Sign New Mexico Banking Arbitration Agreement Mobile

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[Music] good afternoon and welcome to this webinar on money and the democratization of payments as the Sir John luboc tearing bank Ehlo and head of the banking and finance Institute let me thank you all our highly Steam alumni from around the world first for having chosen Queen Mary University of London and Cece Ellis as a place to study today one of your alma mater if not your alma mater and also for enthusiastically endorsing our event today through your registration I will commence by saying a few words about Cece LS and the speaker professor Sir William Blair the Center for commercial Louis Studies celebrates this month of June its 40th anniversary CC LS was established by professors Leroy good in 1980 to create an environment where practising commercial lawyers and those from academia government and social society could civil society could meet and exchange ideas let me now briefly introduce our very distinguished speaker today which is known to many of you since he has taught a few of you in his lectures at CCS Sir William Blair is professor of finance and law and ethics at C CLS a prior to join in Queen Mary he serves as a High Court judge in England and Wales for nearly 10 years and was the church in charge of the commercial core from 2016 till he retired from the court since 2017 he rejoined through Maryland buildings as an associate member having previously practiced as a commercial QC before his appointment to the he failed to establish the specialist financial least understanding international financial international fallen of commercial course he is also the chairman of ma kamila the monetary Committee of the International Law Association what I have a pleasure and the privilege of also being a member he has been president of the Board of Appeals of the European Supervisory authorities till 2020 in 2018 he was appointed chair of the Bank of England's enforcement decision-making committee he also sits on as an arbitrator and he chairs the law and ethics in finance project which is an informal group concerned with raising the standards in the financial sector his current research his interest many of them are aligned with my own include FinTech financial crime and Financial Inclusion themes which will feature in the presentation of today he has also an interest in the UN sustainable development goals and he has served on missions from the World Bank the IMF and the Asian Development Bank he has a very long and illustrious career but we are here today to listen to him and not to listen to his many treatments so before I pass the word on to him let me say a few logistical issues or words about the webinar the session was just started now at 1 o'clock 3 minutes ago we last until 1:00 10:10 past 1:00 UK time after bills presentation after Sir William Blair's presentation I will make a very brief commentary and then I will open the floor to Q&A questions and answers as I say in every webinar in which I take part recently or in the last few weeks we now live in zoom land and all of us have become familiar with the chatroom feature that allows you to put questions in this case to Professor Blair questions which I will moderate and try to get to him as many as possible during the time that we have been allocated for this webinar and with that I will pass the word on to Sir William Blair asking him to share with us the screen I know Carlos kavadi will be projecting the slides that a Sir William Blair will be talking to and will be given the appropriate fangs as give us so so bill my friend Sir William Blair our distinguished speaker the floor is all yours well Rosa thank you very much and it's a real honor and a real pleasure to have the opportunity to give this lecture on the occasion of the 40th anniversary of CC LS do you mind if I begin with a very practical question which is quite important on these occasions and that is second can you hear me and can you see me and a nod will be sufficient if you can you can maybe speak a little higher bill maybe by putting that closer to you that's right yes so just one point if I made to correct the seminar wasn't of course end at ten minutes past two not ten minutes past one and my remarks will take about half an hour but before I begin let me just say this that my relationship with the Center for commercial Studies does go back pretty much to his foundation and some of you I know on this lecture will remember the extraordinary work that was done by Professor so Roy good which we all benefit from to this day I'm very proud of my relationship with the center and I'm very proud of the continuing work that is doing when I saw the list of people who are attending the lecture I was really pleased to see names that I recognized including names of past and present students let me also say this that I know that some of you perhaps in London perhaps in different countries around the world we'll be studying it at the moment in these unusual conditions of lockdown and trying to make things work remotely and you've you've done a fantastic job as a student body we're very very proud of you and I think we're all just beginning to learn some of the young issues this endemic is bringing with us but my remarks today are on a more narrow subject of course and that is the law of money and there will be some slides and let me thank Clara Bob yani who kindly prepared these slides but let me as a as a speaker put some questions to you and ask you to bear these in mind as we go through over the next half hour or so so what do we mean by money is it different from payment we all know that money's revolutionize the global economy and that the pace of change is speeding up but when it comes to money does that fundamentally change everything or is it simply reflected in the way that we make payments money has always been a source of power are we about to see that reordered in the 21st century and what are the consequences of money and particularly payments becoming a source of information we leave a lifelong trail behind us which never existed in the past in China at the time of Lunar New Year red packets