 Sorry, good evening everyone, welcome to this crypto asset bubble session, which is developed in partnership with E-Tai Media Group. As the price of the Bitcoin sold by 13 fold in 2017 with extreme volatility, Bitcoin emerges from the underground world of nerves and criminals to become a mainstream investment today. And from today, there are close to 1,000 different crypto assets on the market, and also the combined market value of the cryptocurrencies surged to 540 billion. And the blockchain technology that underpins it has become impossible for the big financial institutions to ignore. So are these crypto assets finally coming into their own, or are they bubbles, fraud, Ponzi scheme index of money laundering, or is the seed of the next financial crisis, and maybe even worse? So recently, the central bank have entered the fray with several announcing that they are exploring or experimenting CBDC, which is central banking digital currency, with blockchain, and also other technologies. And because today, technology developers and investors and regulators and central bankers see crypto assets in different ways, and few people can ever be on the same page. So I have a very big ambition today for our session that I hope we can help chart the future path for Bitcoin, crypto assets, ICO, and blockchain technology all together. And you will be a little bit skeptical for me, but I do have this big ambition because we have a big and we have very good panel today. And so then we introduce them very briefly to my left, Mr. Nail Rimmer, and he is the general partner and co-founder of the index Ventures in Switzerland. And next to him, Jennifer Jules Scott, she is the principal of the red ink partners in Hong Kong, and also she is a young global leader. And next to her, Professor Robert Schiller, and everyone knows you. He is the Sterling Professor of Economics in Yale University in the United States. And the last but not least, Ceciline Skinsley. She is the deputy governor of the Swedish central bank, which name is Svidrigs risk bank. I'm not sure am I right or not. Yeah, in Sweden. Welcome so much. Thank you very much. And before we start the debate and dialogue, can I do a very quick poll? Just like I learned from Jenny yesterday. Are you pro or against Bitcoin? Pro? Can I be halfway? Can we do pause? You can, you can. And against? No? Okay. Well. And what about you? Are you a pro Bitcoin? And how many of you are against Bitcoin? Or only a few of you? Great. It's the starting point. We should see, we can do this again in an hour. Of course, yeah, right, exactly, exactly what I mean. Exactly, yeah. So my first question is for Professor Schiller. As a Nobel Prize laureate and also the world best economist on asset bubble and the behavioral finance. And you are among the first group of economists who blame Bitcoin as a big bubble there. And in your view, how do you assess the fundamental value of the Bitcoin? Do you think that the Bitcoin, ETH and the Ripples will replace a large fraction of the conventional money someday? Okay, maybe I can step back and put some historical perspective. Sure. There have been repeated proposals to change the currency. Very interesting proposal came in 1879 from Simon Newcomb, a famous astronomer who was reacting to the instability of the gold standard. And he proposed something called the compensated dollar, which is paper money backed by gold, but the gold content of the dollar is constantly changed by a monetary authority to keep the buying power absolutely constant. Need idea, it was talked about for a long time. Never, never happened, okay. Another need idea in Chile in 1967, they introduced a new unit of account called the Unidad de Fomento. Again, aiming at stability. This Unidad de Fomento is a daily interpolated Chilean consumer price index. There's a website, Unidad de Fomento.something. You can look at it. You can make payments now, it's an electronic system. And it had a good foundation. But the funny thing is it only spread geographically. Mexico has a Unidad de Inversión, there are other Latin American countries. So the spread of these ideas, although they're good ideas, seems to me to have like a geographical or epidemic nature to it. Bitcoin is another really clever idea. I'm impressed with the technology. And it is spreading in certain quarters. There are certain kinds of people who love this. But it doesn't, in my mind, it seems to me it's technology for something else. It's gone viral as a currency. And the blockchain is important, but it's not going to be stable. And so I think, you asked me whether I'm for it or against it. I am for the Unidad de Fomento. And I will argue that every country should adopt what Chile has invented. And maybe we don't do that because we're not in the habit of listening to Chile or we don't like the story or the sound of how it came about. But there are other ideas. And so I tend to think of Bitcoin as an experiment. It's an interesting experiment. It's not a permanent feature of our lives. We're overemphasizing Bitcoin. We should broaden it out to crypto, toward blockchain, which will have other applications. But in Chile's case, the underlining technology is different from the technology in Bitcoin, which is blockchain. It still is digital now. I mean, you end up using a website to... Okay. And it has real value. Let me say, in any other country in the world, there's inflation. You are a renter. You pay a rent which is fixed during the year and change maybe once a year, or then there's a nuisance of changing it. And so that means that the real value of the rent you pay has a jagged and sawtooth pattern. Every year, it goes down until suddenly it goes up again. That's a dumb idea. Why do we still do it? In Chile, they've got it worked out. You do your rent in UFs, Unidad de Fomento. And it's absolutely stable. Why aren't we imitating that? Okay. Then you have an answer to my question. Do you think that down the road, the Bitcoin will occupy the more and more share of the payment and the money share we have today? And also, Governor, maybe you want to answer this question, too. Well, yeah, I don't think it's big on payments. You agree on that. I think to define Bitcoin as a cryptocurrency. In first place, do you think it's a currency