 All right, let's get started. A very warm welcome to you all from the World Economic Forum's Summer Davos in Tianjin in China. The topic today is paying frictionless. Very excited to be moderating this panel. Brilliant panelists with us today. Before I introduce the panel, a very quick housekeeping update for the audience. Please engage with us if you're engaging, if you're watching us live. Use hashtag AMNC23. Also to say, in the last 15 minutes, we'll open the floor for Q&A. So stop thinking about your questions now. All right, so let's get started. Let me introduce you to our panelists. To my left is Professor Sebastian Claro, Professor of Economics, Universidad de los Andes. In Chile, you're also an ex-Central banker. And you were the vice president of the Central Bank of Chile until 2017. To Professor Claro's left is Jeremy Allaire, chairman and CEO of Circle Internet Financial. Your headquartered in Boston started out as a peer-to-peer payment provider and now managed stablecoins. To Jeremy's left autumn to, yeah, there is Susan. Susan Ning is managing partner of Regulatory and Compliance, King and Wood Malacens. You'll be giving us a legal perspective on today's topic. So really looking forward to that. And to Susan's left is Royal Chen, vice president, Tencent Financial Technology. Tencent is, of course, a big Chinese tech company and I'm very keen to hear from you and so is everyone else about your experience of operating in a digital payment space. So let's get this party started. I know it's about four o'clock in the afternoon here. You've all had your lunch, but we're going to make it as interactive as possible so you all don't go off to sleep. And the memo I've received is to make it conversational, dynamic, so let's jump in and talk. So if Professor Claro says something and Susan, you don't agree, please do jump in, right? And I'll try my best to keep it as dynamic as possible. So paying frictionless. We're talking about cross-border payments here, cross-border transactions. They're growing really fast. The World Economic Forum estimates this to grow from 29 trillion in 2019 to around 39 trillion as of last year. Now this is all attributed to a number of factors. There's global trade that has improved a lot over the last few years. You've got borderless e-commerce. You've got digital-driven businesses. So a lot has happened, but when you look at today, my dear panelists, when you look at where we are today, a very open-ended question for you all is, when you look at the current landscape for digital payments, what do you think? Where are we? And I want to start with Jeremy because I'm looking straighter to you, so go to go to you. Sure, it's a pleasure to be here and happy to kick this off. When I look at payments today, in many ways, payments are still trapped in a pre-Internet era. Even though we use mobile payment applications, a lot of those are kind of their own walled gardens. You can pay someone who has WeChat or you can pay someone who has Venmo in the United States or if you're in a given country, there's a bank network. We don't actually have, at least quite yet, an Internet-scale model for moving value, for storing and moving value. And so really the opportunity that we saw 10 years ago when we founded Circle was this idea that we were going to see a new infrastructure layer on the Internet where value itself could be a native part of the Internet. Just like we have data and information and communications, we could actually have a native part. And in that world, which today is, I think, best expressed through things like stablecoins, which are a representation of fiat currency as digital currency, we'll move to a world where we don't think about, say, sending a cross-border email. We won't think about sending a cross-border payment. It will be instant, global, frictionless per the title of the session and the panel and interoperable in the same way we have that with the web of information and communications. And so I'm really very focused on how do we build these kind of open Internet infrastructures that connect the world economically in the same way that we've been connected with information. And so that's what I think of when I think of paying frictionless. That's great. That's very interesting. And, Roy, I want to ask you another very big business, pioneer in digital payment. Where do you think we are currently? Okay, thank you. Thank you very much. And in the past nine years, I should say that the mobile payment in China has welcomed a fast development cycle. And probably you have seen it in China, on the streets and in our daily life, even living in the towns and the village and the mobile payment is supported and you can pay anything you want in your daily life. So with a mobile phone in China, you can go without a wallet. And all the payment and QIC or the electronic ID is available in your mobile phone. And we see that in the past nine years, mobile payment in its social and commerce, in finance and its application of mobile payment is in fast development. And also we follow the pace of the Chinese people and we made this payment network globally and we support 69 countries in the regions and we support the Chinese travelers in buying, in making payment. And we try to really open up this ecosystem and to be comparable connected with the global partners. So that cross-border payment is more frictionless and more stable and the smooth. And of course, I want to say mobile payment, globally speaking, the standards is quite different. The habits, the culture is different in the mobile payment and it is up to the requirements of the regulators. Such a difference in the regulations, for example, in Europe, EU and Asia and African countries and we see some diversified local culture and the different habits of life, we need to make reflections while we show respect to the culture difference in mobile payment. On the other hand, we could see this network with an even development. They can