containing lucky money are traditionally handed out to friends and family can such a venerable practice going back many many centuries be transformed by technology certainly it can in recent years it's been estimated that over 750 million people sent out red packets in digital form using WeChat which is currently the most popular messaging app in China New Year 2020 has been disfigured by the corona virus pandemic surely one of the most extraordinary events in contemporary history what effects will the pandemic have in the world of money could we see a privatized global currency or will the effect be to consolidate money back into international silos at present money creation is happening on an unprecedented scale with quantitative easing and in some countries including the UK monetary financing in other words direct financing by the of the government by way of overdraft extended by the central bank does this mean that money is losing its nature as such but I would like to start at a more human level red packets tell us about an important aspect of money apart from its economic role money is a social institution and let me quote some words for words from the IMF economists beware payments are not just an act of extinguishing a debt they are an exchange an interaction between people a fundamentally social experience if two people use the same payment method a third is more likely to join and they went on to say and it's not usual for International Money Monetary Fund's to put things quite this way but money the payments can be more fun in emoney since messages and photos can't be said with a credit card payment as well as the obvious drivers of the payments revolution therefore such as convenience and low transaction costs another is the social aspect from red packets to getting on the metro to buying a cup of coffee payment by phone is increasingly part of the experience bill splitting apps allow people to eat as a group without arguing about the bill afterwards and the same technology is available for other social activities such as flat sharing and travelling because it is so widely available to people in the developing as much as the developed world the payments revolution can be seen as a kind of democratization of money empowering anyone with access to mobile technology at the same time the flooded data attached to new forms of payments gives rise to issues as to protection as use and the possibility of harm to humans which has never been associated with money in the same way before the massive increase in connectivity which underpins the payments revolution also leads to concerns that we could be entering into the age of surveillance let me turn to money and its categorization characteristically money in contemporary times is fiat money in other words money that is backed by the resources of a state Fiat is a Latin word roughly translated as let it be done we tend to take fiat money for granted but his dominance is surprisingly recent right up to 1971 the US dollar was backed by gold under the Bretton Woods system agreed in 1944 the fact that money was issued in paper banknotes tended to obscure the fact that the metallic nature of currency going back to ancient times in Mesopotamia continued in the form of the gold standard Bretton Woods worked for a time not least because by the end of the Second World War the United States held about three-quarters of the world's official gold reserves but a run on gold eventually put an end to the system so when we talk about fiat money we're talking about banknotes with some exceptions the eurozone being one national central banks are the issuers of fiat money for a long time however bank notes have constituted a declining part of the total money in circulation during the 19th century the rise of commercial banks and saving institutions with a reliable and accessible statements of account and the development of reliable payment systems such as cheque clearing resulted in the bulk of money consisting of entries and bank accounts so some statistics it has been estimated that seventieth at 97% of all circulating money is bank money and now this is an electronic form of course reflecting the way in which accounts are kept the decline of cash in favor of e money in one form or another is very marked in the UK cash as a percentage of all payments was down by 60% in 2008 down to 28% in 2018 and is projected to be 9 percent by 2028 and those statistics leave out the effect of the pandemic perhaps a more revealing statistic is that during 2018 there were 5.4 million consumers who almost never used cash at all instead relying on cards and other payment methods to manage their spending this was an increase from 3.4 million consumers the previous year these trends are likely to be accentuated by the pandemic similarly global banks like mon-sol and Starling and apps like revel revolute which simplify payments in foreign currency are making intro inroads into the traditional banks consumer basis button here's an important point it seems unlikely the physical cash will ever disappear and there are policy reasons for avoiding that the risk of systems failure is an obvious one another taking a statistics from the UK again around 12% of adults in the UK result from so-called digital exclusion I think it's good to say this in an academic context we shouldn't assume that this is a legacy problem because the technology changes what is routine for millet Millennials now may look different as their own age profile changes this will be one of the challenges of technology but however sophisticated these payment systems have become so far they have not changed the concept of money since they deal in fiat money so let me now turn to payment systems and I want to begin with China in its highly developed smart phone payment system the linkage of to the financial system of the two main players that is a leap a and WeChat pay is typically through bank accounts credit card usage is much less than in the West however there is a significant difference between these providers and for example Visa and MasterCard in the West these have their roots in the banking system but a leap a and WeChat pay come from technology