 one of the things we have we have securities and we look at the idea of leveraging this technology to say can we benefit from DLT blockchain that kind of technology as a method to tokenize in a sense real assets like in the case of securities and so on and securities trading can we do that so at DTCC I'm not going to cover everything they do here but they've already got projects in place that have already been publicly announced about ION which is trying to in a sense say we'll settle securities on a blockchain automatically and we'll tokenize the securities and settlement through a blockchain as opposed to the current way it's done today we have other projects at DTCC also based on DLT technology as well so I won't go into those but just to say that in the concept of digital assets if we're an organization responsible for settlement that means one of the things who are responsible for not only connecting to all of the marketplaces that trade those assets but we're also responsible for payments on those assets when they're bought and sold and you wind up with what I call the custody problem so wherever your whatever stock you own directly or indirectly somebody is probably a custodian for that stock you know some company and so if you're in the digital asset space one of the as a provider one of the things you have to do is solve the custody problem how do I in a sense custody all of your investments in Bitcoin or whatever it is so anyway that said if you look at the kinds of financial assets involved you could be talking about Bitcoin ether or some other crypto you can be talking about things like stablecoins right that are not as volatile they're pegged to a fiat currency of some type like it could be tether USD coin or some of the other ones in our case we're taking real securities like IBM stock and saying let's make that we'll tokenize that and so that becomes an asset that we're going to track that way and then central bank digital currencies which there are few of them in the world that have been announced most of them haven't been successful today but they're out there I can't remember it was Nick around one of the central American countries has already done that they said that they made legal tender out of a digital currency down there which unfortunately hasn't worked out well today but it doesn't mean that it won't in the future so central bank digital currencies lots of countries are looking at that lots of companies the countries have already gotten experiments and most of them are farther ahead than the US I'll say the bigger economies that are focused on it and US as often as the case in financial innovation as a government we tend to lag behind so individual companies in the US are innovative but at the government level we're usually not a leader in pioneering new financial products or services physical asset proxies that's another thing so in the case of I worked with Rhode Island there's a session the next session that I'm doing with Liz Tanner she's the secretary of commerce for the state of Rhode Island she actually pioneered a digital identity system for the state as an MVP it's not in production yet but we had a very successful MVP but she as the secretary of commerce there's a whole bunch of use cases in the state that we don't cover for things like land titles cars vehicle registrations all that kind of stuff they're easy candidates to use the same technology in the same services and by the way the stuff in the state of Rhode Island was all built using the hyper ledger platform so Indy Aries Ursa and then I was so brilliant as the project manager that I said hey if we stole all that why don't we steal more so we went and stole everything from British Columbia that they produced which is brilliant work so we took the whole virtual organizations network and started as our starting point instead of down here we grabbed all that too and so it made the whole licensing problem super simple so it took an emphasis team four months from start to finish to get the whole thing up and running in the state which is pretty amazing but again that was the head start not only hyper ledger but British Columbia trust over IP that whole organization open sourcing everything made a world of difference so it's a commercial for how brilliant I am that I knew that I should be going after open source so that's my that's my resume is I'm smart because I know how to shop rather than build something from scratch but service asset asset proxy so events that kind of stuff makes sense writes assets as well so in the arts world we have you know rights to read a book music that kind of thing the Kindle stuff and all of that so whoops there goes my screen tokens and wallets so we talk about digital assets we tokenize them usually we issue token and we have a whole token taxonomy so there's the I forget the association the whatever it is internet work association that owns the token taxonomy there's a whole thing for different token types not just fungible non-functional fungible but they have different token types to find we also have different types of digital wallets out there that you can store in files on your phone or enterprise wallets that go on to an enterprise but those enterprise wallets can store different types of token types digital credentials certificates all that kind of stuff they're designed for that and you have different types of wallets with different capabilities and also different strengths and weaknesses out there so I've had friends that have had like a metamask wallet and say all my NFTs got stolen the other day yes that does happen so any financial system whether it be digital or not traditional always has a risk of theft and loss and that kind of stuff and we the difference is the better ones actually have insurance a pretty cool idea how would it be isn't it nice that some of the things are insured so as an example DTCC when we settle trades once we receive a trade if we have received the trade and not settled it we actually ensure that for loss in a sense so if for some reason