or it's not a currency? I think it's a very lousy currency. I don't think it's a payment. It's a very lousy payment. I don't think Bitcoin is disrupting currency or money. Bitcoin is disrupting gold. If you think about what gold and reserve is doing today, Bitcoin can do that and do that better. And I couldn't help. So you mean it's an asset instead of a currency? But Governor, do you agree with Professor Shiloh? I want to represent the conventional issuers of money, which is central banking. Money, if you think about it, I'm not going to go. I'll do a little bit of history as well. So money is a social convention that mankind has come up with to facilitate store of value and facilitate medium of exchange. Otherwise, we would go into barter trading, and that's horribly inefficient. And also, you need to account. And we have moved from gold to in Sweden. We were poor, so we used copper. And we have evolved into paper notes. And now we have the greater part of conventional money, fiat money, is actually produced by the commercial banks. But it starts with a central bank version of money. But in order for money to be defined as good money, efficient money, it has to be a store of value that is pretty stable, at least in consumption. Consumers, from a consumer's stable consumer perspective. So inflation, it must have price stability. And it has to be enough people are prepared to accept that version of money in a country or in a currency union, et cetera. So in my view, cryptocurrencies, Bitcoin and the others, the way I've seen them so far, they don't meet the criteria for be called money. They can be called an asset, fine. But they are not a very good version of money because it's not a very stable store of value. They fluctuate a lot. And it's not a very efficient medium of exchange because you don't buy your groceries with Bitcoin or you don't get your salaries in Bitcoin. And you can certainly not pay your taxes in Bitcoin. There, you still have to use the conventional versions of money. But Japan government defined Bitcoin as a currency. I've heard about that, too. But you still as a taxpayer in Japan have to pay your taxes in yen. And that is the critical factor that creates the great externality effects that makes money efficient in an economy. Yeah. So Jennifer, I'm sorry to intercut you. And do you agree with the professor and do you agree with the governor, please? I disagree. Which part? First of all, I pick up what professor said there are certain type of people pick up Bitcoin. I can be more specific what type of people. The type of people who are a little bit rebel. The type of people who think why for, in fact, I'll talk about history. The first central bank was created in Sweden in 1668. And for 350 years, we have central banks have unchallenged the authority to issue money. And you earn that money. And the money is inflationary. Bitcoin is deflationary. Bitcoin is completely mathematical. Deflation is a problem, same, similar with the gold. So we abandon the gold standard. So if you use currency, I might agree. But if you use Bitcoin as store value, why would I earn my hard-earned money through my hard work? And next year, we'll worth less. That's what happened with the fiat currency. But with Bitcoin, there are only totally in the world there will ever be 21 million Bitcoins. So the value to create more money has to be deflationary. So as a store value, I think Bitcoin is a very, very efficient. And either people like you or not, it's not going to go away. But what if there's a collapse of the price of the Bitcoin of some time, maybe this year or next year? Doesn't matter. What do we about the storage of the value if you want to keep the value? But maybe, yeah, please. I mean, currencies have collapsed many times. Many times, right. Because of the back, right? And just so, I mean. But maybe not Bitcoin, maybe another currency because the latest news that some kind of rating agency, just rating the Bitcoin and some other cryptocurrencies and their conclusion is that the Bitcoin is not a good one. But still, the price is very, very high. I would argue that, and first of all, I'm very uncomfortable disagreeing about price winning economists on anything. You can feel free to overrule anything I'll say. But what I would say is that the reason I'm for this is that I'm an investor in technology and innovation. And I think this is one of the most audacious, generous, and profound inventions that we've witnessed. That certainly I've witnessed in my career. And it does have the ability to help many, many people. But we're nine years into this experiment. And the experiment has gone well at times. And more poorly, right now it looks like it's working. But it has by no means succeeded. And it could fail completely and go to zero and lose people's confidence. But it has accomplished a number of things that I think are remarkable. It's completely trustworthy with no central authority or entity controlling it, a distributed ledger. It's a strength or a problem. Think about the security issue. Think about the hack issue. Right. So it can't solve all problems. I think the problem it really is trying to solve is being exposed to currencies that are moved around at the whim of governments who may or may not know what they're doing or may or may not have your interests at heart. The people I know when you talk about people who own Bitcoin are some very, very, I know some very, very smart, educated, rational people who grew up in Argentina and witnessed their parents going to the supermarket with shopping bags full of currency and spending it all in one day because they're worried that the next day it would be worth less. For them, they don't have a lot of faith in the Argentinian government's ability to defend their currency, maintain its value. And they also like the idea of it being transportable. So when you talk about somebody using an unidad fermento, what happens if they cross the border? What about refugees? What about people in Iran or in camps in Turkey? So it's a very convenient reassuring way of storing value. Sure, it's super volatile. It's actually quite inconvenient to use. And there have been many issues with it, related not so much to Bitcoin, but to the exchanges and to the wallets that