 Good morning. Good afternoon wherever you are, you know, it's probably not people people from From the east of the Middle East Meaning Asia and others are not on the call because this is not a convenient time and we have Daniel Sego was presented on tokenization in Blockchain NYC before and He's also An expert in you know, he's a blockchain architect, so he'll be able to tell us a little more about What's going on in? Cross-part of payments and CBDCs, which is a topic we chose for today to two announcements one is We are under the hyper ledger foundation. So we have to follow the antitrust policies of Hyper ledger, which is also applicable wherever you join from Different places have different Laws or rules regarding antitrust you just have to follow your jurisdictions antitrust the second is about respect and You are of course allowed to be To disagree with people But you have to do it without being disagreeable Which means you have to respect each other That is the other condition the administrative Guidelines from hyper ledger So without wait wasting too much more time. Let's hear Daniel On this topic and I will just disappear into the background the Meeting is being recorded Daniel, please go ahead and hopefully you can present I think you should be able to but if you're not just let me know Just give a shot and try to share my screen Hopefully you see my screen And I will just stop the video Because my bandwidth is sometimes a little bit limited But theoretically you should see my screen. So yeah, welcome everybody and and thank thank you very much We came for this for this great introduction What I'm gonna talk today about is like using blockchain Can you go into presentation mode we can see your Screen, but if you go into presentation mode, yeah, I would rather not do it because then I can't switch So I I just prepared a couple of like pages and if I just Beautiful. Thank you. Go ahead. I'm sorry to interrupt Yeah, it's just usually it's just big enough. It's just you know, I can make it a little bit like smaller It's just if I go to presentation mode then you know, sometimes my screen sucks a little bit and I just can't switch Between presentation and and prepared slides. So it's like like this one, for instance No problem. Just go ahead. Please. Okay. Thanks a lot. But I hope it's it's big enough up. So it's it's just visible, basically. So then the welcome everybody I'm gonna have today is is a presentation of blockchain and cross-border payments Which is a pretty interesting topic. I would say and then perhaps just like two sentences from from my side I'm a software architect dealing with with many different Projects mostly mostly blockchain projects. I got like two directions. One is one is of course I'm pretty strongly involved in in the hyper ledger community So I mean most competence I have with hyper ledger fabric But I usually make presentations on different interesting topics for instance and then and then occasionally I do like Public blockchain projects as well. That means sometimes solidity or solidity based Systems and and and developments as well So the presentation for today is is blockchain for cross-border payments and I Just prepared a couple of slides. So I have like like a couple of slides at the beginning on on cross What that is cross border payments How cross border payment can be regarded as as kind of an interoperability problem With like many stages or many payment models I got one one slide on on a very simple example on on correspondent banking via cross-border I mean cross-border payment via correspondent banking and then I will have just the the classical Roadmap on CDC BDC projects throughout the world and I just pick light free Exciting projects. These are not necessarily the the newest projects But they have like strong involvement in in in hyper ledger. I mean in the hyper ledger stack It's like an bridge project neighbor icebreaker and at the end I have just like yeah, like a small I would say comparison how like horse across border CBDC projects can have it with cross-border payments And then some conclusions and and further challenges So this is this is like the agenda for my for my presentation We can have like a questions answers and discussions at the end. I would say I mean If if if you have like, you know small questions or perhaps is if my if my network is not stable enough Then then you can interrupt me and and then then just go ahead. But for long discussions I Sought we're gonna have time at the end. So that's the plan for today and that's the idea for today So let me just jump into the details And then start with cross-border payments So typical cross-border payment use cases like like an e-commerce in reminitance It's just Practically just transferring money abroad in international trade, of course in travel especially It's again a business use case is like business payouts it's like trading platforms and the more enterprise use cases like like having cross-border payments in Incorporate treasury flows I have just one slide on the right That's black practically the the sheer amount of of cross-border payments split by use cases from 2018 through 2022 And it can be seen that that it is it is being increased being More important is the is the percentage of of different use cases of this of this increase So we can see like see to see our customer to customer use cases. That's like, I don't know probably at travel We can see something something similar. That's that's practically