at the time banks were worried about Bitcoin and they submitted a tender out to the world to find a consultant to do that study I was the consultant that was selected to do the study I I found a job but I didn't know that at the time and the conclusion of the study was simple enough in that it's not about the coin it's not about the Bitcoin it's about the ledger it's about this idea of a shared universal source of truth that we could trust then going from 2014 there was a lot of proofs of concept prototypes into 2016 2017 we start to see real money pilots um supported by a lot of the consulting firms started getting interested whether it's you know Deloitte or Grand Thornton or Consensus and like there's a lot of expertise out there now um last year we formally made the decision let's take some of this to production which actually means now out of the lab and have to go through the new products committee 11 separate subcommittees one has 10 people none of whom understand technology all of whom have the power to say no none of them have the incentive to say yes I don't know why it took on that job actually we got here and additionally have to work with the regulators Santander we're Spanish Bank uh local regulators Banco de España at the central bank level as a proxy for European Central Bank and then the CNMB which is the Spanish equivalent of the FCA or the SEC it's the securities regulator so before you can do anything real you have to sit down with everybody internally all the lawyers 15 internal attorneys I'm not popular in the legal department we had outside counsel uh actually Alan and Overie Madrid office of A&O and London office of A&O um it was complicated to figure out how do we actually take these things live and now um the first live platforms that are blockchain based or distributed ledger based are available incrementally and you as a user so as a user I take out my Banco Santander app here and if I want to send euros to dollars I as a user all I see I don't see any blockchain I don't see anything complicated all I see is race midpoint is X, X plus 30 basis points which is almost nothing and I can send it to be in my account same day that's great there's a nice user experience the speed so the idea here is that blockchain is just infrastructure you as clients whether retail corporate, small and medium enterprise you'll never see any of this it's just infrastructure underneath kind of like the chips in your phone or just infrastructure use your phone you don't think about the chips right um I do but that's because that's because I'm weird anyway um so we, Banco Santander six weeks ago we issued a digital bond this gets a bit technical and I'm going to apologize in advance but some of you in the audience will understand exactly what this means we issued a digital bond a bond that's represented on the public Ethereum blockchain as a digital token the bond itself is a set of rights and obligations to cash flow but ownership of the bond is recorded on a blockchain instead of at CST central securities depository 20 million dollars dollar denominated financially inconsequential but at a bank whether it's one dollar or a billion dollars you still have to go to the new product committee and all the regulators so we picked a number that was sizable enough to be meaningful but if there was a problem that the risk wasn't so high one year maturity uh four coupons quarterly coupons and a fixed rate of interest of 1.98% priced right off our yield curve nothing special about this vanilla bond four legal entities four separate legal entities of the bank involved in the transaction Banco Santander SA which is the corporate parent in Madrid was the issuer on the investor side Santander securities services Treasury which is a Spanish custodian but their Treasury group was the investor I worked for the dealer so in that regard I was a bond salesman that day a bad one probably and then underneath all of this to make it all work as the custodian Santander security services which is actually licensed and regulated in custodian in Spain now custody in this new world changes a custodian's responsibility related to custody of cryptographic keys these long random numbers which control digital assets that's kind of technical uh custody of the digital cash because we didn't just digitize the security we also digitize the cash stable coins we talked about that earlier where you take real money on deposit in a bank account so the money is in a bank account and then you create digital tokens that are backed by the real money in the bank accounts like going to an amusement arcade you put 10 bucks in you get 10 bucks to tokens backed by real money maybe you can redeem them at the end same thing with digital money real money in a bank account create digital tokens to represent that cash and now you've got digital cash and you can use that to transact and actually Facebook here yes sorry can't see um Facebook made an announcement back in June related to Libra this idea you could build a payment system on a blockchain where you create a digital token backed by a basket of currencies where the basket of currencies pounds euros dollars Canadian dollars Singapore dollars I think was the mix something like that it was close but the real cash would be on deposit in custody accounts in banks around the world and then there's a kind of a digital token that sits on top very powerful compelling concept not new a consumer facing SDR special drawing right from the IMF which has been talked about since the 1960s banks haven't failed to deliver shame on us not new but very provocative and I think something like this is going to come into existence for sure if it isn't Facebook it'll be the Chinese Europeans we won't be able to move fast unfortunately anyway number nine on the list here is we use the public so there's lots of blockchains out there the two big ones number one is Bitcoin which is just a payment system really and the one that's most interesting from my point of view in the public world is Ethereum why it's programmable and do cool things with it so we were able to create a digital representation of a security bond digital representation of cash we were able to then take the digital cash digital digital bond and in the blockchain perform what's known as delivery versus payment this idea that you can exchange value cash for an investment simultaneously irrevocably and instantly and that's called delivery versus payment and usually we rely on an entity called a CCP a central clearing party to perform that why because if you're an issuer of a security and you're an investor you want to make sure that the transaction happens instantly it's not fair if the issuer ends up with both the cash and the security at the same time you need to verify that the transaction happens in blockchain terminology we call that atomic atomic it's cool yeah atomic smart contracts great name for a rock band anyway so I'm not going to spend a lot of time on this but here's the flows of how something like this works we've got the issuer of the security we've got the investor in security in the custodian green lines represent real cash real money this is the stuff well that matters red lines represent digital money so the first step is that the investor takes 20 million dollars of real money and they send those to a custodian account to the custodian real money dollars to dollars the custodian then verifies I got the dollars from the investor custodian