you have to use, which are kind of hacked together and not particularly convenient. So it's still a hobbyist thing. But as I say, we're only nine years into this thing, and it's still trusted. And it's still doing what it set out to do, which I find really remarkable. Yeah, I think a nail and the Geneva raise a very important point is that the authority and money authority, some monetary authority or all money authorities on this world, is not that trustworthy because they issue too much money. Governor, do you agree with them? So I can't talk for all the central banks of the world through all through history. I think there is a point there that in countries, I mean, money is a trust. And if you give up too much of it, you cause inflation. Or if you give up too little of it, you cause deflation. And that hurts people. And mankind, as I said before, has been struggling with this for thousands of years. You have agreed about gold. You had an intrinsic value. We fell apart with inflation. You could always melt it down and start over again. And then for the last 300, 400 years, we have used more and more of paper notes. And then we have gone into the digital banking system. And I understand there are countries where you don't trust the public authorities. And you see this as an alternative. I think it's a very poor alternative, to be honest, given that it's too volatile to be used as money. I have no problems if people want to invest in it and use it as an asset. I mean, you can use anything that other people agree has a value, you can do that. But if you're talking of money in a efficient economy over time, it's much better if you have a trustworthy authority that issues enough money, not too little and not too much. And the way it works now in most central banks, and there are exceptions, I agree, is that we don't connect the money, amount of money we issue and the price we put it to gold. But we have something else. We have the law. The law is the gold of modern central banking. And the laws in most countries now say, you should give out money and put the price on money over the interest rate to the extent that you cause price stability, which is roughly one to 3%, because you have to allow for relative price changes. That's how it works. And it has worked tremendously well in most countries. But if you get it wrong, you get it wrong. But you also got it wrong. You will get it wrong in the cryptocurrency world as well if there are too much of us interest holding this versus how much will be issued. So that is the challenge we all have to face when we are in the money business. I think at this stage we have some consensus that the Bitcoin is more asset instead of a currency. But if it is good asset, shall we regulate it? Professor Schiller. I was impressed when I visited Lithuania recently, small talk that I had there with some Bitcoin enthusiasts. Someone said in early 1940s, Lithuania was annexed by the Soviet Union. And they said, do you know what happened to you? If you owned a house and you had a portfolio of investments in Lithuania, well, they probably took it. They defined you as a capitalist tool or something and they took it. Not only that, but they sent you to Siberia as well. If you had had Bitcoin back then, they couldn't have taken it. That led me to stop and think, really, you know, I don't trust foreign governments taking over but those things have actually happened in recent history. On the other hand, I think you would have probably lost your Bitcoin too, right? If all those things happened, you would lose your computer and it would be gone. So maybe the whole premise. I don't have the full story of what we're... No, I think you wouldn't lose it. If you keep your private key as long as you can access to internet, you can always access it. Yeah, you have to memorize it then? You can memorize your private key. You can memorize your... Does anybody do that? Of course. And people put their private key into a safe. A lot of people now, they use a hardware wallet to keep their crypto assets and to keep their private key into a safe. And I think in future, a lot of private banks, one of the services they can provide to their clients is to keep the private key of their digital assets. And I think in terms of... We keep referring back to Bitcoin as currency or asset. It reminds me, perhaps this conversation 10 years down the road will sound a little bit like when we say, my space doesn't really work, therefore internet probably won't work, right? So I think this is... So now we have WeChat. Now we have WeChat. Because we have to realize this is an infancy stage of a potentially multi-decade project. And technology right now is not perfect. I don't argue for a second that crypto assets right now are all perfect. But you're asking where Bitcoin price is going to be. To me, I have... Hold on, please. I will ask you later on. I don't want to go back to regulation. No, I want you... Yes, I will give you my two cents on that. But the point I was trying to make is that pricing of Bitcoin, since the first time I read Satoshi Nakamoto's white paper, I realized pricing of Bitcoin... Have you met him? I wish. I was joking this morning. I think President Trump tomorrow probably going to announce that he's Satoshi. Quite popular. Is he that smart? He's the smartest guy in the world. Maybe in a different way. So back to my point, I think we overemphasize Bitcoin's pricing. I think that's really misleading. Because the fact that people keep talking about Bitcoin that is below 10,000, it's a disaster, or above 10,000, it's crazy. I actually think the fact that Bitcoin is still alive, still attracts so much attention. The fact that we're talking about Bitcoin in doubles with a Nobel Prize winner, a central bank governor, and seasoned investors. I think it's very good. But in your mind... It means it's a powerful idea. Right. Which is your favorite cryptocurrency? Bitcoin, ETH, or Ripple? I have them all. I don't have Ripple. I have them all. Why don't you have Ripple? Because the price is so low? No. I think one of the spirits of people who came into this space and the very early on, that they knew we exchanged a little bit about this is decentralization. Satoshi invented the Bitcoin protocol in that ashes of 