a small and constant segment at the top We can see see customer to business use cases. That's again, that's probably I don't know travel for instance Or perhaps reminitance is is C to C or C to B use case But it's again, it is slightly increasing on the top, but it's not many but not very much increasing We can see like business to customer use cases. That's again That's pretty constant and the top and what's increasing very heavily That's like business to business relationship and business to business use cases. I would say like International trade Corporate treasury flows and stuff like that are related to to this category So it's I would say that's for sure an increasingly important topic Unfortunately cross-border payment is not very efficient Or we are usually regarded to be not very efficient. It's even the G20 has a rule meant for for enchanting cross-border payments There's like a year. There's like a report for that practically every year So the problem is with cross-border payment that it has like many inefficiencies For the first round It's it's expensive. So it has transaction costs and exchange rates Which are sometimes. Yeah, pretty ridiculous. I would say So like there's estimated that for instance in terms of transaction costs transaction costs often Of a cross-border payment use case on average is is kind of 6.3 percent But it can be sometimes between between five to almost 12 percent So it can be pretty expensive in in some use cases Then One problem is that I mean the actors that play role in this in this use case Operating in a limited operating hours. It's it's usually like eight hours not 724 So it's it results in a low speed Practically so like a settlement or a clearing or settlement Behind the scenes might take like like five days. So even if like, you know, a credit card payment seems to be Happening just right away But the but the clearing and settlement behind might take days or in some some, you know, very bad situations It might take like weeks even So that's certainly one of the source of or one of the inefficiencies and one of the Sorry source of inefficiency is the is the limited operating hours of the of the actors or of the of the nodes maintaining the system One of the problem is the limited transparency Basically, it's not very much visible What's happening with with a cross-border transfer? Especially if it had luck if it if it has like many actors Uh, execute executing this transfer Then there might be some compliance and legal issues like taxi issues And then there can be many problems with with limited interoperability So there's just just one idea to consider cross-border payment as an interoperability problem Which has like infrastructure challenges Which can have multiply different intermediaries Uh different operational complexity again, perhaps, uh, different limited operating hours Of the individual nodes, uh, can be regarded as as an interoperability challenge as well So in some sense problems of cross-border payments can be regarded as as interoperability challenges And there's actually a bis report on that, uh, which tries to analyze somehow Problems and and challenges of cross-border payment as interoperability challenges They use like two different Dimensions, I would say One dimension is is this one. So if we speak of like interoperability What we mean here is like like Like the possibility of corporations of of different payment systems, probably And then if we speak of like interop in this sense, it might not be just one statistical thing But we might as we might as well have some different dimensions So for instance, or as an example, uh, we can speak of like technical interoperability These are like technical infrastructure challenges Or the similarities or differences of of different technical infrastructures As an example message formats and so on and so forth We can speak of semantic interoperability Uh, that's like the same interpretation of data So, I mean, usually we think of that way that there should be some kind of a technical interoperability And if we have that then then it's a questionable if we have semantic or if we do not have semantic And on the top if we have both technical and semantic interoperability Then then then we might as well have or might as well not have business interoperability on top Which are the practically same rights obligations Doing business legal compliance and and stuff like that So just giving one simple example If we if we just consider this this meeting here Then we can speak of like three different interoperability One is like a technical one, which is which is practically the This conference, which is which is going on on a voice over ip protocol That's kind that's kind of a technical interop part, I would say Then we can speak of like semantic interoperability in this meeting, which is which might be like the language Having like English as a general language And we might as well speak of like some business interoperability as well It's like you know having Q&A in the end Or just from my side perhaps reading the chat just occasionally And so on and so forth So one way of thinking problems in cross-border payment Is like thinking of interoperability Of course if we have many systems that are not Not compatible with each other Not from a technical, semantical or business perspective Then of course the whole system will be inefficient It will be expensive. It will be slow and and not the best If we speak of like cross-border