still have a consistency service in their payment and that is a subject in front of all of us. So we want to promote the whole world to be connected. Thank you. That's great, that's a great very interesting point you said there about regulators and about habits being very different across the world. And so I think it's time to bring in the regulators then. And Susan, I look at you, where do you think we are? What's your opening remarks? Well, I actually would echo Roy's comment. I was traveling after the freedom we have after three years of pandemic situation, I flew to Japan and I was in New York for two weeks in the last two months. And I was able to use WeChat Pay or Oli Pay there, believe it or not. I was able to pay the taxi driver in Japan with my Oli Pay. I was able to pay in the outlet in New York, the Woodbury outlet with WeChat Pay. So this is just echoing what Roy was just described. But from a regulatory perspective, we would see that I'm a data protection lawyer. I would, the first idea will first concern come to my mind is how to protect the personal information that has been cross-border because of the cross-border payment. Of course, we enjoy the frictionless payment experience, but we are also concerned with our personal name, contact information, bank account, even address associated with such a bank account will be shared in which way to what extent and who will have access in that regard. This is a personal concern, but we also see that the different regulatory bodies across the globe have a different attitude or different harshness in applying their own jurisdiction or laws and regulations. Like a GDPR have a different regulation. Cloud Act has a different. In South America, you also have a different personal information protection regime. So these different jurisdiction may result in a conflicting compliance program that the enterprises will have to form where solving these conflicts could be very costly. So, and of course, costly doesn't mean necessarily only the compliance costs, but also if they are found not in compliance with local regulation, they will be fine. And that could be very heavily financial burden. That's great. Thank you. Professor Clara, you're probably looking at this from a very different lens, you know, through a policymaker as a central ex-central banker, now an economics professor. What's your take on this? So, let me talk about saying that when I think about digital payments and digitalization, I think in a revolutionary change in the way payments are done, lowering the per transaction costs. We know in economics, what does per transaction cost mean? When the cost of doing transactions is very high, people do very few and large transactions. That happens in international trade, in domestic trade. When per transaction costs are very low, people do many small transactions. Now, we tend to think that lowering per transaction costs save costs of doing transaction, which is obvious. But the main benefit of that is that lower inventories need to be held by the people doing transactions. Same thing, in my opinion, happened with money. What this lowering of per transaction costs really means is that people will need to help lower stock of liquid assets. And that is a game changer for the financial industry. So I take this perspective, because I think there are three main players, which are the central bankers, commercial banks, and non-bank institutions, called the fintech, big tech, third party platforms, whatever, that interact with each other. And commercial banks in these new settings do not have necessarily the incentives to innovate too much. But there's a pressure from outside for innovation. And this interoperability and relationship between non-bank platforms and banking, I think it's at the center of this change in the way the system is playing. Because for commercial banks, they might not only have the incentives to innovate and lower the amount of liquid assets that people have, but also because from the regulatory point of view, they put security before consumer attractiveness. And on the other hand, other players which are not as regulated as banks, put consumer attractiveness over security. And then I think the great dilemmas living aside the role of central banks and CBDCs that we could talk later on, is how to manage this trade-off between allowing for innovation outside the banking sector, pushing for open banking and the connection between these non-financial, these non-bank institutions and banks, but making sure that data security is well taken care of, consumer protection is well taken care of, and financial stability is not, is not threatened. That's great. One theme that I'm kind of seeing emerge here is how this digital payment system has to be streamlined. And it's very, very important. It's the backbone of the global economy, the backbone of global trade. But how do we do that? I think recently G20 also put sort of making, improving cross-border payments as a goal. Now my question is what kind of innovations are we seeing? What kind of innovations can be used to improve this or achieve this goal? And so I want to go to the businesses first. So Royal, if I can lean on you for this question first and then maybe go to Jeremy after. Thank you very much for your question. Talking about innovation, in my view, in the digital payment, and that is the QR code payment, that is our top innovation. And I believe worldwide we see some POS payment and FC payment, and the QR code payment is quite unique. We skip POS payment, POS machine, and we just use QR code. You know, China has a large territory and at different regions and the cost of a QR code is so low and it is available everywhere. You can use it in the cashier and also you can print it out on the paper and also you can put it in the entrance at the parking lot and by social media and we try to spread out the QR code. For example, you help others to make a purchase and the people make payment to you