2008 financial crisis when everybody lost their faith in central bank. And so he created this decentralized peer-to-peer payment. He really intended to be a payment system. He invented this peer-to-peer payment system really is to establish some peer-to-peer economy with no intervention of central bank. By the way, do you mean that... Do you hint that the bitcoins can self-regulate themselves? There's no need of the regulation at all? Okay. This is a very good question. We keep comparing Bitcoin with U.S. dollar. Let me say this. Behind Bitcoin, there's no Bitcoin central bank. There's no Bitcoin Inc. CEO overpaid and when it's crashed and ask taxpayers money to bail it out, Bitcoin behind it... There's no centralized institution behind Bitcoin, you know, borrow 200 billion debt. You're right. So just in short, is more trust or less trust in the lack of the central bank? I must protest here. You're saying that people don't trust central banks anymore. Let me get you an example of how at least they trust the central bank and the money in Sweden. The number of transactions in Bitcoin is one-thirtieth of the number of transactions done by cards which is a proxy for central bank money through the banking system in Sweden. So it can be an asset. I think we can agree on that. I also think we can agree on that the technology is promising but it is not a very well-spread payment method. So a lot of people, most people and most transactions in the world are still done with conventional currencies issued by central banks. What about regulation? I understand that there are people who have different views but we still have a very competitive product. Can I comment on regulation? So I actually do think it needs to be regulated because I think anything that I would want to become mainstream needs to be regulated. It needs to exist in society and can't be this huge overhang over it that promises to change everything because the regulator decides this is no longer cool. So even, you know, and by the way, this is the same story of any fintech innovation and the best ones have always done things that were a little bit beyond the boundaries of the current regulatory framework but they've done it in a responsible way and they've actually gone and asked the regulator to take a look at what they're doing. The UK, for instance, was I think admirable in creating this sandbox to allow them to play and do limited damage if things don't work assuming that they were trying to do something of value. So basically I think that there will be object lessons and I do think this is kind of one of the things I worry about and actually referring to one of the talks I saw you give Professor about narratives. I do believe a government will probably come down very hard on a cryptocurrency and make it a lesson and what I would love to see is for there to be a role model where somebody actually takes an application and works with a government and does something that corresponds to a certain regulatory framework but this can only be done in one country at a time. Nobody can regulate all of Bitcoin you can regulate the use of Bitcoin in your group of countries. Which country in your mind? I think the most forward-thinking countries should probably do this. England? Perhaps. No. Perhaps Sweden. Then back to regulation. You are very right that we need to regulate the thing that becomes a mainstream investment target but at the same time the question is the sandbox will not solve the problem. You are going to regulate the Bitcoin ICOs and how to regulate the ICOs and Bitcoins? There are already regulations in place here some of them. If you see it as an asset which most countries do there is investor protection consumer protection legislation there has been some authorities clamping down on platforms and if you use it for illegal transactions if you are involved in drug dealing anti-money laundering financing terrorists you will be hunted by the authorities independent of if you pay in dollars or in Bitcoins or in cupcakes or whatever you use. The problem is that you cannot regulate Bitcoin today in terms of the money laundering but it is the activity that is going to be clamped on independent of which currency you use. I think the regulation in the past few months even is more and more clear so you can apart from China China had a hard stop in terms of Do you think China made a mistake? I think for China where China is right now China needs to give a hard stop in terms of ICOs but over a longer term we keep hearing that PBOC has been contemplating issuing state issued a hard cryptocurrency so I can see why... You mean the central bank you mean the central banking digital currency Yes. With that I think it is actually very valuable for PBOC you can have perfect capital control you can have perfect tax system to collect the tax but back to the point to governor central bank people don't trust the central bank completely anymore but what I find very very valuable the gift from Satoshi to the world is to for many many years we just assume that money should come from central bank but because of Bitcoin because of cryptocurrency it really provoked a lot of people start to think what is money where money should come from how much our money should be I think that kind of debate is healthy Very good and also very quick question for Jennifer do you have trust in monetary authority in Hong Kong I do I use currency every day but I also want part of my portfolio I want some of my assets has zero correlation to central bank policy and which is cryptocurrency is providing right now Investment portfolio kind of thinking diversification but also I think in terms of tokens right now you can issue security token or utility token utility token pretty much apart from China's hard stop but pretty much every country self-regulate if you issue security token pretty much every country will either have existing security laws to govern your security token or their central bank has issued very clear indication in terms of how you regulate security token Professor please I was recently involved in discussion with the Chicago Mercantile Exchange about creating a futures market and regulators had to approve the futures market in Bitcoin and I think that was only last month that