 Thank you so much to Daniel for that excellent summary. Next up is a panel that will continue this conversation and explore how CBDCs could transform economies and financial systems in the future. Live Q&A is available for this session, so please submit any questions through the engagement hub for registered attendees under the day two live stream. Okay, as we wait for our guests to load up and on screen, my name is Chris Brummer and I'm a law professor over at Georgetown University Law Center. And I am just delighted to welcome with me some of the world's great experts on both financial inclusion, central bank, digital currencies and digital infrastructures more generally. I think we'll just go around and have each of them introduce themselves. But before I did, I did wanna give a thanks to our organizers, to Michael Barr, Adrienne Harris and others who have been involved. So I guess we'll just start off with this group of luminaries for their introductions and then we're just gonna go straight into the headline questions. We'll start off with you, Lisa. Lisa Cook, Michigan State University. And world famous economist. And yes, Chris Giancarlo, please. Thank you, Chris. I'm Chris Giancarlo. I'm the former chairman of the U.S. Commodity Futures Trading Commission. I'm senior counsel of the Wilkie Farn Gallagher and I'm a partner with Daniel Gore-Find who you've just heard of as a founding member of the Digital Dollar Project, which I look forward to discussing with you in this session. This is also apparently one of the most modest sessions that you'll ever hear because Chris Giancarlo was also the chairman of the CFTC, a little agency regulating a good chunk of the financial system. Bejoy. Hi, yeah, thank you. Happy to be here. Thanks, Chris. Bejoy, I ask of the chief economist of e-currency. We provide the tech for central banks to issue CBDC. We interact with about 30 plus central banks around the world, former chief economist of Asia Pacific at the IIF. Great to be here. Great. And then finally, Morgan. Hi, I'm Morgan Ricks. I'm a professor of law at Vanderbilt Law School and previously worked at the Treasury Department in the Obama administration. And I've done a fair amount of writing on CBDC and in particular the Fed account implementation of a CBDC, which I'll hopefully be talking about a bit. Wonderful. Okay, so, you know, certainly just in terms of Morgan's response in and of itself, I think it's good to maybe start off with some definitional questions just so that we know what we're talking about. Usually when you think about the FinTech ecosystem, there are plenty of terms of art. And those terms of art may be used and deployed in different ways and different contexts. So from that standpoint, Bajoy, I mean, has there been any progress in terms of understanding what a CBDC is, both definitionally, but also in terms of the choices in potential design features of CBDCs? So, I mean, maybe you can walk us through again. What a CBDC is? I mean, certainly Dan has done a great job in sort of queuing us up. And then are we seeing even now certain kinds of recognizable patterns? Yes, Chris, yes. Lots of progress in the last couple of years. Essentially, the question is to remain relevant in the digital age. It is clear that the central bank of the future needs a monetary instrument, which is digital alongside notes and cards. So what is a CBDC? CBDC is a liability of the central bank, the digital equivalent of physical cash. It is part of M0 and it is fit money. And of course, it has to be widely accessible. It can be used for low volume, high value transactions between financial institutions in the form of wholesale CBDCs but even more importantly, for an inclusive financial system, it can be used for high value, but low value transactions for individuals and businesses as CBDCs for retail use. Let me quickly touch on some of the gains. And before I talk about the two design kind of issues, in terms of the gains, also wholesale CBDCs, of course, these are efficiency gains in interbank and securities payments and settlements in terms of operational costs and things like that. But more importantly for retail CBDCs, they bring efficiency gains from lower costs and instant settlement along with expanded markets and financial inclusion. They also give access to the general public, well-regulated and state guaranteed means of payments and helps boost financial stability. Now, what are the two kind of design issues that we are talking about? For wholesale CBDCs, it's pretty straightforward. Financial institutions have accounts with the central bank so operationally and policy-wise, there's not much to it. However, the design choices are more complex when it comes to retail CBDCs. And here, there are two issues. Firstly, there can be account-based where individuals and businesses hold accounts directly with the central bank. Alternatively, there can be a value-based through a hybrid model where the CBDC is issued by the central bank as a digital bearer instrument. It is distributed through private payment service providers or used by consumers and businesses. So it can be thought of as a public-private partnership which combines both central bank and private sector innovation. And this approach is gaining popularity with central banks around the world. Just one last one point here. So the beauty of the hybrid model is the private sector builds and operates the payment rails and continues to innovate whereas where the central bank is actually providing the digital instrument that operates across those payment rails. So it's interoperable, which is great for financial inclusion, it's pro-competition and it's pro-stability of the digital and mobile money private providers. I'll stop here for now. Yeah, I think that's a useful sort of starting point and I know that Morgan and others will have sort of more to add to that. But one is I guess the access point issue, are we talking about a kind of digital currency that's accessible at the wholesale level or the retail level as what's alluded to earlier and then what kind of payment rail is it and who builds it as sort of being the second question as to