it couldn't be settled we're covering that trade which is a it should make all of you breathe these year about your 401ks a little bit a little bit anyway we can't stop the market from going up and down we don't help with that at all but it's important to think about risk and how you mitigate risk in this world so fungible tokens many sessions have already talked about that they're all the same type so one Bitcoin isn't worth more than another Bitcoin for example a non fungible token you think of things like works of art that are unique or you know different domain names on the internet I have a couple of domain names I can sell those they have different market values and so on I could issue tokens on those if I wanted Anthony Day from IBM gave us a quick chart here that I included in the handout on Ethereum token standard types these are just the common ones that are out there there's some additional ones that they're inventing but the ERC 20 was for fungible tokens like Bitcoin Ethereum 721 hers non fungible tokens 1155 says here's a token standard that's a little more performant than those two and it combines the capabilities of both of those to be more creative 4626 actually dealt with vaults because we now in our case as a custodian we're gonna say we're gonna store stuff in vaults and so there should be a standard around that and there's some newer token standards as well on trying to improve over 1155 for certain what I call derivative financial instruments like options you know things like warrants that have callable rights and all of that so this token type the token types token standards are gonna continue to evolve there's no question of that token economy I'll grab some better ideas from Andy Martin at IBM who has been tracking the space for probably four or five years in detail if you follow him on LinkedIn but we tokenized digital assets on the left there you can see features of a token economy as you have digital assets represented by a token they can be represented by anything these could be physical assets so in the manufacturing space or supply chain we represent real products and things with tokens now to make them easy to track and trade on a digital model digital wallets we talked about those blockchain or DLT is a distributed ledger of permanent transactions on a network so we already will know that that's where we're here smart contracts are just a program that executes on a blockchain or DLT that usually enforces contract terms between different parties so when I trade an asset like a Bitcoin from you to me there's rules around that governance and so on if I buy something sell something create something whatever all of those smart contracts usually have some sort of a quote governance set of terms or regulations that govern how that smart contract is supposed to work and then market places so I built a couple of market places for energy trading one for vehicle identity and a few others based on hyper ledger fabric there's other blockchain's quarter there's you know Ethereum using the basic clients here there's lots of options within the hyper ledger community and even more blockchains out outside of hyper ledger so we have lots of different market places built on lots of platforms and some of the other sessions here on cactus and some of the other things we'll talk about the idea that these blockchains don't interoperate well for the most part and so there's different models on how to do that I'll get into one of the examples we had at DTCC where we were working on this model for project lithium on CBDC but you'll see the idea that there's two different networks operating and somehow you've got a in a sense have transactions across two networks anyway in the token economy as Andy Martin summarizes that you've got the digital assets you've got smart contracts blockchain and actually what Andy points out since his background is an accountant he says that really blockchain the point from his perspective blockchain is primarily a governance system from my perspective as an engineer and I'm a data engineer by trade you know for many years before I came into blockchain is what's different is I look at blockchain as data engineering across a network except it were also adding trust engineering on top of that and that's a big difference so as a data engineer all I ever worried about is do I have good data and did I send him good data if I was happy that I sent good data my responsibility ended there I didn't give a damn what happened to him it was his problem as far as I was concerned but in the real world we always find that we had data problems all over the place with the way we shared data and everything else and so DLT offers I'll quote a better trust model not only in better integration model in some cases for use cases but a better trust model as well so anyway that's the view of the token economy if we take a look really quickly so how does this work in the industry we have banking we have exchanges and we have custodians if you will so banking digital banking there's actual real digital banks out there Kime new bank bit bank and so on my nephew actually is the chief Bitcoin officer for bit banks so he has the responsibility of making sure that I think it's 3% of the world's Bitcoin is properly managed in his bank and so he's the guy that writes the he's a Bitcoin Committer and Ethereum Committer so he wrote the some of the Ethereum wallet code but the people that run those banks tend to be very technical in what I call the DeFi space and coming up with what I call new innovations on wallets and so on existing banks though now over the last couple years really are seriously interested in saying hey you know in the case of DTCC we've always traded securities but we now want to be in digital assets to our customers do anyway and if your city bank or JP Morgan or one of the larger US banks you're going to say hey we don't want to have our customers go somewhere else to buy and sell digital assets we wanted to do it through us so one way or another city bank and others are now