 Hello, my name is Daniel Gore-Fine and it's great to join you today. I am the founder of Gadica Horizons, a FinTech advisory and consulting firm, and a co-founder and director of the Digital Dollar Project, a not-for-profit effort focused on exploring US central bank digital currency. I also previously served as the Chief Innovation Officer at the US Commodity Futures Trading Commission. So today, before I delve into design details or potential elements of a CBDC, a central bank digital currency, I'd like to step back for a moment and cover two fundamental points that set the backdrop for why we are even having this conversation about CBDC. First, I want to talk briefly about the evolution of money and I'm going to go way back in time here. At some point, roughly 3,000 years ago, human beings invented physical coins. Now, a physical coin is a physical token that people could exchange for current goods or services. A physical token was a store of value. It allowed people to basically store wealth for future consumption. In order to engage in trade, you would have a peer-to-peer exchange of a physical token. So I may give someone my token, they give me a barrel of wheat. Now this was an incredibly efficient, fast, and low-cost way to engage in financial transactions and commerce. If you think about how the world developed, we quickly discovered new modes of communication, whether it was through a horse and carriage, maybe through a telegraph, telephones, fax machines, and ultimately, to the current era, to computers and smartphones. When we got to this stage of human communication, we realized we could engage in commerce, we could engage in trade, but we obviously could not do a face-to-face transaction with a physical token, meaning things like coin or physical cash. So hence, we developed account-based systems. Now what is an account-based system? An account-based system is where we have a trusted intermediary or a trusted central party that maintains a ledger or some type of a database and can track transactions. And we trust that party to make sure that they account for when I were to transfer currency or value to another individual in return for a good or a service. Now to be clear, the account-based system is a great system, and it's worked incredibly well. It's allowed modern economies to flourish. And built on top of that account-based system in architecture, we have our current bank account system, credit cards, debit cards, e-money systems. And people can do a lot. You can transact, as I said, with people halfway around the world. There's extra security sometimes and insurance associated with account-based systems. People can secure rewards through these types of systems. Think about credit card rewards. Or you can secure credit through these systems. Now, given all those excellent benefits of an account-based system, there are also some, and we have to acknowledge, inefficiencies involved. They may be slower. They may be slightly higher cost, certainly than a face-to-face exchange of a physical token. And you may lack certain efficiencies when you're dealing with multiple intermediaries in a transaction. So I'll pose a question, and this will kind of set the stage for us segueing into CBDC. What if there were a way in our modern digital world to transact again in a more peer-to-peer manner with a token, almost as if you were exchanging physical cash or a physical token in the real world? So this is going to lead me to my second point in backdrop. And it's the idea that there are certain technologies today that can help enable or unlock that digital token scenario that I just outlined. So to boil down a lot of fintech buzzwords of the day, this in my view is what this period of tokenization, blockchain, and crypto all stand for. So we know that computers are connected thanks to the internet, and we know that they can do really efficient things with information. So for example, you can send an email halfway around the world with relatively few intermediaries at very low cost with very little friction. Now with tokenization and blockchain-based or inspired systems, you can do the same thing with financial instruments and assets. More specifically, what tokenization lets us do is it allows us to send unique information about value and about ownership of value halfway around the world at low cost with relatively few intermediaries and relatively limited friction. We can also do this in a fairly automated way. So much like we've seen with the benefits of email and other types of communication through the internet, the same is now true as a result of advances in cryptography and DLT-based systems. So that dynamic, in my view, is going to impact the way we transact all types of financial instruments and assets, including money itself. This was the driver behind the launch of the digital dollar project, as I mentioned at the outset, the not-for-profit effort to explore US CBDC. It was our view, and you'll be hearing shortly from my partner in this, Chris Giancarlo, it was our view that it's very important for the United States and the world to really think about the impact of tokenization on money. How does it flow through a complex global economy? What are the design choices and trade-offs? And how do we actually start doing the serious work now to understand how we should go about making those design choices? Should we move forward with the CBDC? Okay, so with this backdrop, let's shift to CBDC more specifically. As I've acknowledged, there are many design choices and related trade-offs when you think about CBDC design. So I'm going to walk through some of the bigger decisions that need to be made and hopefully set the stage for some of your subsequent discussions today. The first and most important really ties back to what I was just talking about, the fundamental difference between tokenization and account space systems. So with tokenization, what we are basically suggesting here is that you can have a third format of currency. This would be a digital dollar that operates alongside existing fiat currency and commercial bank money. It would mirror many of the properties of physical money, including its ability to work alongside and complement existing account space systems. A digital dollar issued by a central bank is backed by the central bank. It is a central bank liability, the most riskless form of money that we have. And importantly, I want to distinguish central bank money from commercial bank money, where when you hold a balance at a commercial bank, the counterparty is actually the commercial bank, not the central bank. So in many instances, for the average retail individual, the only type of central bank money that you can hold currently is physical cash or coin. A digital dollar would be now that third format of currency that could operate as a token in a digital format. Now again, tokenization means you hold a unique asset or instrument. This is different than account space systems where you have an intermediary maintaining a ledger and marking transactions essentially within that system. Again, these systems can be complementary to each other, but that is a fundamental design choice when you're talking about CBDC, specifying whether you're talking about a tokenized system or one that would operate within an existing account space framework. The second major design choice is around how you offer or distribute a digital dollar. So for example, through the digital dollar project, we have suggested that we should distribute digital dollars through the two tiered banking system, meaning you would distribute the currency through existing banks and regulated financial intermediaries and institutions, which could include regulated fintech intermediaries. So