whether or not you have a hybrid structure. Mr. Chairman, what are you seeing globally, certainly in terms of the kinds of design choices central banks are making, you've obviously been at the cutting edge of a lot of these conversations over at the Digital Dollar Foundation. But from those conversations with central bankers overseas and in other jurisdictions, how do you listen to those conversations and how are they comparing to how people are thinking here in the United States? Yeah, Chris, when I sort of survey the globe generally, I see six, what I call imperatives that are driving central banks. And as we know from work done by the BIS, over 80% of the world's central banks are exploring to some degree or other central bank digital currency. And so as they say, I see six general imperatives. I would start with a geopolitical currency influence and power that comes with that. And I think that's certainly driving to some degree China's very world leading efforts in this area, but I think to some degree the European Union as well, I'll turn to the US in a second, but just focus on the globe. In terms of another imperative is concern about data, the data of financial transactions. If data is the new oil, central banks are concerned about that very powerful and very valuable resource being controlled by commercial entities as opposed to central bank entities. And then a third imperative, I would say is financial inclusion. And if we look at the work that's being done in say countries like the Bahamas with their sand dollar initiative, they've got a lot of very digitally sophisticated residents, but actually a relatively low level of financial inclusion. And so they see a digital transactions as a sort of an entry ramp into greater financial inclusion. And then a fourth imperative, I would say is just modern digital infrastructure to move from analog to digital transactions. And certainly in the wholesale area, Singapore and its monetary authority is really exploring the wholesale institutional use of this new technology for less friction, greater speed, greater velocity of money. And then a fifth imperative, I would say would be surgical precision with monetary policy. The ability to utilize monetary policy in very precise, very targeted, look at micro community specific areas, speed as well. And then the last one is one that I talk a lot about and that's social values. I really believe, and I've said this for a long time, money carries with it the values of a given society. And I think that China, for example, with its notion of social credit with its tradition of relatively strong state surveillance and currency controls, wants control of money in order to make sure those values are incorporated. And the European Union with its strong tradition and legislation against commercial exploitation of data wants to make sure the values of their laws again GDP or our laws against commercial exploitation of data is there as well as currency support. Now, just briefly to take those six imperatives and apply them now in the US, the first one of geopolitical currency influence. I actually think that doesn't resonate right now with the Fed, the dollars probably at an all time high in terms of its geopolitical influence. And I don't think the Fed perceives a need to innovate for that purpose. Certainly a lot of folks in Washington got real upset with the prospect of Librecoin and the notion of financial data falling the hands of commercial players. And I think that brought a lot of voices into the debate about CDBC. And also, we've got a long tradition of protecting data privacy from government interference in our fourth amendment. And so the notion of data, who owns it, who's protected in it, what are privacy rights has brought a new, I think an interest in this from people that are focused on civil liberties. Financial inclusion, I think, well, you've got folks right here on this panel that have been focused on this for years, not just with the onset of COVID, not just with the onset of CBDC. And yet I think that this audience now is looking at CBDC and saying, how can this be a tool for greater financial inclusion that's been longer concerned? Then infrastructure, I mentioned before this notion of tokenized digital wealth. We know that the Boston Fed and MIT is looking at core infrastructure aspects of CBDC. Monetary policy, that surgical precision, I think nothing has pointed out the lack of precision in our account space model than COVID. When millions of Americans were waiting a month or more to receive relief by paper check and over a million of them went to dead people, we certainly know we don't have a precise precision surgical like approach with our existing account space system. And then finally, social values, which as I said is the one that I keep coming back to, at the end of the day, the dollar does carry with it in its global role, certain social values. Values of individual rights of privacy and privacy in your financial transactions provided they're not engaged in illicit conduct. Free speech and the ability to deploy money in a way that reflects your own personal values without state interference. A free enterprise, the ability to raise capital to build businesses. And then an issue very important to me at the CFTC was lack of government interference in marketplaces. The reason why the world trusts a price of cotton and soybeans to be set in American markets. And not other markets is because we don't have a government home team in the US that steps in markets when they go down to make sure they go up the way it's done in certain non-democracies. Those values are built into the dollar. And I think one of the most important reasons why we should be exploring the central bank digital currency in the United States is to make sure those very values stay in the digital form of money going forward. Because there is a contest underway right now for what values are gonna dominate in the future of money. And I think those values that have gotten us to where we are, we need to make sure they're built in to the values of money going forward. You know, I wanna pick up on that as we move to Morgan. I