saying hey we reach out and be able to be marketplaces for digital assets not just traditional ones as well so exchanges of course are online markets like Coinbase and others where you can actually go buy and sell either Bitcoin or any other kind of cryptocurrency and then finally you have custody services that are sometimes independent of both the banks and the exchanges and custody services that exist out there like fire blocks copper ledger anchors they're all different some of them actually are registered custodians in different legal jurisdictions and other ones really give you a framework in a sense but don't take legal responsibility for custody of those assets so there are difference in the custodians in terms of the services they provide but it's it's an interesting thing to go through and look at them so the question there's a lot of questions if you're going to be dealing in this space from a financial services perspective I've got a long list of questions I won't go through those individually but you basically have to ask what what you're investing in do you know what what your providers can be trusted with so at DTC right now we're looking at some of the outside service providers in terms of their capabilities and we're asking a lot of these questions about what they can or can't do whether or not they're unregulated or regulated there's benefits to both so sometimes it's nice when somebody takes legal responsibility but the truth of it is if you're dealing with a customer and I have his accounts or his securities and there's a contractual legal relationship between him and my company the fact that I'm using a service provider and they're insured isn't really going to help me at the end of the day when I have a legal obligation to him in most cases in the US the fact that the custody provider may be regulated and or insured to some level isn't going to protect him and other customers from making claims directly against me so a lot of times I'll quote the advertising is better than the reality if you will of what a digital custody provider can do for you so we talked about that we'll talk about taxation so because we're in the world of finance every government only exists for first purposes collecting your money they have other motives in mind but the first thing is we need your money so that we can do anything else that we want to accomplish so understand the taxation is I'll quote a primary driver of every strategy by every government and governments actually compete with each other right so you have foreign countries competing with the US so if you are as an example if you're somebody in the US and you've done well and you want to retire and you have money there's lots of countries that would love to see you move there and bring your assets with you and spend your money over there as opposed to staying in the US so they provide strong economic incentives a lot of times around taxation and other things to help attract business and the same thing in the United States you see that one state competes against another for sure trying to get in a sense business and in a sense residents to move there so it's kind of like if you look at in the US we compare California and Texas over the last few years there's a big migration out of California and a big migration into Texas on the part of businesses and so on and residents as well so anyway people organizations are subject to taxes by jurisdiction we have governments tax laws in effect are obviously most of you know how complex they can be and also how in a sense illogical they can be but they're they're legal so it doesn't matter how illogical it is if it's been passed and it's hasn't been successfully defended itself against any challenges in court you'd say it doesn't matter how complex they are they're legal and they're required to comply with but taxes obviously are based on income property sales specific taxes gas alcohol tobacco anything the government wants to get you for they can get you for walking as a tax if they chose to they just have to figure out a way to measure it effectively so governments do differ on how to tax there's no consistency and so I guess your opportunity as an individual or a business is to say where do I want to locate and what jurisdictions do I want to be subject to you see all the time you know companies like Amazon say well we we don't really have what they call nexus in this state we're just shipping stuff through there so you can't really tax us for it those kind of things they do pay sales taxes but they do try to avoid a quote certain other kinds of regulations and taxes were possible so that happens all the time in the US so as I said the US is kind of strange there's other large or countries that also have states if you will who also in a sense wind up competing internally with each other I think one of the things the US is doing has anybody heard of the global minimum tax it's a great idea that we had here it's like okay so in the US we'd like to raise everybody's taxes what we noticed is you all in the front row want to leave and go to places that have lower taxes so the brilliant idea is we said hey let's have a global minimum tax so that every country has the charge at least 15% of your income is a base minimum tax and if we do that then you'll be less likely to want to leave the US and I can raise taxes so it's a fairly transparent scheme but the current administration has decided to push a global minimum tax so it's no surprise that they want to do that it hasn't passed obviously most countries are resistant to the idea they come back to the US and say no that that takes away our availability to compete effectively so countries on taxation are classified regulated on digital assets and they're all over the place right now so most countries haven't passed strict laws yet on regulating digital assets some have some have outlawed you know things like cryptocurrencies other ones have said that they're fine as legal you know assets and so on in the US we even have fights in our own government which