payment one of the classical model is like correspondent banking And then practically means like on a very high level. This is just one slide very high level slide Just to demonstrate Actually the interoperability problems in cross-border payment So if we speak of like Corresponding Mean like like accounts or services on behalf of settlement sometimes treasury services operations Foreign exchanges are not through or through accounts One example is like the euro dollar. I mean if we if you know like the cross-border payment side So just giving one example, which is here. Let me just imagine that We are starbucks and then we just want to transfer money from from new york to Actually, it's Deutsche Bank london. So we might think of like london, but if it's Deutsche Bank We might think of like frankfurt as well So let me just think of we are starbucks and we just want to transfer like 10 dollar or 10 million dollar From our new york account to our london or Deutsche Bank account So for the first round, it's it's pretty simple. It's just the What we got here It looks that it should be like minus 10 From our new york gp Morgan account and it should be like plus 10 on our Deutsche Bank account SNS set and basically on the liability slide We can have like like that. It's it's gonna be like minus 10 from gp Morgan new york from the starbucks accounts And it's gonna be just just plus 10 on the liability side from from Deutsche Bank london But the problem is that let me just imagine in this very simple situation That we have the account at gp Morgan and on the london side. We have we have like account at the Deutsche Bank But then let me just imagine the gp Morgan and Deutsche Bank Doesn't really have any connections. I'm not quite sure it if it's true, but let me just imagine for this for this example So let me just imagine that Basically, we get we got city city new york and city new york and Deutsche Bank Has some connections. So practically Deutsche Bank london has like an account at city new york, basically So what we need to do for this cross-border transfer? We just we just need to have city on the road map Somehow and what we need to do that's that's like two things. So first gp Morgan new york To see that's practically this minus 10 reserves from assets from gp Morgan side And this plus 10 reserves on the city side Which is practically manifested on the account of Deutsche Bank london on the city new york side practically on the city new york account And then it's gonna be like again as we have this one It's gonna be as I mean this liability is the account of the Deutsche Bank at city new york We're gonna have like this plus 10 on the city new york I mean in the Deutsche Bank as an asset which is the account on the city new york side And this is gonna be actually the plus 10 starbucks account amount So, uh, this was a very simple example, of course, uh, perhaps it's it's just oversimplified But it clearly demonstrates that you know, I mean this interoperability Can appear at many different levels here So we can imagine that you know, even on a technical side like communicating with between starbucks and gp Morgan new york Between gp Morgan new york's and city and between city and Deutsche Bank london It can be challenging even on the on the on the network side on the technical communication side But it can be challenging actually, uh, on On a on a semantic level and on a business level as well So it's not necessarily easy and again, this is like an oversimplified example So we might as well say actually Deutsche Bank is not in london but in frankfurt So if you just want to transfer money to uh, to Deutsche Bank frankfurt, then uh, then we got like one more bank somehow on the road map So this is not just like one hop, but actually it's like two hops So we have like a british bank Somewhere here and then we have the german bank at the end of the end of the line So it can be more complex And basically if we just just consider the Possible problems of interrupts at each level then we can imagine that basically having like technical Interrupt challenges are semantic or business interrupt challenges Actually multiply with the number of hops in this line in this line So that's correspondent banking We can have like another other dimension from from interoperability Between different payment systems Including but not limited to to correspondent banking And this is from this BIS report as well So we can consider like different structures of interoperability So the simplest one that I practically demonstrated on the last side Is this one that's this uh single access point We got here two jurisdictions and then practically Two two banks or two institutes Let me let you put it that way and we got one institute or one bank which Which acts kind of a bridge Between these two jurisdictions. So in our use case for instance Deutsche Bank london have like practically an account at city new york So this city new york acts as a bridge practically in this In this interoperability scenario This is of course the simplest one But the problem is I mean it's itself such a single point point of point structure Can have like like interoperability challenges But we can imagine if we have like many banks like hundred banks on this side and 200 banks on on the other side Then it scales very bad badly. So basically it's just Getting very complicated very fast and very inefficient very fast There are other structures as well so we can imagine like the The