mean, some of the great observations that were just made. And I think it's useful for the audience to keep in mind is that the definition of what money is is actually currently being investigated and refined and there are questions about what money should be, what money should mean in a world where it takes this leap from a kind of paper or even traditional electronic sort of infrastructure to a specifically to a digital one. We've heard Morgan conversations as to sort of two different vectors by which you can imagine what a CBDC or how a CBDC could operate. We've only really thought or kicked the tires at least initially on those two questions of whether or not there's wholesale retail payments. And then again, who's involved with building that infrastructure? But again, the qualitative features of that infrastructure itself can differ considerably. We've heard a lot about values here in the United States and there's certainly be a lot of elasticity in the CBDC debate, even if you're in the United States depending on sort of where you're looking. How in your view, does the conversation on CBDCs intersect with other conversations, conversations that you've been very active and involved in on Fed accounts, faster payments and postal banking? Yeah, so that's a great question, Chris. And one way of thinking about this, about CBDC is a majority referred to this, which is that it's a sense of which we already have a CBDC, which is reserve balances that banks and certain other financial institutions are allowed to hold at the Fed. And in those accounts, they're digital, right? It's an entry in a digital ledger. So it's a central bank digital currency. It's part of the monetary base. And those accounts, by the way, are pretty great. They offer real-time payments, which we really have since the 1970s. They carry interests that's higher than ordinary bank accounts. And they're completely non-defaultable, right? They're pure base money. But they can only be held by banks and other financial institutions, whereas ordinary physical currency is an equal access resource. So we really have this sort of asymmetry at the core of our monetary framework. There are two kinds of money to Fed issues, physical currency and then bank accounts. And one's available to the general public and the other is for an exclusive clientele. And so one way of thinking about the CBDC debate is to think about expanding access to the form of CBDC that we already, the Fed already offers, which is an account-based and not a bearer instrument, not a tokenized digital currency, but an account-based digital currency. And so there are several, as you mentioned, there are several strands of a policy thinking that have been going on for years. One argument that both Chris and Bajorio referred to was the inclusion aspect of a CBDC. This is an issue that really is almost unique to the United States and the developed world that we don't have really full bank account penetration across all demographics. And so the postal banking idea, which has been around for many years, was really an inclusion-based argument, right? The arguments for postal banking or expanding access to the mainstream system of money and payments. The Fed account idea, which I and a couple of others wrote a paper about a number of years ago, but I don't wanna claim that we were the first to ever think about this. I mean, James Tobin, the great economist, wrote a paper in 1987, arguing that everyone should be able to have what he called a depositive currency account at the Fed, which is exactly the same concept of just expanding access to accounts. And so that idea has been also around for a while. And the CBDC debate, as both Chris and Bajorio referred to, is somewhat more recent, inspired to a significant extent by the cryptocurrency, the emergence of cryptocurrencies, where I think what really, really set off the debate over CBDCs, and then further accelerated pretty dramatically when Facebook launched its Libra initiative. And I think that's what really, really lit the fire under the ranks to think about this, to think about these issues a lot harder than they had been previously. But these things are all sort of in some ways converging into a single discussion. As you say, there's almost a philosophical question about what money is, what's the nature of our monetary framework, how fragmented is it going to be versus integrated? How available is it going to be to everyone? What are the benefits? What are the monetary policy benefits of having having a CBDC of some sort, whether it's account-based or token-based. And so we really see these debates converging now into more of a single unified debate. Yeah, and I'm just gonna follow up with that just so that our audience can sort of, for those who are new to this wonderfully, sort of interesting world, is so part of it is whether or not, because we've certainly had e-money and we've certainly had also central bank digital currencies. And then part of the debate, it's not really a debate, it's more like kicking the tires to see what's best at this point in time, is, okay, we have new kinds of infrastructures that allow, as Joy sort of hinted at, a kind of decentralized architecture, right? And there's always been this question of decentralization, I suppose, because there's always this question as to what is the proper role of, say, private banks in money creation and the like. But that question becomes sort of supercharged when you introduce a technology that is itself sort of built on decentralization. And then you ask yourself, well, does a tokenized decentralized architecture, is there something different about it when you talk about a CBDC versus what would a CBDC look like using the current rails that we already have, versus, and I think it's really important to keep these all sort of conceptually distinct, what does it, when people talk about postal banking, is this postal banking in CBDC, sort of an account-based system, is this postal banking where you put some kind of tokenized layer on it? I mean, the post office in and of itself is almost a kind of a metaphor in some ways, because there are so many different rails