is kind of interesting so the CFTC says that they think cryptocurrency should be a commodity and there's a new draft bill by Senator Loomis and Gillibrand that is saying that they fundamentally agree that cryptocurrency should be treated as a commodity like gold or wheat or something else and that's how they should be regulated and taxed and so on and then the SEC with Gary Gensler who's the chairman there says no no no based on the behavior of how certain cryptocurrencies are actually used they're really more of an investment and they should be treated like stocks investments like an IBM or Google or any other stock and so they should be taxed using capital gains taxes and all that and so there's actually a lot of disagreement within the US government at the federal level on how to do this and so recently there was a thing where SEC actually has put out a quality it wasn't a study it put out a finding I say that there were nine cryptocurrencies that they felt were violating federal security policies so none of that's resolved and of course the secure the cryptocurrencies couple of them come back along with Coinbase exchange and said no we're not we're really cryptocurrencies and that's how we are so these things are up in the air right now US Treasury in the US has a responsibility for in a sense printing our money through the US Mint so they control the actual fiat currency so if you have a $50 bill or $20 bill or whatever US Treasury was responsible for that on the other hand when we look at a digital dollar or central bank digital currency if that were to happen in the US where's that going to come from most likely I say likely because it's not law yet the Federal Reserve will have the responsibility to manage that so there's been opinions that the Federal Reserve should control that but there is no law that says it has to be done by the Federal Reserve so they have been in a sense investing in a digital dollar since 2017 that I'm aware of maybe even before that so innovations and securities so a couple of things defy finance we've talked a little bit about that but basically it's all these new financial products and services built on tokens using smart contracts blockchain and what they're trying to do as you hear on the theory is that we're going to in a sense disintermediate the existing financial system and try to get rid of it so there's a in life there's always a theory on something and then the reality that doesn't always line up so the theory is that all of these financial intermediaries are in a sense unproductive, inefficient, can't be trusted and they cost too much to use so we should get rid of them all and replace with just peer-to-peer transactions and so when you look at the systems that are out there in the defy world today and good examples would be like Uniswap or something like that they're not purely decentralized but they're close to the theory of decentralization reality is yes still it's he and I can't trade crypto currencies directly we have to use a platform like Uniswap to do that so are we a hundred percent decentralized? No and is Uniswap perfectly decentralized as a network? No but they attempt to be let's put it that way so Uniswap might be a good example of something that's highly decentralized as an exchange but a lot of the other ones like Coinbase and so on aren't even close to that and they don't pretend to be they're just exchanges for cryptocurrency and in fact they have more much more of the market than something like Uniswap so they're again the theory doesn't line up with the ability to execute well all the time or the ability even to be trusted so that's a big problem and it's actually a problem for consumers because it makes choice difficult you know most of us like me I think most of you are like me you're lazy lazy people don't want to make tough decisions I don't want to think about it I just want it to be easy but unfortunately the complexity of the defy marketplace and even the traditional financial marketplace is complex enough that it makes making good decisions difficult so one of the challenges is we have no your customer anti-mining wandering rules OFAC compliance for foreign asset accounting and control and so on so all of those regulations apply in the US and certainly most European countries have the equivalent of those regulations in place so whatever you're doing in the financial space all of the providers who are in the financial network have those responsibilities and so when you have other exchanges and crypto exchanges are they try to run away from that where they can but in reality many of them started to accept the idea that they will be regulated and that they have to comply so some of them have in a sense avoided that and other ones have said no finally if we get if we comply with the existing regulations in certain jurisdictions we're more likely to be accepted as a place to do business with and if we avoid those regulations where there's more risk so that's a big challenge right now also we have in the financial world insurance payments and loans so everybody's talked about cross-border payments or remittances from one country to another that's one use case but any type of payment loans also fall in this category insurance as well asset management of any kind of asset and then digital identity and credentials so you know most of you beyond having some sort of legal identity whatever country you're in you also have a maybe a degree from a high school or college you have licenses for your vehicle maybe licenses to operate in your profession and so on so all of those kind of digital identities and credentials are important to track as well so governments try to react and be innovative and if you look at it I guess maybe I'll say no surprise smaller countries tend to innovate faster than larger country countries on average for sure and so in my case you know Liz Tanner who I worked with at Rhode Island led me to find out that Estonia was one of the leaders on the planet and trying to do digital government for more than 20 years now