just scan your QR code. I see some young people just print the QR code on their t-shirt and flexibly they can use the QR code to make payment or receive payment. And I think that QR code and its application in China or in the worldwide and there could be a high innovation, very good innovation worldwide by using QR code as innovative method and a WeChat payment transferred from a social media kind of payment to quickly used by people on the streets. In a few years, we've expanded the QR code to more than 10 million merchants. So in this huge network of merchants we've found that there was micro businesses, those tendering buyers, street trolley selling tendering, they could use QR code to receive payments and that is of great benefits to them. They don't have to buy any expensive equipment. And the down payment and the first investment is extremely low and that could inspire more business activities in the society and we are also seeing the involvement of payment technologies such as the payment stereo by WeChat. For example, if you're selling fish in the wet market, you are using your hands all the time. You need to wrap up your fish to the customers so your hands are fully engaged in all kinds of activities. You're not able to receive payments or even use QR codes. Now we have that the stereo, payment stereo. You only use your voice and you could hear whether the payment is made or not because the stereo will announce that to you and add the exact amount of that payment. So it's very easy payment process as long as you serve your customers well, as long as you could deliver the merchants to your mercantises to your customers. It will be a frictionless process, no hassles at all for the payment process currently in China. Such a huge and convenient payment network. Today our topic is frictionless cross-border payment so we would like to open that network to other places. Early in 2019 we've conducted trial experiments in some merchants, those who sell railway tickets, those who help clients to book hotel rooms, we've opened those networks to international credit card organisations to support foreigners who travel in China to use WeChat. But there are not very many merchants because of the pandemic influence and that hinder international traffic and exchange. In the middle to late July, WeChat payment shall start to expand that network again. Supported by regulators in China, we shall open up further our payment network to visa and other credit card international organisations. Foreigners who travel in China to use their credit cards issued by their own country to tie that with your WeChat account. And then you could experience frictionless payment process. No difference at all compared with Chinese citizens. And there are more and more sports events recovering in China. And friends from all countries are coming to China. I want to go to the other panellists as well. This is very interesting what you just mentioned about opening up WeChat to the rest of the world as well. Thank you very much for that. And I think what you just said about consumers and how it's made life very easy for consumers, that's exactly what I think we want to be able to translate to businesses. And Jeremy would love to get your perspective on that because at the moment it's still very tough for businesses to be able to transfer money from one place to the other, especially small and medium-sized businesses. You're still waiting for up to 10 days, really, sometimes for payment to show up. That eats into your revenue. So we want to bring you in as well to get a sense of how innovation can actually help us achieve that goal. Sure. Maybe I'll start with just some of the building blocks. So our approach, I think, is very different, which is what we've built is what's called a stablecoin. And the stablecoin that we issue is a US dollar stablecoin called USDC. It's regulated similar to other payments companies in the United States, so it has many of the same regulations around it, but it functions really differently. When a business comes to Circle, they take traditional money from a bank account and they deposit that. And then we issue digital currency tokens that then instead of being tied to a specific wallet application, they work on the public internet. And so you can take those and you can send and receive them to any digital wallet. And similar to today, if I sign up for an email account with one company, I don't worry about whether someone else has the same email service. Blockchains are basically a public network that allows for interoperable exchange of value. And so this digital currency model, just in the past several years, has grown enormously. We've issued and redeemed over $600 billion US dollar coins, USDC, and on blockchains, we've supported over $11 trillion in transactions. What's amazing is that because this is borderless and frictionless, any business anywhere in the world can just download a piece of software or a digital wallet that's compatible with blockchain networks and transact directly peer to peer without an intermediary. And so if I'm a business, I can actually directly transact to a business, say, in Malaysia or in Colombia or in Turkey or wherever you are. And the transfers happen at the speed of the internet. Right now, USDC can transfer with what's called settlement finality with final settlement as fast as 500 milliseconds with the transaction cost of about a penny. Sometimes even less, the average transaction can be around $0.02 or $0.03. And it doesn't matter the size. So if you have a small payment of $10, you can make that same payment with the speed of the internet, with that cost anywhere in the world. But it also can be used for very large transactions. So we have very large digital kind of electronic markets companies that sometimes will move $300 million in a single transaction or more. And so it's a very scalable model. It's an interoperable model that's built on the public internet. And I think for