that you could conceivably use. And I wanna get to Lisa, because she hasn't said a word, but if you don't mind, Lisa, just for one quick second, I just wanted to get Morgan sort of take on that, in terms of how you conceptually distinguish these three things that you converge, depending on who the person is in terms of their sort of plan for an upgrade. Yeah, well, look, it's a great question, Chris. And I think there's more of the one way to think about this. I mean, when we talk about decentralization in the context of a CBDC, you know, it's a central bank digital currency. So the word central is already there. There's some sense in which it's not, it's not decentralized in the same way that cryptocurrencies are. The central bank is there. It's the issuer of the dollar and it's the manager of this system at some level. That doesn't mean we can't have a distribution channels that are private, as Bejoy mentioned, and the customer interface for retail can be private, but there is a centralized aspect to it, no matter what, even if it's a distributed ledger. But on the postal side, I completely agree with you. I mean, I wouldn't necessarily say metaphor, but the post office we can think of as to the extent we need a physical interface of some sort, a branch network of some sort, which I think we all agree is sort of less important now than it was 10 years ago, certainly then 20 years ago. I don't go to my local bank branch very often anymore, and I'm sure many of the watchers don't either. But to the extent we do want that physical interface, and it is a central bank digital currency, it's an aspect of the federal government, you know, in the Constitution, the Congress has powered a coin money and regulates value directly adjacent to, right before it's power to set up the post office. And those are two money payments and postal service, basic communications backbone are just two aspects of public infrastructure that really have constitutional status here. And I think we can think about the post office as being a digital distribution or branch network to the extent that that is required. And a virtual channel, I mean, but as you noted, a physical in your neighborhood and virtual, which is just fascinating. Lisa, I know I've made you wait, sorry, but your expertise, particularly on these issues, is extraordinary. When you listen to sort of these kinds of, you know, the suite of options that really all of the other participants have kind of laid out, as well as the kinds of questions in terms of our values and the like, what do those features tell you as an economist about sort of the trade-offs that one could possibly see and in terms of how people are at least trying to evaluate the risks and the rewards of a central bank digital currency in all of its many guises. I have worked on financial crises since my dissertation, since I wrote my dissertation in Russia in the mid 1990s. So I've always thought about what happened in economies in the extreme. And if we had had a central bank digital currency in place for this pandemic, we would not be in the shape we're in, at least partly, at least partly. I put forward a mobile money proposal at the beginning of the pandemic because we don't have everybody registered to easily get $1,200 directly from the federal government. We use tax rolls and if you paid your taxes using a bank account, then you were easily paid. But there are a lot of people who weren't. Let's start with 25% of the US population is either unbanked or underbanked. So they would have had to have found the website that Treasury wanted you to sign up on to be able to receive your money through ACH. And ACH is not as, you know, it's speedy, you know, but it's not as speedy as it could be. People were suffering and they were suffering very quickly after the pandemic started. So we could have done better, say through a digital currency. So that's one thing, but then there are also many people who don't pay taxes, right? They don't make enough to pay taxes or for some reason they don't pay taxes. So the $1,200 could have gone that would go to an adult could have gone to a lot more people. A lot of these checks still have not been paid. This is the scandal. Much after the first ones were delivered, people still haven't been paid. And we know that there are people suffering because we see these food lines that are miles long. So we could think about the wellbeing of people being in the hands of something like a digital currency. So that's one side of it. That's the broad definition of financial inclusion. Typically we're talking about sort of, you know, low income or marginalized groups, but this is the American population and we've got to be ready for it. We can't wait until a crisis happens for us to be suited for that, to implement the infrastructure for that. I think Libra certainly put a fire under the Federal Reserve to quicken it's not just thoughts, but ways of implementation, figure out how to do this and practice. And I think that was a great idea. And a second wave of this is this current pandemic crisis. So I would say this is one of the biggest benefits. But if we're talking about generic benefits, certainly as a macro economist, I'm constantly thinking about monetary policy anyway, we could increase intermediation obviously, we could use the tools that we have even better. And given that interest rates are near zero, monetary policy is going to be less effective. We have fewer tools, anything that can make this more precise to make it work even better would be useful. So if there were any other time that a digital currency, a central bank digital currency would be useful, it would be now. Certainly there is the cost of processing cash. Now that is, it's still a cost in the US, it's a much bigger cost in some other places. But this is something that I worked on when I was at CEA and the Obama administration in terms of the cost of processing cash. At some point, we're gonna have to have that discussion about what we're gonna do with the penny. You know, Canada already got rid of it, we're spending more money on the penny. And the question is, when we're gonna take it out of