other places Luxembourg Lichtenstein they have one of the most innovative financial innovation laws focused on blockchain they were smart enough to even future-proof their blockchain act which is pretty interesting compared to what the US is drafted and then Asian countries have also left led a lot on crypto so Singapore Japan where my nephew is Dubai some of those other ones have certainly done more on crypto as well on regulation and support and EU European Union has been a leader on studies and regulation as they say Europe is famous for regulating everything first and then letting somebody else innovate it so there's the the European Central Bank is has a lot of authority over regulating financial systems in the EU the World Economic Forum also provides studies on a lot of these financial and digital asset issues I also am part of the European Blockchain Observatory and Forum and we wind up doing research supports research reports on blockchain initiatives in the financial sector in other areas our reports are just reports that are publicly available but those reports wind up being input to the European Council when they consider legislation that they want to draft and then finally the big thing on innovation was the US executive order on responsible development of digital assets back in March of this year so the Biden administration issues this executive order which sounds very strong and what the order was but effectively the order didn't do anything except it told everybody in the federal government all the agencies with the exception I think of the US Army and the Navy everybody else had to study what digital assets were and how they should be managed and regulated in the US so there was it's a fairly long order but that's the net impact of it there's also which is pretty cool somehow I've got to find a way to get this handout to you see these purple things those are all hyperlinks that actually worked if you had a real handout so I'll apologize in advance I have a handout which somehow didn't get distributed through the conference but we'll find a way to get it to if you don't have it within a week or something then I'll say just get me on LinkedIn I'll give you you know the handout with the links but what's really cool this group has actually got a CBDC tracker so if you said I want to know around the world where essential bank digital currency in each country and what projects are going on this group has done a pretty good job of keeping current on that which is nice makes it easy and then this other group tracks digital identity projects and there's a sort of a global map and you can see where those are as well so now we'll take a look at some stuff this is one project I was associated with at DTCC there's something called the digital dollar project which to the credit of the found there's a digital dollar foundation and Accenture who's here as a partner actually did a phenomenal job the two of them to got together and they said hey if the US is ever going to do central bank digital currency right they sort of need to know how it should work before they try to draft the legislation to do it so with that kind of motivation what they did is they created this project and this is Christian Carla who's the director of the foundation talking about the digital dollar in sense he's talking about the value the digital dollar would have for the US economy which is one aspect of it but there's more to it than just that in terms of what the ability the value it could be to our community as a whole and same thing for any country that does a central bank digital currency Jen Lasseter is the executive director of the digital dollar project and she actually manages the operations and then there's an advisory group participants and pilot partners to look at actually what that both the challenges and the opportunities of doing a digital dollar in the US are so our company DTCC got together with the digital dollar project and said hey you guys have a bank you have a use case for in the financial system for doing security trades so since we managed the security trades in the US we'll partner with you on a project which we did call project lithium to in a sense look at using a CBDC network to pay for security trades that are settled on our network so we already have project Ion which does in a sense tokenized security settlement of trades that's running in parallel today to the current settlement network in production so that's Ion so we said okay let's take Ion that already works and let's imagine what a CBDC payment network would look like from the Federal Reserve if it were operational so the tough part of this is there isn't such a network because there can't be one till they legislate it right so the problem the law doesn't exist but they said let's go ahead and make the investment to figure out if there was a network make some assumptions assumptions about it understand how it works what the limitations are and what the challenges are and then from that we can figure out what in a sense of to in a sense inform what the Federal Reserve should do for that particular use case when they come up with a network so it was a good idea very challenging to figure out what the Fed might do in the future but they the project collectively made some very good assumptions about how that settlement might occur so the key thing was we wanted that the CBDC payments would be on a Federal Reserve network that would run the CBDC side we already have a trade settlement network over here so now we're using a second network for payments so that was the concept and so it would look something like this conceptually right so if you say we already have I'll quote the DTC network that does settlements and it does more than just custody it does payments of all kinds but over here we're saying if the payment network is going to be the Federal Reserve instead how is that going to work you're going to have two separate networks that have to talk to each other and so when we looked at that we know in a sense what our DLT platform is