people, SMEs, especially individuals, the freedom to transact on the internet, it feels very natural. If I download WeChat or WhatsApp, I don't care what country you're in. I just communicate. And so once people start using digital currency like this, it's a kind of freedom that is hard to put back. And so this is proliferating because this is all built on open source software. Anyone can build a piece of software compatible with blockchains. There's thousands and thousands of digital wallets that have cropped up and are growing. Big mainstream companies like Grab or PayPal are connecting to these blockchain networks. And so we're getting to a place, and I think we'll see this in the next couple of years, where most of the major digital wallets in the world will connect to blockchain networks. And then you'll have real interoperability. And that will work for businesses. It'll work for individuals. And there are many other promises to this. I think in the business context, one of the really powerful things about these networks is not only can you make transactions, you can actually write contracts. So you can write a business contract. That business contract could be related to payment terms. It could be related to a loan against an invoice. It could be a contract tied to performing a labor function. Whatever it is, those contracts can be written in code and then can be deployed onto these networks and enforced by software and in an open, global way. And so the promise of this for commerce, in our views, is exponential compared to what we have today in today's financial system, which is very kind of in these stovepipes separated, et cetera. So we're looking at a world where business payments, peer-to-peer payments, business remittances, international remittances, where the price will go to zero and the velocity of data on the internet and the scale will be internet scale. And I don't think we've even fathomed yet what we're going to be able to do with that. But that's what we're seeing happen today. And again, there's only hundreds of millions of people dealing with this today. But I think the technology of blockchains is just now reaching a point where it can support billions of people in the coming years. And then we start to have real internet scale financial transactions in a way that I think will surprise a lot of us. That's great. So we've got from a consumer perspective, from a business perspective, things are moving very fast. There's lots of innovation happening, but I can see some alarm bells around me. So I want to bring Susan, you in, because for lawyers, this means that there is more checks and balances in place. So things like anti-money laundering, things like KYCs, things like cybersecurity risks. When you hear this innovation, what do you think? What are you thinking about right now? Yeah, since everyone is talking about innovation and creative payment methodologies, as Professor Claro has rightly pointed out about the issue of banking institutions versus the so-called third party platform or non-banking institutions, the interactive and the interoperability are important from a regulatory perspective. Who is responsible for what? Like regarding the issue like an opening account, verification of the account user and also who is giving the payment order if there is something around just in case of shutdown, let's say, especially when we're talking internet scale. Then who is responsible for some missing transactions or mistaken transactions? So this is like as a legal professional, I would pay much attention in this regard. Of course, anti-money laundering, you see the traditional banking institutions indeed, they are imposed on happy duties regarding security, anti-money laundering, et cetera, while the so-called new payment institution is a third party like a VChat Alipay. They may please the customers as a priority versus the so-called security issue. So how to balance? Of course, enchanting the customers, the consumers, it's like a lifeline for a business, but security is also especially for financial institutions. This is actually an issue that legislative bodies should really strive for, the efforts for. And I think like from legal perspective, I will see that in China we always say let the bullet fly for the moment, especially addressing the situation where the practice, the industry practice, go much faster than the legislative bodies movement. So I think for this industry, probably this is also true. Let the practice develop for a moment and see how the regulatory bodies react and also how international organizations, treaties, like agreements could also reach at like a higher level, which we're still waiting. As you say, like a G20, they have like a painted, like four objectives they are efforting for, like the transparency, the coverage, and the speedy, like a swift transfer of money and security. So let's see how we can reach to that level. Yeah, Professor Clara, would you like to wait? Two dimensions maybe of the regulatory discussion, one is the one Susan was pointing out, which is how to establish an adequate equilibrium between innovation and financial stability, so to speak. For example, in some places, Chile is one, when there is a security breach and there is a payment that was not asked for, mandated by the customer, through one of these platforms, it is the bank that needs to respond to the customer and then the bank needs to go back to the third-party platform to ask for the money back. But the third-party platform might not even have the solvency record to respond for that. So I think this is one of the most difficult issues, same thing with consumer data, et cetera. A different thing is regarding the cryptocurrencies, stable currencies world. And there, I tend to think for the good or for the bad that central banks are very aware and nervous. And I think probably central banking currencies are going to expand probably significantly in the next few years to try to avoid these