circulation, I don't think it's weather but when. So we have to think about that. I think those are three major benefits of such a currency. Now there are challenges. Certainly again, when I think about financial crises, I think about bank runs first. And if it is an asymmetrically deployed digital currency, there could be bank runs and the kinds of bank runs that we see that might evolve slowly could evolve much more quickly. So that has to be managed but every central bank that I know who is developing this and having serious conversations is already thinking about that. So I would say that's at the top of the list. Certainly disintermediation, bank disintermediation, where would deposits go? Now deposit insurance obviously can take care of a lot of these problems but deposit insurance has to be evenly deployed and enforced, we saw this in Cyprus. Certainly a lot of the Russian oligarchs who showed up with their deposits in Cypriot banks in 2012 thought that these were going to be covered just because they had a lot of deposits. Well, that's not how deposit insurance works in Cyprus. So you get these anomalies but they are instructive. They should be instructive for how central bank currency is deployed. But rather than go on since I, this is one of my favorite topics. So preventing financial crises first and then making sure that they don't do significant damage second. I would like to leave time for any questions that the audience might have. And there are quite a few. This is a great constellation of experts. Just to follow up on your remarks there, Lisa, the FT's Isabella Kaminska sort of evolved in her thinking about CBDCs and part of her sort of critique was that, okay, well, it's not even so much disintermediation from the standpoint of commercial bank balance sheets from a financial stability perspective but what does this do to money creation itself to the extent to which those deposits kind of pick up and leave and she's been a critic and so I wanna make sure that we get all those sort of points in there. Has that been a yellow flag or a red flag or a flag in some way in your thinking? Particularly when you think about that as an economist about that disintermediation question. I think it's been a yellow flag and I think that those who are doing serious research on this are taking that into account. My thinking has evolved. I didn't believe that central banks needed a digital currency when markets were fine and the thing that I started thinking about when all of these cryptocurrencies were showing up was we're gonna have to bail them out anyway. So we may as well have our own currency if we're gonna have to bail them out if they're tied in some way to dollars, to hard currencies we are going to have to step in at some point. So we may as well have one that is regulated and that offers a counterbalance to these private currencies. I think that is the way in which my thinking evolved. So it was before the introduction of Libra, but certainly I think that with a balanced or hybrid system as Benjoy was suggesting, I think that we can get that kind of balance and with deposit insurance that is enforced and is well-written and well articulated. Yeah, Benjoy and then I think Morgan also wanted to get in on this question. Again, the money creation question not just from a balance sheet sort of commercial bank stability question, but where is lending coming from when you do have the entry of a CBDC? So let me take a short of it. First of all, I couldn't agree more with what Lisa is saying. She's absolutely spot on. So CBDC is a public good. It's good for monetary policy. It's good for fiscal policy. It's good for financial stability. There we are, e-money, cryptocurrencies, stablecoins. These are all private liabilities. So at the end of the day, the central bank needs to innovate and come up with a digital instrument for the digital age. But let me come to your question. So with regard to concerns, there are two sets of concerns and I have a paper out in the conference website on where we're not in Kansas anymore and all of it sort of detailed there. But the issue is really two concerns. One is banking disintermediation and the potential for triggering bank runs. Now there are mitigating issues in the design but I'll get to that. But before that, let's not overstate the concerns as also Lisa has pointed out. So in a modern money creation, a view of banking, banks do not necessarily need deposits for funding more generally to provide lending to the economy. So what banks really need are central bank reserves and capital to satisfy regulatory requirements. And after that, the lending itself creates more deposits in the banking system. Moreover, the volume of demand deposits is typically small in an economy. Another factor is that we've seen both in the US and elsewhere the rise of non banks or shadow banks has not undermined money creation and credit expansion by the banks in the US and elsewhere. Now Lisa talked about trust in the banks, deposit insurance, regulation, supervision and these are all backed by the banks providing value added services. These things do not change in our post CBDC world. Another thing that it should be noted is that typically retail users can switch out of the banking system, switch their funds instantaneously into money market funds or government securities even today. I could go to my computer and open and buy Treasury securities. That doesn't change. And typically the greatest background threat usually comes from wholesale funding and institutional investors already have access to other safe haven assets. And now let's talk about the design issues in terms of mitigating concerns. Now. Yeah, I just wanna make sure that we keep going around because now we're getting quite a few questions from the crowd. We're gonna have to target those things. Just one thing on the mitigating concerns in a CBDC system, we have limits on CBDC design on transaction sizes, on holdings as well as non-interest bearing or tiered remuneration systems. These are easy to design, easy to implement and that's what central banks around the world are thinking and doing. Right. It's kind of a