bilateral link we got like two jurisdictions and two banks and then each having an account in another bank so that's practically the as far as I know these are the nostril was through accounts And then since things getting better in a sense Then it goes smoothly the transfer not just in one direction, but in in both of the directions But the problem is Here as well that if you just want to scale So if you just imagine hundred banks here and hundred back hundred banks on the other sides Or if you just imagine not just I mean even like like two jurisdictions hundred and and hundred banks That's gonna be like as far as I know like five thousand connections So it's pretty many But if you just imagine that there are not just two countries not just two jurisdictions, but like I don't know 20 Then things getting even more complicated There's another structure as well. That's the hub and spoke model In this situation, we got to have Somewhere that acts practically as an agent which which just helps somehow In cross-border payment. So basically it connects several different banks on several different jurisdiction or several different countries Of course, it's it's it's much better in in sense of like connections or in sense of possible connections Because it's not exponentially. It's just just linear But of course it's getting it's getting complex. So basically this hub should be set up. It can have like All the inefficiencies in terms of charging fee for the For the for the service, which results in higher cost having problems in interoperability Having problems in operation and so on and so forth And of course one I would say ideal solution might be Which still doesn't really exist. But perhaps blockchain Gives the promise of of having such such platforms as well. That's a common platform Where we have here something come on as a common platform And we just we just somehow connect many many banks on many countries And Somehow uh, why are these why it's come on platform? Of course, that's the most complex and it requires probably the most I would say research and development and and investigation as well But basically that's what that's what blockchain cross-border systems target It's just because blockchain seems to be like like a natural way of of realizing such platforms Uh On the next slide, uh, I have just two lists. Um, so first, uh, I have the I have basically a map on the on the different, um, cbdc, uh, central bank digital, uh, currency projects Throughout the words, uh from from hyper ledger So i'm not quite sure if I let me just take a look if I find this Uh, I just try it to I'm not quite sure if I find it but but Just uh, give me a second to find back. So if I just click on that, that's a very that's a very good ebook from from hyper ledger, uh, it lists practically It's the pure like, I don't know a couple of Couple of months ago and it lists pretty much the uh, the possible central bank digital currency initiatives that that have that have hyper ledger as as a technology So that's that's like the hyper ledger marketing actually, uh, and then, uh, perhaps it's important to note Usually, I mean these are cbdc projects. Um, they are they are not necessary cross-border wholesale cbdc projects In this book, uh, there are there are wholesale cbdc's that that don't want to realize like, uh, like like like cross-border, uh, use cases and there are retail cbdc projects as well But the point is, uh, we got like many technologies, uh, or many platforms that appear in these cbdc projects, uh, so like, uh, especially in wholesale wholesale and cross-border wholesale use cases We got basic platforms as hyper ledger bezu hyper ledger fabric and sometimes iro Um, can be found as well. Uh, perhaps it's just just mentioning one thing Uh, having having or speaking of like like wholesale cbdc projects uh Blockchain is blockchain might be a viable uh technology option So if you speak of like like retail cbdc use case Then the blockchain user usually is like, you know, difficult, uh, because in a in a normal retail use case You might as well have like a couple of millions of transactions transactions each day Which which might be Which might be just just much for a standard, uh, blockchain platform But if we speak of like like cross-border or wholesale cbdc projects Then then hyper ledger bezu and fabric are are viable platforms as well So then then then then as far as I know like bezu has like four or five hundred transactions per per sec, uh, fabric can have like like thousands But that's enough for a wholesale or for a for a for a cross-border cross-border wholesale wholesale project And we got of course like cacti. That's like an interoperability solution firefly That's like an application building platform and then I or I I don't want which is uh, which is like, uh, which is like, uh, which is like a blockchain platform itself as well And then on the left side, I just I just mentioned a couple of like wholesale cross-border cbdc projects Um, there were many initiatives actually these were like POC's and and pilots So as far as I know not many went still not many went many went live But probably uh, it is planned that for instance, like ambridge, uh, goes live like a couple of years in a couple of years So then again, these these were like a POC's and pilots, but I mean this cbdc Topic is is is anyway something which is which is being being developed very slowly For for several reasons. So it's it's not the not the classical our crypto life