currencies to win the game, so to speak. There are good reasons in terms of financial stability for that. But especially, and these are very different perspectives, maybe, from a macroeconomic perspective. When you have a business cycle, demand for liquidity changes because a risk perception has changed, then there is a need for the money supply to change very aggressively. Central banks, maybe they do it right in some opportunities. Maybe they do it badly. But they have the control of this money supply. Some, maybe not all, and maybe I'm losing part of the story, some of these alternative monies have kind of an exogenous supply of money to give them credibility. But at the same time, they weaken significantly the way the business cycle can be managed. And so hence, my view is that central banks are probably going to push harder in favor of the digitalization of their own currencies, bringing into the regulatory framework non-banking financial institutions probably with much stronger regulation to offer businesses and consumers access to, so to speak, central bank accounts, easing the speed of transactions and avoiding a system which goes beyond their influence. That's very interesting you say that, because recently, I think Federal Reserve Chair, Jerome Powell said that he acknowledged stable coins as a digital currency, and he said that the Fed wants complete oversight, which they want to roll. And I'm very keen to hear from you all whether you think this would open doors for more central banks to follow. Jeremy, I see you are agreeing with me. Would you like to jump in? Sure, we're very close to this topic. Right now, the United States Congress is discussing a new set of regulations over the private issuance of digital dollars. And so USDC is an example of that. And there's also been discussion about central bank digital currency in the United States, but it's been rejected. In fact, in the same testimony, Chairman Powell said we are not moving forward with central bank digital currency. Chairman Powell also said we need to provide clear rules around private sector innovation through digital dollars and stable coins. Secretary Yellen, who I know will be here in China soon, similarly is advocating. And the US Treasury Department at the FSB at a global level has really said the priority now is regulating this sector. But I think the result to build on what was shared, the result is actually building a model where the base layer of money is very safe. So you have digital dollars where the assets that back them are held with the central bank or in things like government bonds, short government bonds. And then you have something that everyone on the internet, every user, every business will know. This is a cash equivalent instrument. And then you have the traditional central bank oversight. But it's different than commercial bank money. When you give money to a commercial bank, they take the money and then they leverage it and they multiply it by 12 times on average and they take risk with it. And that introduces systemic risk and financial stability risk. It has us other benefits as well, but it introduces this risk. And then from time to time, every 10 years, every 20 years, you have bank failures, you have bank runs and then you have huge bailouts and so on. And so stable coins provide a way to have a base layer of money that is very close to the central bank. And so you're not changing monetary policy. But with the benefit of instead of the government being responsible for developing software, deploying network, running technology, you allow bank and non-bank companies to actually drive the technological innovation and to be constantly upgrading that technology. Because as we see, whether it's with AI or blockchains or other things, the pace of technological improvement is constant. It's by the week, it's by the month. You can't expect governments to keep that pace. So you have to have this public-private partnership and preserve the role of the central bank, but also unleash the entrepreneurship, the theme of the conference, and innovation in these areas. I think Tencent is actually a tremendous example of doing exactly that. And it's interesting in China, there is a central bank digital currency. It's not very popular. WeChat Pay and Alipay are popular. And so even in a market where the government has prioritized a central bank digital currency, the private sector innovation, voice-activated payments, whatever they're coming up with next, this is really catalyzing the innovation cycle. That's very interesting. Professor Clara, what do you think are the challenges with something like that if more central banks start to follow with the Fed taking the lead? I fully agree. And maybe I was not clear enough on saying that this discussion on central bank digital currencies, that not necessarily substitute away the role that the public sector, that the private sector might have on the development of that. Indeed, one of the risks of development of these central bank digital currencies is to take away all the funds from the financial sector and from the commercial banks. And that would be very bad for the country and for the way the central bank would like to work. So it is a design that mixes the role of central banks and the development of private sector, which is probably going to move forward. There is a recent report by the Bank of England a couple of months ago, maybe February 2023, that points in that direction, I think. A different story, though, is the original cryptocurrencies, which, to some extent, do not fit into this model. But I tend to agree that it is a mix of private participation and central bank participation that would probably move forward. Otherwise, the risks for the central bank are very high on dealing with thousands of payments, millions of consumers and payments. That is not their business. They don't know how to do it. And would substitute the role of commercial banks that is neither their