calibration to sort of, as a kind of a bulwark against the capital bank system. Okay, I wanna return to just some of the questions that we're getting. And Morgan, you can also, if you have something to add to those regulatory sort of fixes or safeguards, but also an issue that Christian Garlow mentioned which was the privacy question and was something that's mentioned as well sort of in the queue, right? Money, whether or not you're using an account base or tokenized system, none of this stuff is quite as anonymous as good old paper in the suitcase kind of for good end and for bad. But there is this question of sort of whether or not when implementing a CBDC you are by definition sort of giving new powers to the state, how exactly do you create a kind of crypto currents or CBDC tokenized cryptocurrency where an account base, whatever you wanna call it, how do you create a CBDC infrastructure, right? That provides the privacy safeguards that one would need in order to have a free economy. Morgan, sorry. Yeah, so look, I think that's a terrific question and it's one of the big challenges and one of the big things that everyone needs to think about carefully with respect to CBDC, whether it's tokenized or account-based, you can have a permissioned distributed ledger, you can have a permissionless centralized ledger, so it's not inherent in the technology, right? We could say we could do a Fed account system where we said it's just like signing up for a Gmail account and you get an account number and you don't have to identify yourself. I think that would be a bad idea. I think that, I think tax evaders would love it, but when you have central banks own infrastructure being used for law-breaking, money laundering, tax evasion, terrorist financing, I'm not sure that's a sustainable direction. So I think some degree of privacy, some degree of identification is going to probably be needed no matter what if we're gonna do this at scale. And pure anonymity probably is not realistic and probably is a desirable, but then it does raise questions about access to your information, about law enforcement access. And this is something that has to be thought very carefully about, you know, the way we do it with the IRS is we have a very significant privacy, legal privacy infrastructure surrounding tax information and tax returns, you know, for someone at the IRS to even access your tax information without authorization or much less to share it is a criminal violation that can result in them going to prison. Legal process, a court order has to be granted before law enforcement can have access to tax records. And we can envision, as one example, replicating the legal privacy infrastructure surrounding the IRS and surrounding tax records and putting it with respect to CBDC or Fed accounts. And so there are, you know, look, there are relatively tried and true legal mechanisms for doing this, but I do think it's a very legitimate, look, there's no way to make it as private as currency transactions. There's going to be some record somewhere of a transaction having been made even if it isn't necessarily connected to the identity of an individual. And so it's inherently less private and less anonymous than a physical currency transaction. But that balance is something that's going to have to be struck if we go in this direction. And it's not an easy question. Can I just jump in with just a nuance on that? And that is that there is a fundamental difference between account space system and a token based system. And that is an account based system. You must establish the identity of the parties to the transaction and the account sufficiency of the transferor and the receipt by the transferee. And so you've got to identify accounts as well. In a token based system, the difference is you don't need to verify identity, you've just got to verify the token. And that's a mathematical process of identification. Now distributed ledger will contain that identity information, but those are design choices. How the identity is revealed or key design choices need to be built in. You could have a system where based upon metadata analysis, that identity identity is not unmasked unless there is certain triggers built into it. What a digital system gives you is the ability to make really precise and thoughtful design choices. You're not limited by the analog nature of the technology you can actually program in. And I think one of the most important choices that each economy, each society will have to make is where is that balance between individual privacy in a CVDC and governments lawful ability to surveil for legitimate law enforcement purposes. And here's my final point. Here's where I think the United States actually has potentially the killer app because we're one of the few constitutional frameworks that protect government surveillance privacy. Now we'll have to build jurisprudence around that to really protect it, but there's a social expectation of a degree of privacy already that's built into our fiat money. So my point is, I think if we get this right, a digital dollar could have as an attribute a reason to perpetrinage around the globe the right balance of privacy rights, maybe vis-a-vis say a Libre coin where there's an expectation of commercial exploitation or a sovereign currency by a non-democracy where there's an absolute expectation of surveillance. If we get a digital dollar right, I think we could have superior privacy rights and still have appropriate law enforcement interests. So Chris, very, very quickly and the chairman is absolutely right. So the way we approach it is the privacy part of it. And for the CBDC technology, you can use DLT or you can use another technologies which is conventional and both work. The issue really is the privacy for small transactions are protected in a hybrid design and by law, just as it is today, the privacy for large transactions may not be protected. You know, banks today have to report large transactions and in the CBDC world, so with mobile money and other providers, they'll have to report large transactions as well. So, and let me just follow up on that for just one quick second. And