cycle So we got like ambridge, uh, ambridge, uh Used practically at at at the first hyper ledger Bezu it further developed Bezu As far as I know at the moment, uh, and then it's it's like from the BIS from Hong Kong Monetary Authority Uh, from central bank of united arab Emirates Central bank of thailand and people bank of china Experimented with with like ambridge project. We got like project done bar Project done bar is use the technologies are free corda It was it was a it was a wholesale cross-border cbd senior shift if from BIS, of course I mean BIS involved in many of these projects From from australia malaysia Singapore and and perhaps uh, south Africa as far as I remember Then we got a project neighbor that's on hyper ledger fabric It's uh, it's an initiative by by by Saudi Arabia and and united arab Emirates Then we got slide jasper Um, it's as far as I know that wasn't a cross-border initiative just the whole cbdc And with like a kamada Uh, was actually the major major player. Then we got like jura project jura. Uh, that was that was on corda our free corda There's an initiative by BIS, uh by by by bank of france And swiss national bank as well Then we got like stella project stella. That's again, that's that's as far as I know it's some fabric Or it was an experimentation on fabric It was uh, it was it was a prototype by by the european central bank and and japanese and and bank of japan japan as well And actually we got I mean, this is a non-complete list of of like such holes across border initiatives These were the classical ones. Uh, we got some some non classical ones as as well So for instance like gp morgan onyx platform is is rather a general tokenization framework It it wasn't necessarily meant by by realizing, uh cross border use use cases or only cross border use cases It it can have like Perhaps even stable coins as well bank deposit tokens as well But as far as I know there's like ongoing brainstorming and discussion How that can be used like in, um cross border, um use cases as well Then we got like project icebreaker. It's again, uh, it's um, it's not the wholesale Then we have like project marriage by uh, singapore france and switzerland And it it goes a little bit Beyond cross border use cases. So the only use case is not just not just having payment cross border But like but like giving our regulated this defy decentralized finance services cross border And then we got many many ideas. So as far as I know like the like the the the european central bank with the with the digital euro, um Then they just they just initiated a couple of cross border projects as well I mean the digital euro itself is uh is cross border, but that's not blockchain But they they just initiated some some some some cross border project prototypes as well So this is just the general road map. Uh, I just pick practically three Uh, three different projects. Uh, it's like ambry javer and ice be ice breaker Just just having one and one slide of them on them, uh So perhaps it's i'm just i'm just having this one beautiful slide If I manage this Just give me a second Not this one, but I hope I didn't just give me a second So I made a beautiful picture just to just to see basically, uh, how things work And I hope I still have it Um, so so what we think of practically with these use cases is that uh, like we have many jurisdiction In most of these prototypes, we had like two three or four different countries different jurisdictions and these uh cross border use cases or dlt platforms Try to connect, uh practically these countries So in this example, I get just three countries. Uh, that's like country one That's like country two and that's like country three in each country. We have a central bank and b and central bank b and central bank c And two and three and here we got one two three as well and here we got one two three as well So most of these projects, uh, try to somehow deliver one common dlt platform one common oblock chain platform For for realizing all of these cross border payments and then there are many use cases So usually there are like use cases transferring between one commercial bank domestically between Then transferring between two central banks Internationally and between transferring two commercial banks internationally So these are the typical use cases and again and again. So like in project labor We just just two participants in enbridge. We have like like like four participants If i'm not mistaken and then in ice breaker we have three participants So that's like the major idea and we got of course kind of a blockchain in the middle On which we got the tokenization which is kind of different fungible tokens Usually version of or regulated versions of of of erc20 and we got something as well which which might be In exchange for instance So usually it looks that way that you know, I mean this country issues one one Token on the blockchain, which is like one central bank digital currency And the second one issues one issues another one and the third one issues a third one And this should be uh interoper interoperable as well From a business perspective. So they are interoperable on the technical side Because we got a common blockchain. Uh, they are interoperability from the semantics side as well Because they are all all the same fungible tokens like version of erc20 But they should be interoperable in the business on the business side as well So like like question is how we can exchange One one central bank digital