companies Alibaba and 10 cent respectively this blurring of the boundaries between technology and finance looks like becoming a global trend with structural implications for the whole global financial services industry both Alipay and WeChat they now have systems that allow customers to make payments in retail stores by simply scanning their faces bypassing even the phone given the growing pain pace of facial recognition how long will it realistically be before the human face takes the place of cash card or phone the risks here not principally monetary but go to data protection I entity theft illicit data you linkages and other potential abuses despite these risks experienced suggests that the public tends to look first to convenience and of course the technology now has an impetus of its own now I'm going to turn to the development of private currencies and let me begin by saying this that when it comes to currency some people maintain that payment in fiat currency is the best and perhaps the only feasible medium to fulfill the Clee the three classic functions of money and for those of you who've studied the the economics of money the law and economics agree about this these three classic functions are money as a unit of account money is a store of value and money as a means of exchange or payment but is this belief correct one person who would not share it is Satoshi in nakatome oh the story is very well known and Nakamoto identified what he if it is he since assuit him described as the inherent weakness of the home quoting trust based model reliant on financial institutions serving as trusted third parties to process electronic payments his solution which was a extraordinarily ingenious one was an electronic payment system based on cryptographic proof instead of trust the software I think as many people here will know well encrypts each transaction but a public record of every coins movement is published across the entire network whereas in a conventional system there is a single ledger Bitcoin uses an open decentralized ledger that records transactions in a permanent way without needing third party authentication this has of course become known as distributed ledger technology or more colloquially blockchain I want to turn next to the treatment of money in the law in keeping with its character as a system developed by judges over time common law has attempted to avoid overarching definitions of money considering questions as to the nature of money in context that context been particularly in relation to payment there is an exception and that is the Uniform Commercial Code of the United States and that adopt sir a fear theory providing that money means that which is issued as a state as such however it's worth bearing in mind that the UCC was drafted in the early 50s and of course the technology surrounding money that we're familiar with today and was partly the subject of this lecture didn't exist at that time so some cases and the most famous case of all is the oldest case of all so far as the common law is concerned and that arises out of the debasement in the time of Queen Elizabeth the first that is not a second of the silver coins of the Irish currency in connection with the war that she was waging in Ireland at the beginning of the 17th century deciding against an English merchant in 1604 the court decided that he had to accept payment in the debased currency because it was the lawful currency in the place of payment which was Ireland so you see immediately that this case distinguished between the intrinsic value of the silver currency and its extrinsic value by reference to its denomination this is the principle of monetary Norman nominalism the conclusion may seem obvious to us but it cannot have been obvious at the time when money was measured by reference to precious metals however that case so far as the common law is concerned laid the foundations for what we have today which is a monetary econo y with the emergence of banknotes in the 18th century a development in some ways more profound conceptually than that of e money the courts had to decide on the legal status of these banknotes a Bank of England banknote being sent through the mail in payment of a debt was stolen in a stagecoach robbery and it ended up in the hands of an innkeeper who had taken it without notice of the robbery try to apply our legal understanding to the issues that this raised if someone steals my car and you buy it from a thief I'm entitled to have it back even if you bought it in good faith the court had to decide whether this would apply where a person was robbed or de frauded of the banknote and this raises a basic question as to the nature of money citing the needs of Commerce the court found for the innkeeper holding banknotes is negotiable so that property passes to someone taking them for value in good faith these are old cases but they give an indication of how new money like instruments would be treated in the law now if the evidence establishes that something is treated as money the courts should be prepared to accept it as money applying the same principle other cases show how money can cease to be such an example is the treatment of collectors items such as bank notes from vanished crazy regimes such as Zara's Russia in such cases of course value and value and denomination are decoupled entirely and they are no longer money so those are some of the legal principles that have been established over time and with those in mind how do new form of ins of instruments measure up so far as the law is concerned crypto assets are not limited to crypto currencies but have had a fairly modest uptake in for example chair issues however crypto currencies are by far the most common of this type of asset the fundamental reason why Bitcoin and most similar instruments are unlikely at present to be treated as money let alone a private global currency is first that the technology is presently slow and clunky prepared with conventional payment systems and second that the assets are too volatile to have a widespread use as a means of payments so although Nakamoto set out to create an alternative payment system what was in fact were created in Bitcoin