intention, I guess. That's very interesting. I want to move on quickly, because I know we're running out of time soon, but talk about digital divide a bit more. And you're all stakeholders here. And one of the things that innovation brings is, of course, it brings generational divide, but it also exacerbates income inequality. And I wrote a story a couple of weeks ago about how AI is just getting out of control. And it's difficult to keep track of what's going on. And that's leading to this divide that's coming between generations, between socioeconomic groups as well. And so as stakeholders, how do you think you can all come together to fight this inequality, growing inequality, that more and more of this digital revolution will bring in? Royal, do you want to weigh in? Thank you. Thank you very much. It is true. We have been aware in technology, in application, the regions are not on the same pace, and they have differences. And Tyson always put users, consumers, in centrality. And we want to do the good things. And in 2016, we have ran it application in Hong Kong. In our observation, we see some Philippine employee working in Hong Kong. Every week, they only have one day off for rest. They need to queue up for every hour to wire the payment to their hometown. After reading the newspaper, we believe such our AI is so low. We come up with, we remit payment functions. So these, they go to 7-Eleven, the convenience shop. They can have, they have e-money. You can transfer back to their hometown. And we are used to it in China. We think it's nothing, nothing interesting. But they can get money at the hometown to from the shop at their hometown. And they can go to the shop. And they can go to the pawn shop. And they can get it. And this kind of culture difference, we are able to minimize the divide. And many Chinese people working overseas, they learn overseas. And many overseas Chinese want to wire payment back to China. And we support, support over 20, something such a remedy and a wise international payment company. And as they transfer foreign currency and after transfer, and as they send the message, we call a share link sent to WeChat. WeChat, you click it. You don't need to fill in your account number. No more QIC information. It is being there in WeChat. And their family member can receive the payment on WeChat. And our vision is that cross-border payment could be as easy as a text message. Why we are able to do it? Because we can integrate several networks together. At the same time, we show respect to the habits of the users. You know, they chat on WeChat. And next, they still send the payment, click on it, and they can use it on it. And that is bundled together. And that is quite good overseas payment network with the domestic payment network in China in this year. And we can have a global network, may not be a network of networks. We call it one plus one plus one. And the three one models, one is a local network. The other one is a local lifestyle overseas in between Visa or the union pay and the payment company in between. And these several networks could be organically interplay with each other. So you don't need to care who help you on the network. But anyway, the console backward is very complicated. But user experience is still very high like they used to. We have good experience. We have equity. And in our view in the future, under this global network, and there should be a open, inclusive, and equal and every company could share and could create and use it together, low cost global network is possible. Thank you. Thank you. Susan, do you want to weigh in? I want to also open it up to the floor, but would you like to weigh in? I think what Roy just described is really amazing. We have so much used to for daily life using AliPay or WeChat Pay on daily consumption. But I also noticed from your description of the story regarding Philippine Nannies in Hong Kong remitting back to home and recollected from the stores or whatever. This is a revolutionary to daily life. People's daily life, this is a revolutionary. But what I would like to comment is that this is so convenient for so-called foreign currency exchanges, which has been very much a hurdle, used to be at least, you know, like for transmission or crossing the border, especially as a Chinese, we have endured that for many years. AliPay, WeChat Pay, they have solved this. And on the basis that we even don't have to notice that, no matter from China to outside, outside to China. This is very amazing. But also, I think like just now the new two gentlemen also mentioned that the digital currency. For digital currency, I think it's of a central bank thing. At least from a China perspective, I just want to contribute from China perspective because a digital currency would consider, at least, you know, announced by Chinese government. It's a currency to R&B. It's a legal currency. It's like a one dollar to one dollar to a currency, Chinese R&B legal currency. So it suggests, you know, R&B in digital form. If you don't have Southern R&B, you don't have one, you can't transmit it to your e-wallet into the so-called the e-currency. But, you know, of course, for e-currency, the settlement needs to be settled not only by the banking system, but also the third party so-called platform as well. So the e-settlement is also, shall also be prevailing. So that's why, in China, we don't, I shouldn't say we don't care, but, you know, like, because we have the methodology of payment by banking, by non-banking, and the currency is like a e-currency where R&B in paper form, it is the same. So that may be why the e-currency in China is not that popular because it's just one to one to R&B who cares to that extent. That's a great point. I know Jeremy wanted to say something and then we'll open the floor. I want to discuss the question around financial inclusion and sort of the all economic rungs on the ladder. And that's a really core part of the thesis and what we're