currency to another one one token to another one So that's the usual And again, we get like ambridge ambridge is one project. It's uh, it's a whole circles border cbdc The funding banks was people bank of china Monetary authority of hong kong central bank of Central bank of the arab Emirates And of course vis and then these these were the active members There were like 25 observed members as well The first version was or the second version was hyper ledger bezu at the moment. They have like something which is called an ambridge ledger As far as I know, it's either either bezu or forum was further developed But the second phase was was was clearly on hyper ledger bezu It has payment versus payment Different use cases it has foreign exchange and liquidity saving mechanisms as well. It has advanced privacy concepts and it has I'm happy to somehow the idea How how basically such a platform might have been in cross-border payment So in the classical world we got like one pair We have like like the pairs bank and we can have like many correspondent banks in the middle And at the end we have like the pays bank and we have the pays So that's the the classical flow of of an international of a cross-border payment With ambridge, uh, we just get the two banks So we have the payers bank and we have the pays bank and the idea is everything is Everything which Which different from these two banks? Our responsibility is realized by the by the ambridge itself So like for instance classical key by c ml and customer relations are maintained by these banks So that's that's somehow the idea For ambridge and for for other initiatives as well So the next project is is project abour That's like a cross-border cbdc project We get like funding banks Saudi Arabia and united arab Emirates It's interesting because it's on hyper ledger fabric So again, it has like strong correlation with with like hyper ledger With the hyper ledger stack. It has many use cases. It's like cross-border settlement between central banks Again domestic settlement between commercial banks cross-border settlement between commercial banks It has a dual currency systems and then there's no like Like a foreign exchange, which is dynamic. They have they have just a static exchange rate Then future there are some delivery versus payment Investigations and it is integrated with with rtgs as well Uh, perhaps it's just just having one one challenges of or mentioning one challenge realizing um The blockchain That that's basically privacy So classical dlt system a classical blockchain system Is designed in a way that that everybody sees everything practically But this is certainly not very optimal For uh for such a cross-border use case. So usually the the privacy the privacy Uh, requirements are can be challenging in such use cases Usually we got the we got a requirement that if two commercial banks Transact Then only these two banks should see the transaction for instance if two uh international commercial bank uh transact then Then only the commercial banks and perhaps the central banks should see the transaction If a central bank issues new cbdc, uh central bank digital currency to a commercial bank Then then only this commercial bank should basically see that uh that transaction Nobody should see basically the accounts. So how how much money A person have On an account that's like an information that it shouldn't be visible even for central banks So again, um, if we just consider of of course, I mean I mean blockchains having like like different privacy solutions as well But if we just consider that blockchain This is everything, uh, then then having these use cases from a privacy perspective Yeah, it's it's just sometimes getting pretty complicated. So you like project labor There were many private data collections on on hyper ledger fabric. That's what you that were used So there were like, uh, like like two, uh, two participants private data collections between commercial banks Including central banks as well There were like, uh, privacy data private data collections having the commerce having one commercial bank and the central bank And there was like one one big channel Uh, basically so sorry that these were not private data collection these were channels And then that was one big channel that included That somehow prevented practically double spending between between channels. Um, so it was pretty tricky One more project is a projectize breaker That's uh, that's an initiative from norway sweden and and israel And it's basically, uh, that's uh, that's a retail use case. So it's it's not a wholesale cross border But the retail cross border pilot or or or or proof of concept uh, what's interesting is that The idea is uh, that basically Each country has its own payment system Uh, which which in our use case basically, uh, like like sweden sweden had like, uh, our free corda Hyper ledger bezu was used by norway and quorum as a platform was used by by israel And they were connected, uh, with uh, with the hub and spoke model Uh, with atomic cross chain payments and htsc hash timelock contracts So basically this hub in the middle, uh, guaranteed basically the atomic settlements, uh, between uh, between these systems Uh, which is which is a very innovative model Uh, this atomic settlement and and hub in the middle that integrated, uh, like like like foreign exchange as well So basically there were like, uh, providers in the model That traded, uh, these currencies, uh, and then basically