creates digital tokens that represents the cash on the positive that custodian account the token is back to the investor that's called tokenization investor sends cash investor gets tokens now I'm an investor I've got 20 million dollars of digital cash what am I going to do with it well I'd like to invest it in the future there will be many digital securities to invest in but today there was only one and the one was the one that we issued a digital bond from Michael Santander and what happens then is very simply that the investor chooses to invest the money in the bond the bond itself rolls to the investor and that's done on the blockchain simultaneous or irrevocable exchange of title called delivery versus payments now there's a problem the issuer has 20 million dollars of digital tokens what can they do with it nothing in the future they'll be able to invest that digital cash into another security but today there was nothing else to do so the issuer now with the 20 million dollars of digital tokens needs to redeem the tokens for real cash for example they send the tokens back to the custodian that's red line number 5 custodian destroys the tokens sends them to the zero address and then the custodian transfers the real cash via Swift which is the message system we used to do that transfers the real cash from the custody account to the cash account of the issuer full cycle takes about an hour traditionally in today's world this process usually is T plus 3 it's a verify a lot of paperwork so you go from T3 issuer now has cash available instantly instead of 3 days or 5 days later to T0 which is instant capital optimization quite useful on the issuer side anyway I won't get into the rest now this tokenization concept this is a little bit cumbersome because it's kind of a fudge figure that is coming known as central bank digital currency CBDC and that's when central banks can issue digital currency themselves so there's currently a central bank there's two types of central bank money there's cash which is in your pocket that's central bank money that's kind of a claim against the central bank although it doesn't really represent anything it used to represent gold today it represents nothing it's kind of hard to get your head money it's just a faith-based concept and then we've got cash and then we've got reserve accounts that's kind of the electronic money that's in the central bank held on behalf of banks well in the future central banks will be able to issue directly to individuals or to institutions digital versions of central bank money so we at the bank of Santander and 15 other financial institutions Credit Suisse, UBS in Switzerland KBC, ING First Bank, Santander, Eurozone Barclays, Lloyd's Pounds, Bank of New York, Mellon State Street, Nasdaq dollars CIBC, Canadian dollars, MUFG Mizuho SMBC Japanese yen 15 banks have been working on creating central bank digital currency as a consortium for the last three and a half years I've been working on this for three and a half years quietly the central banks said to us, shh, say nothing and then our friends at Facebook announced Libra and all of a sudden thank you by the way for them because we were allowed to talk about what we've been doing and Finality International which was previously known as we call it the project utility settlement coin because we're blockchainers and that's a cool word cool name but the idea that you can take real cash on the positive in the central bank central bank money now central bank money is unique because it's got zero counterparty zero credit risk on my commercial bank money the money in your back account by the way is not central bank money it's commercial bank money subject to credit risk you have to trust that your financial institution ain't going to go under there was a time when we had a lot of trust I think we have less trust than we do today which is one of the reasons why we have government insurance on back accounts anyway, take real money on the positive in the central bank tokenize it create digital tokens and now all of a sudden on a shared letter or distributed letter system and now all of a sudden the ability to settle between banks wholesale because this is a wholesale system a billion dollars any time of the day or night 24, 7, 365 I want to settle a billion yen on midnight on a Saturday night I can't do it today why because the central bank payment systems known as real time growth settlement systems RTGS have windows target 2 in Europe is open 6 a.m. to 6 p.m. Monday and Friday that's your banking hours you can't go to the bank and make a payment after 6 o'clock on a Friday with tokenize money you can do it anytime and when you add some of the extra characteristics of programmability and security multi-currency digital target for finality international which is the name of the company now that was incorporated back in May of this year when we and the 15 other banks put 60 million dollars behind it the first live currency will probably be available for testing purposes if we're lucky Q3 Q2 Q3 2020 much closer than anybody actually thought why because we've been working on it for three and a half years and thanks to Facebook now and I really mean that this topic has gone to the very top of the highest levels of the regulators in central banks whether that's ECB Bank of England Federal Reserve Bank of China Bank of International Settlements which is the central bank of central banks in Basel and Switzerland this is a hot topic and it's going to happen and has all kinds of implications for transaction processes in banks we will have a new settlement rail and certain unique characteristics what are we going to do about that I don't know yet and longer term something like finality international can be used multi-currency the rail the payments rail and dollars, pounds, zeros, Canadian Japanese yen for security segments exchange and clearing, trade finance we can imagine for instance a use case potentially what we trade does is manage the workflow between buyers and sellers in an international transaction to minimize the open account risk instead of letters of credit doesn't have the payment system built the payment system is traditional rails we could in theory imagine a world where finality plugs in as the payment rail issuance of securities delivery versus payment I talked a bit about collateral management banks that pools the collateral when we do a transaction with another bank we have to post collateral against it all kinds of things like cross border payments whether it's person to person, business to business or fully automated cash management solutions now having said all that Dilbert always says it best one of the reasons why blockchain technology has been moving more slowly than we would like is because we've gotten distracted blockchain everywhere, oh my god job security for guys like me but the truth is that only certain transaction processes and workflows would genuinely benefit from shared ledger blockchain type solutions and we need to be pragmatic about what those are and our job today as technologists let's say in financial institutions or in large corporations or in consulting firms having done all of our proofs of concept and our research and development and exploration over the last few years is to figure out what are these use cases and see where we'll start and we'll go from there I hope I didn't take too long which is gracias a todos and I'll take any questions that you might have