but we couldn't assume the Fed is going to use our platform so we can't assume that they're going to talk you know in a sense at a blockchain to blockchain level so in effect we said okay we're going to implement a blockchain on their side one on our side but they can't know we can't assume that they're going to talk directly at the blockchain level so we said the lowest common denominator is just to use API's to talk which is fine so for the time being until you know different we're using API's to communicate but the idea being that a seller has his securities if I'm selling IBM stock it's in my custody bank at Fidelity and the buyer his custody bank might be Vanguard so DTCC has to transfer the IBM stock that sold from Fidelity over to Vanguard and we already do that at the same time we're saying but the payment in a sense from the buyer who bought the IBM stock his payment bank might be Citibank and his the seller my bank since I sold the IBM stock might be Bristol County or something like that so there's this banking network here the Fed has to run that connects all this stuff for the payment of CBTC to pay for the stock that sold does that make sense to everyone conceptually it's pretty straightforward it's not a complicated problem in that sense and like anything because you're not doing a simple asset swap you've got multiple parties here as you can see so there's four banks involved two networks and you're really doing two different assets one asset you're swapping is securities the other asset you're swapping is payment so he'll say oh Bitcoin it's just an unspent transaction model that solves everything well it doesn't in this case because you've got two different swaps that in a sense has to be coordinated and so the problem is I've got two swaps and four banks and the question is what if in my case Bristol County small bank it's not Citibank or JP Morgan what if they don't fulfill their side of a swap right you know and the other swap does occur so in a sense how do you in a sense solve what I call the problem of swapping assets and the real issue is you have to have some way of doing what I call custody right it that's a trusted model for that that's the whole point so the idea being again using the example that you're going to go through this flow to in a sense do the you know two different two different swaps so that was DTCC and the idea of trying to do a central bank digital currency so finishing that that was just a test the test went well for what it's worth and so now they're writing up a report on that and that's the status of that project there's also something called Project Hamilton which is a different project from the Federal Reserve and that one was actually pretty interesting because what they were doing there was trying to test capacity so what they did is they came up with two models and they said one model they didn't even use a standard blockchain they didn't use a theorem or fabric or anything they said no no we're going to build something from the ground up that's super simple it's not a real production environment but we're going to build something on level DB with the idea that we can compare what a blockchain model is where you order the blocks you know transactions go into blocks that are ordered on a network or compare that to what if you just took a database and said every transaction is guaranteed but we're not going to order them in blocks at all and what they found was for the same transactions they could get a hundred and sixty thousand transactions a second in their test network but if they only did a two-phase commit and forgot what they call the atomizer that ordered them they could get one point seven million or ten times faster just by doing two-phase commit across a distributed network which was a good finding to see because it tells you okay if you're thinking about the CBDC network how would you engineer it in effect for performance and then finally a couple other areas of innovation the there's a something called the Fed now network earlier there was a Fed coin that was an earlier project way back in 2017 the Boston Federal Reserve created something called the Fed coin is a test model that didn't go anywhere but it didn't set sort of the foundation for some of these other projects but the Fed now network there's a new network coming from the Federal Reserve that's supposed to be a faster version of what they call the Fed wire network so major banks are connected on the Fed wire network in the US and it does what they call a CH transfers from one bank to another overnight kind of thing the idea with Fed now is it would be a faster network more inclusive bring in more banks credit unions and kind of thing and who knows maybe organizations could be directly part of that network as well so anyway the idea of being the Fed now network is coming in place it's supposed to arrive in 2024 in production but you know those are always dates are subject to change the bigger thing is that one of the in a sense board members of the Federal Reserve brainered said that you know the real issue is they're trying to understand whether or not a CBDC payment would make things a payment system would make things safer simpler or more secure and what other risks might it impose you know over the current systems we already have so all of that is the research they're working on and they're trying to figure out as they say what kind of guardrails do they need to establish what kind of regulations and I will say that digital dollar project that Accenture is one of the sponsors on is doing a really good job and trying to figure out what that landscape is so that's really where the value point is consumer protection matters everybody's aware I believe the general data privacy regulations in the EU in a sense past several years ago that was a model for everybody else US now has some privacy laws in place as well but there's all these areas of a data privacy right so your data is exposed everywhere not just on the internet not just to Google but everywhere else everybody collects