that happened I initially opposed the idea I'm not quite to your level of enthusiasm I think the media maybe means to represent you a little bit yeah sometimes that happens but the thing is that what struck me about this is that while you it was possible to short Bitcoin via some of the exchanges it has been difficult to short and financial theory says if something is not shortable then it can be taken over by enthusiasts and the doubters no longer have an adequate way of betting against it so we've just seen both the SIBO and the CME have both created futures markets for Bitcoin and that might make it more stable now in fact when people ask me should I invest in Bitcoin I have a follow up question long or short what are you thinking of and I can't I can't really what's your view long or short at this moment hold I would say long but not more than you can afford to lose completely because it's an experiment and we want the experiment to succeed but one sure way of making it fail is if too many people lose their life savings then it will go to zero because they'll sell they'll sell the rest and also hold for your hold but at the same time also think let's be honest right now there are about more than a thousand cryptocurrencies in the market right now I would say 1995 perhaps even a higher number of those cryptocurrencies would not be around in three years time because a lot of those companies took these window opportunities issue their token with a very simple business idea and put into a white paper so essentially they are using seed stage VC, angel stage business proposal to seek IPO level of fund raising and I think that's not going to end well another thing is I have to give some feedback to media I think media right now are the media right now overly focus on the pricing and not paying actually we are not you mentioned the central bank digital currency we have just published an article from the deputy governor of the PBOC and he declared the thinking, the forward thinking of the CBDC plan in China by the PBOC and you talk about the blockchain technology but according to the plan from the PBOC they said that maybe we are not going to use the blockchain as the as the technology for the CBDC in their plan so governor you also have a corona plan so what kind of technology are you going to utilize it has a different completely starting point the research project we run at the Riksbank and the starting point we have is that technologically and legally it becomes very easy in Sweden to live completely cashless and there is no legal obligation for banks or for shops to take notes and coins and it's very easy to use cards and instant payment apps so we see a rapid decrease in the value of circulation in notes and coins and as a central bank we are sort of neutral about this we think that people should be able to use the payment methods that they find safe and efficient as long as they are safe and efficient however going from a non cash society into a potential non cash society where notes and coins are no longer useful as a store of value well it can still be a store of value but not as a medium of exchange is a new society and it opens up a number of intricate questions such as can we still say as a central bank that we provide a safe and efficient payment system is it accessible for everybody because in reality it means that everybody has to be a part of the commercial banking system and not everybody wants to be a part of the commercial banking system or not even allowed into it so that is the starting point we have to look at the consequences of a cashless society is it still safe and efficient if we go in there and if we find that there is a need for a public sector digital version we are looking into what sort of features that would have and that is what we call potentially an e-crona and it's far away into the future it's not something that we are doing near and no we don't know if we're going to use blockchain or any other technology but it would be work as a one to one exchange rate versus the corona that we have which is the national currency and it would potentially work as a complement to the notes and coins that we provide so that people also in the future will be able to choose whether they want to have a claim on the commercial bank having the deposits there or if they want to have a claim on the central bank they can have it now with the notes but potentially they can also have it in the future Governor, very quickly, do you think the CBDC in Sweden will be M1 M2 or M0? I'm sorry, too academic? That's a good question so that would be a digital version of cash so the answer is it would be M0 the nearest version and also do you think it should be retailing or wholesaling means shall we need banking sector or we don't need them anymore so the reason for why we started this project was that we see that individuals are stop using cash or the banks and shops stop accepting and offer cash services so we if there is a need it would be offered to individuals primarily I see then will it be anonymous or not? So that is one of the other questions where the staff is looking into my personal view is that it's perhaps not the core business of the public sector to facilitate illegal transactions so at the end of the day it would probably be necessary for be able to look into transactions in an e-crona for criminal investigation reasons but it's a political issue and we leave that to the legislators to look into it potentially so how will we see the CBDC in Sweden? I don't know it's a long way to go but we have to do the homework since cash is going out of fashion very quickly Jennifer your view on the CBDC I think in fact I don't think completely outside of central bank system a very efficient payment system will really exist because I don't think any country any Soviet country any central bank will allow there's another alternative currency completely outside of central bank's oversight however I do think that we haven't mentioned the term token economy we focus on if cryptocurrencies is going to replace money or not or if it's a store of value or not however I think if you look a little bit beyond of the manic you mean the technology? I think the technology now creates this very effective very efficient