this, the way to conceptualize this is the same way that you would currently withdraw physical cash. Typically today, you would go to a physical ATM machine that's operated by your commercial bank and that's how you would actually withdraw physical cash. You could think of withdrawing a digital dollar in the same way through a digital ATM offered by a bank or a regulated intermediary. Now another option in terms of how you would distribute a digital dollar could be direct from the central bank to the retail individual, essentially disintermediating the existing two tier banking system. Now obviously, that is a decision that would come with a lot of potential implications and consequences that would have to be seriously thought through. Again, from a digital dollar project perspective, our view is that it would be radically disruptive to modern economies. And the role in the important role that banks play in terms of collecting deposits, issuing credit, and to circumvent that system, we think would have some real concern. It's also not typically been the role of a central bank to deal directly with retail individuals and to be able to operate things like the BSA, Bank Secrecy Act, and anti-money laundering regime. But that is an important design distinction and design choice for folks to think about. Interoperability is also critically important when you talk about a CBDC. Is a CBDC system going to be siloed in kind of its own captive ecosystem? Or is a CBDC going to be interchangeable with other global CBDCs? Potentially with other digital currencies that may be non fiat or government backed. And you have to ask how easy is it to convert from a digital dollar, for example, into an account space commercial bank money? Again, from a digital dollar perspective, we think that having interoperability is very important, especially to allow individuals who may be onboarded for the first time into a financial ecosystem to be able to readily move into commercial bank money, which would most likely carry things like FDIC insurance and be interest bearing. If you hold the analogy that a tokenized digital dollar is akin to cash, it may not carry insurance or FDIC insurance or be interest bearing. Of course, these are all design choices and different central banks could make different decisions when you think about how you would actually issue and then the interoperability of the system. Privacy is another critical area and it's one that is going to receive a lot of attention. At the end of the day, we think it's very important that as from a US perspective, we think about imbuing a digital dollar with the rule of law, our norms around privacy and protection of data and information. Now again, here there are going to be a lot of design choices. If you're operating a system, who has access to the information within that system? Can you use new technologies like zero knowledge proofs in order to solve certain regulatory interests like verifying identity without revealing underlying information about a transaction? These are all open questions. Another possibility when it comes to privacy and design choices is that much like we do with cash, we set dollar thresholds for certain information reporting. So currently with cash transactions or just any type of money transaction, above $10,000 triggers potentially certain types of reporting requirements or at least greater scrutiny. With a digital dollar, would you set lower thresholds? Maybe the way an ATM machine does on a daily basis and say below a certain threshold, you're willing on a spectrum of privacy and anonymity to treat it more like cash from an anonymity perspective. This is an open question. Another critical design choice is around the rails that you use to actually transact a tokenized digital dollar or digital currency. So you do not have to use a blockchain or DLT based system in order to transact a tokenized dollar. You could use a massive centralized database and that may be a very efficient way to offer a digital dollar. Of course, there may be privacy concerns, there may be resiliency and redundancy concerns, which is the reason, again, from a digital dollar project perspective, we thought it makes sense to look at either blockchain or blockchain inspired systems to think about how you design the rails. But again, in designing rails, that's where interoperability becomes very important. Can you move in and out of that ecosystem and how readily can you do it? Another point to make about CBDC is a question of crowding out of the private sector. And again, I'll share from a digital dollar project perspective. There's nothing that we view inherently antithetical about a CBDC and private sector innovation. In fact, I would argue that CBDC is public infrastructure. It's almost like upgrading our road system to an international highway system. Did that have an impact on how private transport models worked? Sure it did. But what it ultimately did was enhanced and created even better forms of private transport that were built on top of that infrastructure. We've currently made a design choice around money. The dollar is issued by the central bank, as we've noted. For retail individuals, it's largely only accessible in physical cash and coin form. That's a public infrastructure choice. And we've seen private innovation develop on top of that. We believe the same would happen with CBDC and, in fact, it could unlock significant private sector innovation built on top of a CBDC innovation. To that point, the last thing to note around CBDC and the promise and potential, I noted at the outset that it could help advance automation. Part of the reason that it can enhance automation is because of the programmable nature of tokens. This is software. So you can essentially embed compliance, regulatory and business logic around a tokenized digital dollar in order for the digital dollar to do certain things. And a lot of that can happen in an automated fashion. That's an area where I think there's significant interest and hope for some positive innovation that could develop. In terms of use cases, your panels are going to go into more detail, but I'll quickly flag a few really interesting areas that people tend to categorize and explore when it comes to CBDC. The first is the retail payments use case or application. And here, there's a lot of enthusiasm and hope around potential increases in access and inclusion. I would argue that the hypothesis here is that digital wallet solutions for custodying a digital dollar may be lower cost from a technology, operational and regulatory perspective than a traditional bank account. And if that's true and if individuals are able to maintain these wallets on nearly ubiquitous mobile and smartphone devices, you may be able to onboard a significant number of un- or under-banked individuals, whether domestically or globally. That's an area where there's a lot of interest. Also, it could be positive in the small business context by providing a new means for small business to be able to collect payments. There are wholesale and market applications. This could dramatically improve efficiencies around settlement, in terms of settlement times when you're dealing in markets. And finally, there's interest in international and cross-border application, moving money around the world and across countries and reducing some of the friction in efficiencies and costs associated there. With that, I think I will allow you to now hear from your panel of experts. And I appreciate you all giving me the time to share some thoughts and an overview on how we might contextualize CBDC, think about design choices and trade-offs. And I look forward to the rest of the day and the follow-on conversations. Thank you so much.