working on today. Some of the very fastest growing uses for USDC are in emerging markets. Very specifically, people who work in one place who want to send funds very, very efficiently to people in other places. The demand is high, not just to get it and receive it and get it in local currency. There's actually demand for dollars. And so digital dollars are a very in-demand thing. If you're in Colombia or you're in Turkey or you're in the Philippines, I think you're interested in receiving funds but also storing value in a less volatile currency. So that's important economically as well when you see currencies that are struggling, people's value being destroyed. That's important. But we now have literally through various digital wallets the ability to deliver funds, very small funds directly to cash out locations in almost every country in the world, which is very powerful. The other is we're even solving problems when people don't have bank accounts, don't even have access to an e-money system. And so for example, we've partnered with the United Nations, the High Commission for Refugees to solve a really hard problem, which is war victims who are refugees who don't have access to their financial system anymore and who need to receive aid. And so we've worked with the UN to distribute aid in the form of USDC directly to digital wallets that people can just get with their smartphone. And then they can take it to whatever country they're in and conveniently take out cash as well. And so really solving for the people who have the hardest problems is core to what we're working on. That's great. I'm going to open it up to the two questions and I know the gentleman there has a question. Yeah, thank you. I think amazing panel and thank you for your fantastic insights. I have three questions. Oh, could you summarize them into one please? Absolutely, very good. The KYC side, especially for the digital wallets in most countries. Everything is still reliant on a card. You're relying on the commercial bank, which is issuing a debit card, which is doing your KYC and subsequently that's allowing it. So any thoughts how that's going to emerge? Question to Jeremy on web 3.0, the market infrastructure, especially for retail payments. How do you see that in the coming three to five years? And question to Clara on consumer protection and transparency. The kind of data, whether it is governments or whether it is these payment wallets are gathering in terms of every precision payment that's being done by an individual. With the generated where they can curate a clone, a digital avatar of mine, knowing exactly where do I go, what do I spend on and so on and so forth. And consumers are largely not aware of that. So what are the thoughts from a regulation perspective? So let's go KYC web 3.0 and data. Roy, let's start with you. I think KYC is a global conundrum. Now, there are so many foreigners coming to China, they want to make payment in China and they're faced with that difficulty. There is this ID verification in China for Chinese residents. Residents, however, not for foreigners to know whether it's fake or not. So we use manpower to verify whether there is a PIC using different information points. And that also has some conflict to data privacy and information protection of different countries and regions because some data could not be referenced by us. And that conflict will be here with us for a certain period of time. We could streamline the process, however, the process could not be accepted by all regions and countries. And so there might be a tolerated method coming up discussed by different regulators. Essentially, when people talk about web 3, it's really referring to the use of these blockchain networks for different kinds of data or applications and then connecting people's identity or wallets or other things to that. The infrastructure is maturing very fast and I think the way we think about it is in two areas. The first is just making the infrastructure kind of invisible to the users. People don't want to know about what blockchain am I using. They don't want to know about crypto wallets. They just want to have an application and interact and use it. And so a lot of the work right now is really taking the blockchain and making it disappear so that you're using a wallet. You're using a game. You're using a consumer internet application. And behind the scenes, just like we don't think about using TCP IP, the protocols of the internet. We don't think about using the HTTP, the web protocol. This needs to go into the background. And so there's a lot of focus on that user experience, making this simple, accessible, scalable. We're working on that web 3 infrastructure products. And that transition, I think, is happening. And based on what we see at least the usability for a billion or 2 billion users of web 3 technology is something that will emerge over the next approximately two years. Great. Professor Clara. Thank you very briefly. Of course, the consumer protection issue is critical. And maybe we need to distinguish two things, one. One is what are the standards that should be set? But secondly, who supervises that? For this whole world of non-banking financial institutions, FinTech, their fight is for being very lightly regulated because they are the innovators. And I tend to understand that perspective. But that cannot be at the expense of making sure that data is very much protected. And here comes a discussion on the, or it is related to the issue of integration and inequality. Because many of the people that come suffer more from bridges in their protection of consumer data are the poor people. Their data can be eventually not well used, et cetera. So the supervisors, in my experience, tend to, at this stage, avoid too much interference in these companies. And so it is not only that the standards are not necessarily clear in many countries, but there is still no agency that is very much aware of its responsibility