then I want to get to this interesting question sort of international economics question for Lisa. So, you know, what we're hearing is, you know, from the conversation between Morgan and Chris is that, look, you know, on the one hand, we do have expectations of privacy certainly with our fiat currency. The, you know, whenever you get to any kind of distributed ledger technology, there will be a trail of some sort that we have a legacy regulatory structure with regards to at least our taxes that may be useful for subjecting. It's you were adding that we do have, you know, some real expectations in our BS, you know, Bank Secrecy Act and other rules for when you get to the money laundering and KYC expectations, but then there's this extra little interesting dimension that gets back, which really takes us to the initial comments to this conversation that I heard, I think, from Dan Gorfin, which is this question of programmability, right? And what exactly, you know, what does that actually mean? Both in terms of the privacy layer, but also in terms of the larger questions as we sort of pivot a bit to financial inclusion. Thanks for the question, Chris. Now, just to come back to the CBDC, you know, I was intentionally keeping away from the technology side because there are technology choices. You can use DRT or you can't, you may not use DRT. You know, DRT has some limitations because of scale and things like that and also the privacy part of it, there's some problems there. But on the technology side, on the programmability side, it's very, very important two things. One is the central bank must have the capacity to do the core, to do the programming of the core platform. And by that, we talk about privacy requirements, interest bearing or not, transaction and holding limits. Now, typically in a hybrid system, the AML, KYC and all of it would be done by the private sector intermediaries. Only when it crosses and trips certain things like transaction sizes or something like that, only then would the private intermediaries have to report to the central bank. Now, what are the aspects on the programmability side is the customer facing needs and programming that really is something that the private sector is best able to do and should do that. So Lisa, one of the really interesting questions you may have already seen it sort of in the corner is whether or not a CBDC is good for everywhere in the world. Are there any cases where that may not be the case? That's a good question because the most compelling arguments that I was convinced by had to do with the economies I typically follow and those are emerging markets. There was a time in Russia when I was living in Moscow when it had the largest number of armored vehicles protecting money transfers than any other place in the world. So we have several problems associated with having cash and transferring cash and this would have addressed one of those with incredible central bank. So there was a period when the central bank had credibility and that's true now. Like there's credibility on a spectrum but when it had an immense amount of credibility this currency could have replaced cash in Nigeria. When I'm in Nigeria I sometimes have to carry bags of cash and that puts let's say small business owners at a lot of risk. Individuals who are just trying to make small and large transactions at risk. This could be a huge, huge boon for the central bank in that regard and address some other issues associated with crime, money laundering and so on. But I think that it really depends on the economies and it depends on the times when Greece was running out of money in one of its recent crises. It didn't have currency, euros to distribute throughout the country and people were stranded. Visitors were stranded, tourists were stranded without access to their own currency. So this is one place where cryptocurrency actually helps but this is something that everybody should have access to not just the privileged few who have purchased a private currency. So I would say it's not just particular types of currencies but there are inter-temporal changes. It would have been much more beneficial during the pandemic to have had this in place than just on a normal basis because we have our currency. So it depends on both time and space. So I think it could be useful everywhere. It's just a matter of degree. You know, it's not just Greece that runs out of fiat money. We ran out of coinage here in the United States just a few months ago. And think about it, why does coinage even exist? It exists to make change on paper fiat. Well, if we go to a digital dollar you don't need to make change anymore because it's- And that's what I was saying about the penny. You know, if you demote Pluto, you've done, you've committed some tremendous crime against humanity, against space. But, you know, we can get rid of the penny. You know, nobody's gonna miss a day where people haven't missed it. There's coinage, people are taking photos of, you know the U.S. is currently having a coinage and everybody is looking at each other like, oh, I didn't know that. So I'm saying that we have these natural experiments that could that elucidate the kind of behavior that I think humans would display. So I think it's been a great natural experiment in that regard. So it is growing, going dry would be a historical curiosity in the digital age. Yes, yeah, yeah. Morgan, I guess we only have a couple of minutes left and, you know, returning to the question of sort of what you can do under your FETA accounts program, you know. In terms of the delivery channels that are available just sort of with what the technology, with what technology is available now, maybe you could walk us through sort of the implementation and also again, this question of programmability to what degree is, you know, is that infrastructure the one that we sort of have in place, you know, programmable and accessible for other kinds of future upgrades. So I cannot hear you. I don't know if it's just me. No, I think Morgan's talking to herself. I can't hear myself. I got a noise. Go. Sorry about that. Look, you had to get another great question. I