your data when they don't need all that when I go to a bar to get a drink I have to show my driver's license I'm sharing data I don't need to share all they need to know is that I'm of legal drinking age you know in that state wherever it is instead I went up sharing more data so privacy is a big issue and consumer data protection certainly in the financial services world and digital assets matters as much as it does anywhere else so the idea that GDPR put out is that there are some principles for what they call data controllers anybody that collects data has access to data or manages data on your behalf has these responsibilities that they're their principles on controlling the data is the collection of the data needs to be lawful fair and transparent so they in a sense attack companies that aren't following those policies today there has to be a limitation of purpose that they can't just randomly collect data if you're trying to figure out whether or not I can drink in your bar you're not a you're not allowed to ask me you know do you have a job how much do you make a year those would be invalid questions for that purpose data minimization don't collect more data than you need to fulfill the responsibility obviously accuracy how long do you hold the data you know do you keep a copy of that or not integrity confidentiality ensure that nobody else if I show you that I'm over 18 make sure that nobody else can see that and accountability if you've collected that data you're responsible for it so all those principles makes sense for managing data privacy for sure and in the space of central bank digital currencies those same things you can assume will apply as in a sense principles for managing that so if I look quickly at legislation trends what I can see is Europe again has something called markets and crypto assets as a regulation that has passed in the EU it's not in force yet but it has passed and the European Commission's mica proposal is a framework to regulate aqua crypto assets and the service providers in the EU EU under a single licensing regime and that's actually pretty complex because like the US like the US the challenge of it is like the US the challenge of it is that the states in the US have jurisdiction for the most part over banking and insurance not the federal government except when the federal government in the US passes a law that oversees that supersedes that the same thing applies in the EU the countries have responsibility for issuing licenses and regulations around financial systems that may differ from one country to another but if the EU has set a law that applies across the EU then that supersights supersedes those local regulations so the challenge of mica is that as they say they want to give legal certainty for crypto assets they're not covered under existing laws make sense establish uniform rules so on but again that the phrase is not covered by existing law so sometimes there is an existing law the nice part about mica is that it's not attempting to replace all that those are some of the features of mica but that's what mica is about Wyoming in the US I'll I'll give you the slide deck to read through that but they were a leader in trying to say we're a state we're gonna take over crypto assets as an area that's not governed and they passed some laws back in 2019 that were very innovative they looked at what wasn't covered and said we'll take that so Wyoming managed digital assets the last thing is the US executive order on that and that was the attempt I mentioned earlier where in a sense the federal government is telling all of the agencies in the government that we want you to go through look at digital assets and figure out how they should be regulated the most interesting part of that law was or part of the executive order was it's like giving a teacher giving you a homework assignment saying here I want you to turn it a term paper but by the way a term paper that includes these facts I'm gonna give it an a so they sort of told you what the right answer was they basically said that for digital assets that are similar to traditional financial assets like security stock derivatives whatever it is they should follow if they're in the same business the same risks in the same rules they should follow the same regulations so in a sense even though they were asked to study these the department's already know what a good answer looks like if you're working in one of those departments the Loomis bill as I said earlier all that does is map back to the CFTC record recommendation that says take those digital assets and make them in a sense managed as commodities so that's really it we've covered quickly everything so we this is a set of takeaways I think the biggest thing is the fact that in the US and in the EU central bank digital currencies look likely they are going to happen how they're going to get regulated is not clear the fact that they are going to get regulated is clear at some point the other thing is both EU and US are working on building the infrastructure needed to do that correctly they're both doing studies in a variety of different ways to figure out what makes sense for a central bank digital currency and digital assets what you are seeing is there are some things that are saying certain things are now in a sense clear about what's going to get regulated for what's worth so that's the end of it want to thank you all for going through a quote a long presentation on digital assets and legislation but really legislation stuff to net it out is really just a risk model where are we now what's likely to happen and we're likely to see with some of the work that's been done from both some of the agencies and some of the private things like digital dollar projects we're getting a sense of what a central bank digital currency would look like in the US and in the EU we're also getting an idea of what that would look like for EU as well so with that I want to stop time's up so I want to thank you all and good luck with your digital wallet and your digital dollars