was a highly volatile and speculative investment what is the position as regards crypto as property in 2015 a case arising out of the collapse of Maldek Cox exchange the Tokyo District Court held that Bitcoin lacked the necessary corporeality to be considered as property under the Civil Code and that finding by the Tokyo Court may resonate with some of the and civil lawyers who are with us on this lecture however so far as the common law is concerned it's likely that crypto assets will be treated as property despite some potentially difficult questions relating to bankruptcy beneficial ownership and the ledger itself what the leaf of legal status that ledger has this is the conclusion reached in Singapore in a case called b2c to the coin in 2019 the same conclusion has been reached in November 2000 and 19 by the UK jurisdiction task force and applied by the London Commercial Court in granting an injunction against persons unknown to whom the crypto which was Bitcoin had been transferred by payment by wave payment and here's a point about this case that is worth mentioning the payment was made by an insurance company by way of ransom to get its IT systems freed up and that is certainly a a sign of the kind of times in which we're going to have to look at these legal questions that were addressed in the past the next issue I want to turn to is Facebook's Libre a lot of you will have come across this and many of you will know quite a lot about it the coin called Libre is still at the planning stage and I think as we all know has faced major opposition from the authorities in certain key countries in short it created a Ferrari there are two main characteristics of lever as Libra as originally conceived which make it so far unique first and most important the key attribute is the messaging system rather than the coin and again some statistics it's been reported that the latest messaging app shows that whatsapp which of course is owned by Facebook has 1.6 billion users worldwide and facebook Messenger has 1.3 billion compare that with WeChat with about 1 billion mainly in China just over the last few days Facebook announced a whatsapp payment figure payment feature in Brazil it's seeming likely that Mexico Indonesia and India will follow soon if that's successful and by the way there's no reason to suppose that it won't be and here's the point I think further the new age that we need to think about carefully and it's Mark Zuckerberg whose statement that sending money should be as easy as sharing photos and just think for a moment what that means to the many many workers the war the world over who find it sometimes quite difficult to get money back to their families or who end up paying quite a lot of money to transfer services it is an immensely powerful message and it resonates with a global audience which is looking to technology for simple and accessible outcomes the second point and this is equally revolutionary as originally conceived Libre would be backed by a reserve in five major currencies the US dollar euros yen sterling and Swiss francs so you can immediately see that the user is able to pay for and redeem Libre in their own currency but the value of Libre will always be determined by the weighted value of the five currencies so Facebookers emphasize the advantages for financial inclusion as I've just said if that proposal goes ahead in this form then libras stated ambition to become a global currency would be complete and the way would be open for the common law to recognize the currency has money on the principles that I've stated and there's another point here which is important to bear in mind and is this the possibility arises for Libra to be more than a payment system why do I say that this is because users may prefer the prefer to leave the funds in a more secure environment than their own financial systems now I mentioned the the opposition that Libra gave rise to and in April 2020 without abandoning the original idea Facebook produced a variation of it this would see the launch of a series of different digital coins each backed by a different feared currency coins of this kind are sometimes described as stable coins reason because they lacked the kind of volatility the volatility that Bitcoin has the value of which is depended entirely bide my supply and demand despite that many legitimate concerns about Libra around financial stability and data misuse and the obvious need for comprehensive regulation the objections to Libra probably stem largely from the implications of this project the US dollar is presently close to a global currency in both its bank and physical cash flow and is the number-one reserve currency of course and with that as we all know comes immense economic and geopolitical soft power but for any country not just the united states the possibility of the state losing its present de facto monopoly on currency issuance to a Fang is not a great prospect nevertheless it has to be accepted that the record of states in managing their currencies is patchy oh yeah of course there are many examples the hype the hyperinflation in Zimbabwe resulted in the state currency being effectively demonetised between 2019 with the US dollar in the South African rant becoming legal tender but here's the point Libre has now been invented the blue paid the blue print is there the cat is out of the bag it's been demonstrated that a private global currency is attainable by an entity with sufficient sufficient technological firepower and my view is that that cat will be difficult to get back into the bag without addressing the Financial Inclusion ideals that libres seeks to ameliorate it may be impossible now I want to turn to central bank digital currencies this is another really important part of the military's scene as its developing at this time very much at this time so given our day to day experiences with cashless payments it may seem counterintuitive that central banks are only now considering issuing digital currencies but digital currency in this context has a specific meaning applying to money to which business or the public generally and not just the banking system has direct access access in other words just