towards taking care of this consumer data. Great. Let's get another question. I think there's somebody behind me. Yes. So a question to Jeremy and Royal relating to capital controls. Royal mentioned this for foreigners to pay in China, which is very helpful. I recently also used WeChat to pay in Hong Kong. I'm just wondering, for Chinese, we have this 50,000 limit of what we can pay with the capital control of China. Can we pay above that amount in Hong Kong for the mainlanders? And for Jeremy, you all mentioned this after this zero cost, almost immediate payment across borders. Can you do that for countries like China which have capital control? Thanks. Royal, would you like to go first and then maybe Jeremy after? OK. I must say something on behalf of the Foreign Exchange Bureau of China, 50,000 US dollar has confused a lot, actually. On WeChat, you could pay tuition fee. Tuition fee per year overseas is around 200,000 USD and that's not accounted to the 50,000 USD limit. Even when we transfer funds from Hong Kong to mainland, that's not accounted into 50,000 USD. The limit of 50,000 USD, meaning the fund without any intention, you have nothing as evidence to prove it's something that you need to pay or receive. So that's something I must clarify for the Foreign Exchange Bureau. So it's not a big hurdle. If you have evidence, you're actually buying something or paying something with legitimate purpose, it's not restricted. Thank you. Sure. I think a couple of things. First is that digital currencies on blockchains sort of exist everywhere. The internet exists and so, of course, everyone is aware that people can use these digital wallets in China. But in China, there's a very strict set of regulations that don't allow payment companies, banks, or any other financial institution to interact with the crypto companies or with those networks. That's currently the situation. And so even if someone had a stablecoin or a Bitcoin or something in China, they would have to use a non-legal means to have it interact with the financial system. And so it's not a convenient way to do that. I think, of course, Hong Kong is becoming more open to the use of this technology and beginning to regulate it. And I think as things like digital identity and verified identities can work with these digital wallets, maybe that will open the door to using this technology on the mainland, but I think we're still some time away from that. That's great. I think you had a question. Yes, a short one. Related to the gentleman over there, the question is more fundamental, actually. If we talk about cross-border friction as payment, I think my question is at the end of the day, we're still all going back to the banking system. Am I right? We're still into the SWIFT, the Euroclear, right? When we talk about dollar to dollar, yes, we can go frictionless, but when we go to cross-border, what is the end game? How do you see this to be happening later on? I'll try and take part of that and yield as well. So what's really interesting is that with USDC, people who receive it around the world, many of the digital wallets actually have partnerships with the card networks. So they actually have partnerships with companies like Visa or MasterCard. So instead of taking the digital currency and moving it out into the banking system, the card networks will let you actually use that stored value, the digital currency, to make a payment to a merchant. And then in turn, Visa and MasterCard, both they have partnerships with Circle, they'll receive the settlement using USDC as well. So someone might have USDC in a wallet, in a country, make a payment, and then that issuer basically sends the payment back to a MasterCard or a Visa using USDC as a settlement rail. And so I think the point is that as more and more value is stored and held in these digital currency forms, it will stay in the digital currency forms and does not need to be redeemed into local bank money. Well, we have two minutes, so I wanna kind of tie into what the gentleman asked and my final concluding question. So concluding thoughts from you all, you've got 30 seconds each. Let's get the central bankers, the commercial banks, the fintechs, the regulators, lawyers, everyone in a room. I just want to be a fly on the wall in that room. What next? What are the next steps from here? So 30 seconds each. Let's start with you, Professor Clarke. Unfortunately, because in the last 20 years we have lived through a very bumpy period of financial stability, I think all the discussion nowadays is very much oriented toward protecting stability in the financial sector. Naturally, that comes as a cost and that cost to some extent is innovation. But I expect there's a hope that at some point we will be willing to manage well that trade off and taking care of financial stability make use of these innovations because they cannot be avoided, actually. Okay, Jeremy. Yeah, I think very simply, I think if you have all those stakeholders together, I think the important thing is everyone wants responsible innovation. They want to allow innovation to flourish and they want the innovators to also take account of the risks. And so I think finding that balance, everyone trying to find that balance of maybe you can't think through every risk and manage every risk, but taking a risk-based approach where you apply the amount of regulation based on the scale of the technology adoption. Susan. I actually echo 100% of what Jeremy says. So I could agree. Yeah, royal. Payment will no longer be just payment. Digital currency or your solar or bank card or the balance of your digital wallet, they all represent credit. And there will be some conflict due to varied of cultures. And how could the regions be inclusive and open up? And that is the true problem behind the payment. Thank you. Thank you very much to our panelists. Please give a huge round of applause to our brilliant panelists today. Thank you. And thank you to the audience. Thank you.