micro-incentive system that will potentially disrupt venture capital we are in fact disrupting ourselves and potentially will disrupt IPO market I have been investing FinTech for a number of years and over the years I have seen many companies that always building on the same system just incrementally make it a little bit more efficient a little bit more transparent but with blockchain the underlying technology let me ask you a very specific question do you think the blockchain technology can replace the RTJS system in the banking sector we are using today I think the scalability is not there yet but over time give it time how long? it's hard to say that the acceleration is happening very fast so I think the breakthrough could happen any time so a couple of things to comment on I mean the first is tokens and their use in delivering other functions than just transactions or store of value which is the primary function of the Bitcoin blockchain I do think that's interesting and so if you think of notaries or title insurance things that require some sort of a stamp and a lot of bureaucracy it's possible to it's quite conceivable to think of a blockchain with a token that's used to verify those transactions and to store them forever in an inviolable way but that's still I think it's a bit easy to say that the blockchain will generate lots of things and we're not so sure about Bitcoin the truth is you do need one with the other because you need this way of giving people incentives to do all the work to verify this distributed database I mean two people running two computers is not as trustworthy as thousands of people doing this so I think you can't sort of buy into it but not completely buy into it you do have to buy into the idea that these things will be valuable now what does that do to venture capital and our business of investing in the equity of startups and helping them grow their business I think that as it's been pointed out there's a lot of volatility and there's a gold rush and lots of people just think why wouldn't I buy Bitcoin that clearly cannot last and that will not last and so that's attracted lots of people into the market and lots of I think unethical offerings of tokens and those things will hopefully be regulated out of business or just shut down on the other hand I don't think that every business can fund itself by monetizing some unit of exchange in their future business by selling tokens and not by selling equity you know if you think of something like Kickstarter I think of Kickstarter as kind of a proto ICO in the sense that you know Kickstarter the site where you can show some product and sell it you make a nice video that describes a product hopefully something that you will actually make and people will give you orders actually give you the money buy it beforehand without selling equity so before we open the floor let me ask now and Jennifer very quickly one question about ICO why China government shut down all the Bitcoin exchanges and all the ICO because according to one survey in China 90% of the ICO scheme is the cheating scheme and cheating case so that's the reason why the China government moves very quickly to stop everything but how is the situation in other places in your view ICOs I don't think China has a monopoly on that I think there are a lot of people who are taking advantage of of this gold rush and the fact that and the people are not doing their homework and just buying things without without asking themselves what's going on but that doesn't necessarily mean that the whole thing will come crashing down Jennifer I think you know first of all you don't need ICO to tokenize tokenization doesn't really require ICO I think it's a marketing process secondly I think there's a ripple effect in terms of central banks action and the regulators action because in the past probably seven or eight months I have spoken to governments from Oman to Switzerland last week I just met Switzerland's federal council who's in charge of the economy and after the meeting with a group of us he actually announced that he wants to make Switzerland a crypto nation and you know in Asia, Cambodia, Bangladesh etc a lot of smaller economy now they started to think if we just make our regulation a little bit more crypto friendly perhaps we can attract a lot of capital and a lot of talent and either you like it or not I think we are really at the cusp of something quite extraordinary happening in terms of monetary reset in the history every time there was a big disruptive technology taking over what followed with that is always a monetary reset from real way to internet but now with the information technology we've already at the end of probably 25 years if you think about how seamless everything else using technology and then you think about our financial system there's a mismatch so who's there to say things are not going to be completely different and I think in the 90s when people talking early investors going to internet they always say intranet will probably take off but internet can't imagine people sometimes we need bubbles to nurture the new technology it strikes me that what bothers me about bitcoin is that the enthusiasm I see is like a speculative bubble it's about somebody made a lot of money I wish I could get in on that too and it looks selfish to me there are other financial innovations that are exciting that I don't hear all to me they're exciting for example the benefit corporation is an idea that's spreading it's a kind of corporation which is halfway between for profit and non-profit it's a for profit corporation that has in its charter a public purpose so here we're living in a world where we're getting rising inequality we're getting nationalist separation of and bitcoin seems to fit in too much with that I wish people were less enthusiastic about making money I know it's not you must have consensus that technology should do the good for the whole human being it's too philosophical so it's time for us to open the floor for questions collect all the questions we collect all the questions and we will ask panelists to answer them together please identify who you are and please be very brief so for example you issue a crypto crown and it will mean that people will be able