think that the, you know, look, I tend to air toward keeping it as simple as possible but no simpler when you're talking about something of this magnitude. We want there not to be technical glitches. We don't want the rollout of this to be like the rollout of the ACA exchange. We want it to be solid and complicity is important. I think for the most part, you know a bank account really is a pretty simple product. There's a retail interface that goes along with that but the underlying product itself really is a ledger into which debits and credits are entered. And we should think about not making it any more complicated than we need to. Now in terms of, you can imagine an open API so that different companies could produce different interfaces for a Fed account but the underlying actuality of money is a ledger system and that's true for reserve balances now and you could make the argument, well, we could have an argument about bear currency and the extent to which it approximates a ledger system. There's actually a whole academic debate around that but I think we do want to keep it simple. I think, and I think it can't look, the Fed has offered accounts virtually since its inception the Fed started doing payments between these accounts through Telegraph in the 1920s. I mean, it's been doing something very rapid payments electronically for a long time. It's been doing real-time payments between Fed accounts since the 1970s. We think of real-time payments as being some miraculous technological innovation of modern information technology but ultimately messages get sent over telecom rails that exist to the ledger and the ledger is a debit and a credit involved and that's the core framework for how a Fed account would work and I think that accomplishes, look, it's works great for the banking system and they love their Fed accounts, their reserve balances. I mean, there were entities that wanted to be designated as financial market utilities by the stock so that they could get access to an account of the Fed not because it's a fancy product but because it's a product that works really well extremely reliably, very cheaply, very seamlessly and gives them perfect safety. And there's one more thing I want to say about the safety bit because the question of bank runs came up and I completely agree with Bejoy that in the modern and with Lisa that modern bank runs that are damaging to modern economies have tended to be institutional as opposed to retail and that's largely because of deposit insurance but runs on institutional deposit substitutes or what we saw on a huge scale in 2008 and 2009 and again to some extent back in March of this year and one possible benefit of a CBDC is to reduce the size of those markets, right? To the extent it's going to be attractive you might see fewer institutional investors and large institutions that are cash parking going to unstable deposit substitutes maybe they prefer the CBDC to that and that might actually be a good thing from a stability standpoint. For the monitor. Bejoy, do you... Well, actually I want to get back to the chairman I mean the way and the ambition sort of when you look at CBDCs it differs dramatically I think that's what you had sort of identified from the outset. I mean what mass and monetary authority of Singapore wants and then China it's much harder to sort of read the tea leaves because it depends on what announcements are coming from where and what they want to do. I mean what's the scale of ambition that you've seen in terms of how people are conceiving in other parts of the world what a CBDC can or should do? You know as I began the conversation I think that there's many varied imperatives for CBDC. I don't think if there was just one drive in the conversation it would be easier to categorize the different efforts around the world and I certainly as I mentioned I think financial inclusion is one of them and a very important one. I would put that almost like in the demand side in other words that society seeking greater services when it comes to money but I also think there's a supply side. I think the central banks themselves want these tools. I think central banks themselves want to modernize currency, their own currency so it has greater global influence and utility and so I think there's a real I think central banks worldwide are experimenting with this because they see opportunity for policy precision, policy advancement, policy competition and so I think it would be you know it's funny money is as much a social construct as it's a sovereign construct. I think sometimes the people on the official sector think they've got the whole game themselves because they make money. Well, society is showing right now that it can also craft money and experiment with money so we've got this big kind of societal governmental experimentation going on globally. It's actually, I tell students I talk to you this is an exciting time right now what's gonna come out of this is gonna be transformational but it's complex there's many facets to it and I think one needs to follow all of them to kind of see where this ultimately leads and ultimately as I said I think it comes down to values and the reason why I think the United States needs to be in the game we don't need to be first but we need to be in the game because there's certain values that got the dollar to where it is and if we don't make sure those values are built into the future of money that's going to be a net negative for our economy and our society going forward if we don't make sure those values are built into the future form of money which the world is experimenting with as we speak. Well, I have to go and talk to my students literally right now but I do appreciate all of you for your time and I will be sort of taking all this great information it's just fantastic to have this level of conversation with really many of the world's leading experts so Lisa, Chris, Morgan, Bejoy thank you so much for joining us and I guess I'll be passing the baton back to our organizers and hopping now onto my other class but thanks so much everybody. Pleasure to be here. Thanks everybody. Bye bye. Thank you, bye.