as in the case of bank notes a number of central banks have been considering if chewing digital currencies progress has been slow part of the reason for this is that national payment systems or are already perceived to work adequately or well the thinking of payment systems in many parts of the world including here in the UK if a central bank issues a digital currency then in principle everyone and every business could not only make payments in electronic central bank money but could store value in electronic central bank money the IMF has pointed out that offering fully fledged CB DC would require a central bank to be active along several steps of the payment chain potentially including it facing with customers building front-end wallets maintaining technology monitoring transactions and very important given the experience with Bitcoin being responsible for anti money laundering the People's Bank of China which is China's central bank has been at the forefront of these developments it has been reported that there have been trials of erm be digital yuan in various cities a professor of PK a professor at pika use reported as commenting although there is little change from the perspective of user use from the perspective of central bank supervision future forms of finance payment business and social governance etc this is the biggest thing ever besides these factors China sees its digital currency as safeguarding its currency sovereignty and promoting the RMB beyond its borders the emphasis is on self-reliance countering the financial and technical dominance of the US and ultimately seeing the RMB as a principal global reserve currency let me now move on to another idea which I'm going to touch on very quickly it was made by Mark Carney in a governor of the Bank of England at the time in a speech in 2019 and what he was basically saying is that all the digital currencies should be brought together in a sympathetic of currency and is quite striking the language he used he said the purpose would be to dampen the domineering influence of the US dollar as the predominant reserve currency on the influence on global trade and that isn't referenced the fact that the vast majority of contracts whether they're trade contracts or construction contracts or financial contracts globally had denominated and perhaps not so much financial contrast but the others denominated in the US dollar will that happen well I think the slide answers that question not realistically now and there's the issue of capital controls in China as well so let me now reach my conclusion fast money has always been political the immense economic and geopolitical soft power that goes with the reserve currency status of the US dollar does not have a precedent in history not even sterling at its height in my view the crown currently doesn't seem unduly threatened but there are signs that that hegemony may be fraying some other points that I made earlier whilst money has always been a social phenomenon the technology is now powerfully amplifying this in ways that has never happened before as I put it from red packets they're getting on the metro to buying a cup of coffee payment by phone or face increasingly becomes part of the experience mobile technology has produced what I've called the democratization of money and this is happening worldwide a technological generation has effectively been jumped in many parts of the world Kenya comes to mind with enormous potential gains this has been immensely speeded up by the 2020 pandemic the monetary creation that is happening in a number of countries on an unprecedented scale may dilute money in the sense of debasing the coinage as used to happen of old but it will not change the nature of money to the question will there be a global currency the answer may be not yet but it would be rash to predict what the position may be in a few years time and then this is how I'd like to close to all the technological benefits there is a more problematic side will the many benefits that the payments revolution can bring be a marker on the road to the surveillance society and that in the end depends on society's choices and those choices cannot and should not be ignored thank you very much for listening to me a thank you very much bill for these extremely insightful and interesting presentation and I will as I said at the beginning of the webinar I will open the Q&A after I say first a few comments of my own and I have seen that in the chat room our alumni for many students who now have very distinguished positions in many areas relating to the broad spectrum of FinTech they have been active asking questions either privately or to them or to all to which is in this case to you I'd like first just to make three very brief comments first on the differences between the common law and the civil law jurisdictions when it comes to the definition and treatment of money since many of our students come from a variety of some kamalo and some civil law and that's a very well point in the article which accompanies a presentation which I will make available to anyone that has listened today clearly points out secondly I'd like to make a couple of comments on the nature of central bank digital currencies and thirdly on the issue that you mentioned towards the end which I know that is dear to you and also to me which is the easy of financial inclusion so as as you point in their presentation and also in the paper the common law approach and the similar approach to the definition of money is different while let's put the UK as a common law jurisdiction since the u.s. in this is idea syncretic as you mention with regard to the Uniform Commercial Code so while in the UK judges have considered legal questions in the context in which they arise and given that such questions as you write in your paper have risen particularly in relation to payments the function of money as a means of payment has has received much attention in these jurisdictions and this commercial pragmatic approach to money like instruments has led some of our colleagues including Simon Gleason which you point out again in your paper to question whether a particular instrument whether a particular