to keep these crowns at their own wallets so the need for custodianship like what the banks are doing will diminish it means that a lot of cash will go out of the banking system which they will not be able to use so what macro effect do you think it will have on the whole banking system and how will it change it very good questions and please we collect all the questions thank you great discussion I'm a journalist but I'm asking an interested individual you said crypto nation I like that I'm going to scratch tomorrow with a failed state or some country X would you make it a crypto nation good question which panelist do you want them to respond to you okay great we collect all the questions please yeah thank you I'm from CIC China Investment Corporation and a question to professor since the professor you have a CICI speech a few months ago and it was focused more on behaviour I was very curious you haven't touched on it maybe take the chance from your behaviour perspective to comment on this because of limited time please be brave thank you hi I'm a journalist from Holland one issue that has not been discussed is bitcoins energy use which seems to be hanging over as a dark cloud rising up to levels of maybe entire countries I'm especially interested in the Bitcoin fans perspective on that Li Wei I want to build on professor you have no time to build you only have time to ask for yourself if Bitcoin enthusiasts view this as an asset it's okay nowadays inequality the need to do money laundry and people's distrust of the government everyone will just pile in say China crack this down these people will go to South Korea or Japan and then when there is if central bank do not act there is an eventual crack kind of fall and then all the people Korean have go on the street to protest so I'm just wondering this is not a steady state so the central bank have to go in before this become a systematic risk you mean the CBDC or the regulation regulation the CBDC can help do you have questions comment good very good thank you so just challenge the view of the okay and Aileen thank you with ita media group my question of form is governor is that do you think it is possible or necessary or feasible for us to do some global coordination regulating Bitcoin or the crypto asset I'm very sure another question is that do you think a nest financial crisis may be caused by crypto asset because a lot of investment bank like Goldman Sachs are now testing waters to provide brokerage service in terms of Bitcoin features thank you very good questions and I see there is a hence from the gentleman the lady please thank you my name is Jennifer this question is actually for Neil we talked a lot about Bitcoin but we didn't get a chance to talk about other cryptocurrencies and as you know a lot of startups are now raising money and it's disrupting your venture capital model so I'm curious to hear whether or not you're going to start investing into into the ICOs how do you feel about that and what is your strategy going forward yeah the lady here please yeah you hi I'm a crypto newbie but one of the things my understanding is is that the technology protocol behind Bitcoin isn't particularly scalable and so if the underlying protocol isn't scalable how do you expect it to sort of do something like become gold or you know replace the reserve currency yeah very good question and the final one yeah final two from the gentleman there hi I'm from Geneva and cousin I was just wondering the Bitcoin is based on what value how is it just the demand that makes the price of the Bitcoin what is the value how do you scale the value of the Bitcoin okay thank you the final one Jeremy Warner another journalist it's not part of the problem with Bitcoin as a currency that it can't expand beyond a certain point and therefore it can't really accelerate economic growth properly and a bit like when currencies were linked to the gold standard it would then become a I think we have solved that problem you arrive late I guess anyway anyway I think we have a 8 or 9 question so every one of you you can pick the questions you like and comment on that maybe now from you okay so I'll comment first on the crypto nation if you're a failed state you know I don't see why you could actually do so I don't think you'd print paper currency you might do a central bank controlled digital currency or you could do something that was distributed in terms of control and you might attract a lot of business and and citizens so I would definitely try that the other comment the other one I wanted to comment on was the question about whether this disrupts the venture capital model I don't think it does as dramatically as you might think I think that there are still and I think there will be for quite a while entrepreneurs who want to sell equity and work with with somebody who's aligned with them in the same security to build a company and to share the gain that doesn't mean you might not at some point issue tokens but it doesn't mean that they'll use them as their primary way of raising capital on the other hand there are some ICOs that we think could make sense and we are looking at those carefully and also technology the scalability issue so I mean the that kind of reminds me of what people used to say about the internet and about the early days of ethernet or TCP IP that it will never scale I think we'll get there I think that these things entrepreneurs are very resourceful engineers are very resourceful and it will scale or we will come up with versions of it that will scale better but you're right it's not particularly fast it's not particularly cheap and it consumes a lot of energy I'll try to use one sentence to answer every question crypto nation definitely because of trust leap we didn't use to trust a paper note but now we trust paper note now we are a lot of next generation are digital natives so why would we still go back to build paper money in terms of energy use I totally agree I think bitcoin is not efficient at all but again depends on what you benchmark against right if bitcoin is disrupting gold compared to gold mining and gold security and gold security and transportation bitcoin is not that bad in terms of money laundry let me answer this question with a question before