during the the atomic cross chain swap during the hot htsc It was possible, uh, not just to to have like one atomic transaction But to change one currency to another one. Um, even with like having a bridge currency in the middle as well So that's project icebreaker Uh, just just one table for the end. Uh, it's like a little bit like comparison of different cross-border cbdc projects You know, of course, it's a little bit like marketing oriented Uh, but like if you just compare them and then just, uh Take a look on the different inefficiencies like transaction transparency operation operating hours Interoperability transaction cost infrastructure challenges and payment models Then we can usually say that yeah, so so blockchain has the promise, uh, and dlt has the promise of of of doing something better for sure Uh, so like a trans transaction transparency is is better practically overall Then for instance from in uh, then in correspondent banking Of course, this is a little bit like tricky because, uh, you know, I mean Of course, it's possible to do a very good transparency with blockchain But like privacy requirements are usually challenging So, I mean if we say that privacy then perhaps the situation is not so good Uh operating hours while I mean, I mean all of these systems or almost all of these systems are Are practically 724. Uh, so they don't They don't suffer basically like the problems of limited operating hours Supposing that you know, I mean, I mean, there's there's like people who can operate a blockchain in in, uh In this in this time period Uh interoperability is is supposed to be higher overall Transaction cost is supposed to be supposed to be lower Well for infrastructure challenges Um, yeah, I mean for the first round, I mean it's blockchain. So so blockchain again It's not necessarily the easiest to to operate and to deliver as an infrastructure But it's one infrastructure. So it's one universe universe an infrastructure There's no like such situation that each note having like something totally different So usually infrastructure challenges, um are considered to be uh moderate And then for payment model. So again, these are the uh hub and spoke common platform or single or dwellings So most of these platforms try to do something which is a common platform, which is one common platform That's that's what blockchain actually meant to do basically there are some exceptions like hub and spoke models and so So that's my last slide and so as a conclusion and further challenges Uh, so I would conclude in a way that so these DLT based cross-border payments seem seem to solve many inefficiencies of classical payment systems Again, these projects are still pretty much in I mean prototyping and proof of concepts There's just one one interesting idea which is which is still not really Uh, brainstorm very much. Uh, there might even be use case that like That like actually not cross-border cbdc, but something which is like tokenized deposit is used in cross-border use cases Uh, the tokenized deposit is just more tricky Because with our tokenized deposits, I mean it's simple to issue a token on a on a blockchain in the name of a bank, but the problem is to Uh, to have the exact liability of the bank for this token That's like more tricky, uh, and it's I would say it's perhaps it's just tricky to solve it in a domestic use case This as well, uh, it's probably more tricky to solve it in an international use case But I'm sure there will be initiatives, uh for this one as well Uh Blockchain can provide near real-time cross-border payment So I mean transaction should actually Be executed in a couple of seconds, uh independently of of the of the of the underlying blockchain platform It is estimated that the that the reduction reduction and transition cost might be like 50-80 percent Of course, uh, these systems are our 724, uh systems Then it can realize kind of a direct interbank payment without without intermediaries I mean, I mean blockchain itself is an intermediary. That's that's for sure but otherwise no further intermediaries are to be found and then heavily investigated it's it's like, you know, automatic foreign exchange by smart contracts sometimes even Like like regulated defy on top, uh, such a platforms But nevertheless, there are still challenges. So I would say, uh, There are I have more like a technical, uh, expert. So I focus always on the technical challenges So I would say these use cases are not not typical DLT use cases And it's again, it's it's because there are like many different privacy requirements Who should see what information? And of course like enterprise blockchain solutions provide like solutions for that So then in fabric light we get channels. We get private data collections But if there's like too many such requirements, then the then the whole system is is getting to be like I mean, I mean more I mean too complex and and somehow Perhaps, uh, somehow not the best and and of course not not like a native blockchain idea Perhaps it's it's it's it's worth mentioning that some of the challenges were actually not were out of the scope of these pilots So for instance governance was usually out of the scope Uh, then usually like like different regulatory compliance, uh, based on multiplied judicious The they were partly out of the scope. So they might cause problems Nevertheless, like different on Boeing key of key yc and dml processes I mean Most scenarios, uh, these are actually done by by the