instrument is money and not the determination of that should be something that changes over time so the fact that something is not money now does not mean that something will not be money in future in in civil law jurisdictions the the role of the state in the creation of money legs monitor has been always emphasized since this case that you set aside the surveyor loans case man is a creature of the state it is fiat money and it is legal tender and interestingly I would say that of the four functions of money in civil law jurisdictions the function as unit of account and his total volume has received a lot of constitutional attention unit of account because everything from a contract to a government budget you know is always denominated in a unit of account which is in the US the US dollar in the euro area the euro in the UK the pound and and also the the roll off of the store value has been emphasized because of the central bank status and the commitment to price stability which puts a lot of emphasis on the role of public money and the control of inflation which should be associated in order to preserve that value and I mean for example article hundred twenty eight of the Treaty for the functioning of the European Union very much inheriting the civil law approach says that the European Central Bank has disclosed evite to authorize the issue of euro banknotes within the Union and that those notes are the only that will have legal tender within the Union this of course has a great a degree a great series of implications for the advent of crypto currencies or crypto asses or virtual cu rencies but there is one more thing I would point out from these devane's contrasts in a point between civil law and common law jurisdictions and that is that in similar jurisdictions and many scholars come in you know from countries like Germany they have focused a lot of their writings and doctrinal treatment and this can be seen also in the recent judgement of the German Constitutional Court of the fifth of May of 2020 on the public law on the issue and regulation of money by the state while more practically in common law jurisdictions such as the UK you also cited a recent case in Singapore a the emphasis has been on private law and in private law the notion of payment is fundamental we are celebrating today CC LS a long time ago see Roy good define payment as any actor scepter in performance of a monetary obligation so the democratization of payments and the issue of the shadow payments suggests that payment system at about outside the banking system may lead to a different role of the central bank in this regard and that the approach may be different in common law jurisdictions as in civil law jurisdictions in terms of the evolution because this is an evolving subject they I mean for example with regard to payment systems is interesting to note that article 22 of the ECB study has been interpreted rather narrowly and that the European Central Bank has been advocated for a broader interpretation in order to encompass financial market infrastructures and CCP's something which after the global financial crisis is part of what the Bank of England does the supervision of an asset market infrastructures and what the US does in terms of the provision of lender of last resort assistance to FM is a list of atomize so that's why was passed kind of my first comment question and and and to engage also the audience the second is the nature of central and digital currencies bearing in mind that Fiat Manus and evolve in reality is not the crystallized nature is not a crystallized concept and and in a way a sea VDC is important as they are they are not are as a revolutionary idea as the private alternatives such as Bitcoin or Libre have been I mean you write in your paper and I agree that a Nakamoto whether is a hero see we tend to say he but we don't know set out to create an alternative payment system when in fact what he has created is a highly volatile and speculative investment but the original intention was an alternative payment system clearly Libre evolve in the 2019 proposals and in the most recent 2020 of April that julia cited has has thrown a whole new range of issues which are creating a degree of discomfort in the central banking community because after all a when when the collapse of the Bretton Woods arrangement took place a free banking economy is very much following Hayek advocated that we needed also competition in the internal prohibition of currency but in the same way as we had a competitive foreign exchange market what we now needed is competition also in the internal provision of money and guess what that's exactly what private virtual currencies like Libre want to do I I would like to put this comment question and and also to the audience and then my third point is something which is very dear to you and to me and to many in our audience and that is the question one of the greatest challenges of our time is Financial Inclusion and sustainability let's focus today on Financial Inclusion the sustainability is also related to financially inclusive so promoting the financial inclusion weighting widening the access to banking and insurance services both for vulnerable households and to small businesses in developed countries and using financial technology in low and middle income countries like m-pesa in Kenya and I know that some in our audience are dealing with those issues in Kenya my proof actually quite instrumental in a lock in the opportunities for the very poor O'Day and Bank and and this is what we have to see the significance of Libra or a Libra like competitor I mean I have nothing to say that Libra will be it is this alternative that suggests that the world of fiat money is experiment in a fundamental change because civil disease is not a fundamental change it's just a digital manifestation of more fiat money but but you know this this will be perhaps my my my question to you before I open the question today to the general Q&A could could Libra or a Libra like competitor Bill alter fundamentally the world of fiat money and improve Financial Inclusion you mention how remittances by migrant workers or subject to high transfer