bitcoin what did we use for money laundry so bitcoin is just a tool it's not the reason there's money laundry in terms of global coordination of regulation I'll leave to the governor to have final say but I think from my own experience I think each government each central bank has its own priority it will be very hard to achieve global coordination in terms of scalability versus being a very effective store value scalability is measured by number of transaction per minute so if you use bitcoin as payment the number of transaction per minute matters right if you look at visa master but if you use a store value you're not going to trading every all the time so because it's disrupting gold so it's not currency in terms of bitcoin the value I think a lot of people argue that there's no underlying value but if bitcoin can replace even 5% or 10% as a store value compared to the global gold reserve you can do the math that bitcoin right now it's still very undervalued so it's adjusted from a belief the value is from people's belief gold prices based on how we consistently Professor you have more someone asked for a behavioral finance perspective so I come back to the idea that bitcoin is an interesting idea but it's way over represented in our attention because it's like a speculative bubble that it involves contagious stories about people making a lot of money and that you don't like this but let me go it's not about money there are other innovation there are other things to think about I will arrange another event for you to debate for the whole day on that but before that Professor would you like to answer the question from will bitcoin nurture next financial crisis but that's the thing about central banks have been perfecting their art for how many years since 350 Swedish case and I congratulate you they now think that they have a target inflation rate and they're pretty much hitting the target bitcoin you said will be deflationary maybe massively deflationary I don't think you have a good feeling about what that will mean for the economy it seems like it will be very disruptive to the economy we've got a good thing going with you people we do our best over to me then and the question regulating globally or nationally I think it's mainly taking care of it is taking care of on a national basis through investment protector legislation, anti-money laundering protection etc globally it remains to be seen whether it's going to be regulated or not is it a source of new financial crisis this is I may have to regret this for the rest of my life but I think no I don't think this as we can see it now to be a source of the next financial crisis because the sizes and the level of leverage is probably and it's not within the banking system as we can see it so so that probability is pretty low the consequences from a macroeconomic perspective of keeping central bank editor currency in the wallet next to your notes and coins next to your debit card where you keep your commercial bank money it's a very difficult question there are different research going into different directions they open up a variety of trick issues let me just finalize by saying that safe and efficient versions of money that are being offered in ways that society needs in order to facilitate transactions in a safe and efficient way that is very beneficial for the economy I'll stop there I think we have run out of time but I would like to take the privilege to ask you very quickly to final questions the first one is that in one year's time how would you predict the average price level of the bitcoin and the second in ten years time do you think which currency will become the next great global currency central banking digital currency of the dollar CBDC of the euro CBDC of the R&B or bitcoin the first as a decision maker in interest rates I had to make a number of forecasts luckily bitcoin is not one of them that affects my world as a decision maker so I will not give you any forecast of what bitcoin will be on the question of in ten years time which currency will become the next big global currency I don't think it will be bitcoin in terms of sizes and in terms of how well is this sort of used in the economy and I think it remains truly a very open question whether any central bank have issued a digital version of their own currency addressed to individuals it's a very open question but a lot of us including the ricksbank are looking into it Professor I'm glad you set the example for not answering your question I've discovered that when I give flippant forecasts they get quoted okay then the global currency in ten years time okay maybe I can guess this it's not as dangerous I'll say the euro euro, CBD is a euro okay, Jennifer back to you I don't like the point about it's about money it's okay Jennifer we still have time I want to say this I actually don't care about where bitcoin's price is going to be the fact that bitcoin has been survived for so long it means it's a very powerful idea I really don't care where it's going to be I will hold not really primarily for the profit I will hold for the idea for the belief I think secondly I think for the belief and also for the idea that could inspire a lot of different possibilities and imaginations in our new monetary system in ten years time I still think that I don't think cryptocurrency completely outside of the central bank system will really flourish in the global is it bitcoin or anything else no I think it potentially could be Chinese central bank issued national cryptocurrency that mobilized the trade and built the world so none of them answered the question but I have to I'm happy to I'll take the heat for the forecast I would say that I think very briefly I don't know 25,000 a year from now please don't write it down but I would also agree that as long as it's alive and higher than it is today I think it's a success I don't care if it's but to your other question I think it will be a digital currency and your bet is as good as mine nobody said the dollar so why don't we say the digital dollar thank you so much final poll for you how many of you are against bitcoin now fewer how many of you pro bitcoin now also fewer very strange thank you so much for joining us thank you so much for our work