banks itself by commercial banks But nevertheless they they can cause problems I mean, again, these are like the technical challenges. So private season issue Scalability is not so much an issue in these use cases. I would say that's not retail And then again things are getting more complicated is if these use cases are getting complicated with like, uh having foreign exchange, uh with with uh with automated market making, uh, for instance, or having, uh, like kind of regulated Dexys or kind of regulated defy protocols on top of these use cases or like, uh, payment versus payment payment versus deliver use cases Because then, you know, I mean, I mean privacy, uh, requirements Considering these use cases might actually explode exponentially. Uh, so that's not very practical So that was my presentation. Uh, it was not taking so fast or I just couldn't manage so fast as I wanted. So I I apologize for that But I would say, uh, we still got like like five minutes for for questions and answers Thanks, uh, Daniel And I would say that Now it's a time to ask questions if you You want to please do Raise your hand or start asking questions I'm just checking the chat as well. So if you uh, if you just just chat me then feel feel free to ask Ask questions in the chat as well or just time yourself and and go ahead I think most people are still absorbing a lot of the lot of the presentation that has taken place It's a it's a vast topic as you know So I'm going to give A minute more for others Otherwise, I will jump into the question Mark, of course, Mark Liberati My good friend Is asking Is he asking questions or he's just That yes Yeah, um, I don't know if you can hear me. I was just uh, no, I was just wanted to really thank you for the Excellent overview. Um, but also just really um Thinking around You know, all of these projects are still between Between various ecosystems Um, what has been the thinking and creating sort of a at an international level? Uh, a mechanism so that uh, there could be interoperability Going through an international um Layer if you will To support interoperability in a more global coordinated manner over. Thank you Yeah, that's that's a that's a very good question. Uh, so that that would be logical. Uh, that would be logical Uh, and then I think that's the reason why why for instance b is is involved in many of these projects Because uh, because that's you know, that's that's pretty international Has connections with with many central banks Uh, but I don't know I don't know if there's any such initiative at the moment. Uh, so it's like You know, it should be controlled by by imf for instance Or I don't know which would be like, you know, the best best controlling body body for for such an initiative Uh, that that would be the most logical. It's just you know having Having like one one big platform which is used like, you know, if it is used like by the by the 40% of the world or 50% that would be a big a big advantage. Uh But yeah I mean I mean the world is sometimes not logical I would say so so I don't know about such such an initiative But I but I totally agree that that would be that would be the best way. Yeah Uh to add to that You know that Swift is the platform At least on this side of the world, there are other platforms being born On other in other jurisdictions or countries That want to not be under You know dependent on swift which Can be controlled by the us or other forces Um, so for a truly insensible cross-border payments The chinese are coming up with some kind of payment service The indians have the upi which is uh transferring to other countries, especially in the gulf So there is a certain amount of Standardization there Then a swift itself uh had to reform Its message format Mostly I believe under two conditions. One is the challenges of blockchain itself And as money often says, uh, you know the cdm Is a blockchain in miniature Because it links the different The different transaction or the Chaining there is a chaining aspect which is based on cryptography And there is also a Another piece which is encryption now. This is also started influencing 10 0 1022 the global sort of meta standard that swift operates under so blockchain has influenced these platforms and swift is Having you know had problems because of because of Because of things getting Because of fraud because of cyber attacks because of ways in which Money could be transferred You know they could The fraudsters could jump on top of swift and cause Spurious money transfers That I think has been addressed in 10 0022 But Both the chaining aspect the signature aspect and the Encryption aspect We're optional. I don't know whether they They tighten down on that But I'm sure the Chinese and the indian model will Also work. So there are going to be Different sort of standards and actual infrastructure that cross cross border And that are very active Actively looked at so in a sense. They are not exactly Worldwide, but they encompass more than one country, so Maybe that's the right way to do this and then you can have crossing between these big systems Then you get to a worldwide system So I think The time has run out Unless anybody else has anything particular To ask we should Say that this has been a very good Very good presentation. Thanks to Daniel And thanks to all all of you who attended So yeah, thanks. Thanks for the opportunity and Thanks Yes Thank you and Goodbye for now One month from now. We'll have another presentation. Thank you