fees and you know whether a social media company such as Facebook that allows us to transmit pictures and all sorts of things can improves the life of migrant workers and the families of those workers back in their home countries is an open question so with this a question I will open generally the Q&A but I will ask you bill to obviously react to any of my comments thanking you very much for this insightful presentation but perhaps in particular to talk to the issue of financial inclusion which I know already from many questions in the in the in the chatroom privately some of them and some of them publicly I'm getting so thank you bill and if you want to unmute yourself that will be the first question coming opportunity to react well thank you very much Rosa and I agree with what you've said on all three but just very briefly on Financial Inclusion yes it does have very important repercussions we will see shortly whether in Brazil the experiment that I mentioned earlier is successful or not but if you take the point that you make payments really as easy as we we're used to communicating and you're simply adding on a payment to a message then the implications of that are very great but of course it may be that Libra will produce a response it probably is already and it doesn't follow that just because Libra doesn't get off the ground perhaps or doesn't succeed that the impact that this has had wouldn't be beneficial in the long run sorry thank you very much and a I know there was a question of pram katrien so katrien if you want to put you and me to yourself and introduce yourself and ask the question thanks Rosa and thanks very much for the excellent presentation it's very insightful and so I'm a lecturer in banking and finance North Sea CLS so I'm very happy with this event and I'm very keen that you could join as a guest speaker as well and I think your connections that you draw between finance like social media and law obviously are very insightful and thanks to to think about carrying forward and one particular question I wanted to ask you about and so you talked about Libra and Facebook libras and and I was wondering what problems you see from monetary policy perspective with these types of digital money you mentioned specifically so that the original feature of Libra was and that the value was linked to Deuter of the weighted value of five currencies and sort of had a red flag in my in my head from the monetary policy perspective so I wanted to put that question to you and thanks again for the really insightful presentation well thank you very much Catriona and yes I think that one of the reasons for the the the the headwind that Libra has undoubtedly faced has been the very concerns you mentioned concerns as to monetary policy and it is important to take that into account my my feeling I have to say is a somewhat pragmatic one I just asked myself a simple question we've seen technology as a kind of tidal wave there's been very little we can do about it and many people feel threatened in many ways but whether it's good or bad the technology I I believe is going to come through on this and I think the implications for monetary policy something that authorities and countries are gonna have to cope with but I think they will thank you very much a katrien we have a question here from one of our a students who who came to London to do a masters and was actually considering doing a PhD and he's comes from Kenya and it's Joseph G tau and so a if you can give a see CLS events if you can unmute D tau mobile and give him the opportunity to put his question to male and it's lovely to see you and I hope that you know your plans to do the pilot with us remain alive despite they the coronavirus complications so the floor is yours both to introduce yourself and to put the question to Bailey thank you professor last race good to see everyone my name is Guttenberg I finished my LLM in law and economics in 2018 and it was an absolute thrill and good pleasure to study at C CLS I've got one quick question and a comment let me start with a comment on the last round of discussions that saw Blair you you had with Professor Laster on Financial Inclusion I mean most of you will know Kenya's transformational journey on Financial Inclusion there many things to say about it I think the one main point that I want to put across for the benefit of people in this call is what countries like Kenya have quickly realized is often the discussion on Financial Inclusion begins from a quantity perspective obviously for developing and emerging economies it's quite important to get as many people who are not covered by bank accounts who are unable to do basic payments to be included in the form of financial system so the discussion and policies and supports on financial inclusion often begins from a quantity perspective let's cover as many people as possible but quickly that discussion transitions to elements around quality so the quality of that financial inclusion and by that I mean topics that are obviously important from a policy and regulatory perspective like the safety making sure that people are being included in a financial system where safety is guaranteed where confidence is guaranteed where the cost and affordability of financial payment services is good where these trust and obviously on a wider micro and macro prudential elements like email and financial stability so it's it's one learning journey I'm sure many other countries across Africa and emerging economies have seen from a financial inclusion focus on quantity to various elements on quality the quick question I have for the speaker today is very brief I'll I'll give you my own nomenclature around the challenges facing authorities when it comes to FinTech and financial services and possibly on payments so and I call this model around the three P's often the touch point of regulation is usually the provider so regulation is all about place in particular obligations on providers to behave and interact in a particular way in the market or we also place touch points or obligations on products or like payments products or thirdly on platforms such as what is happening on the examples you've given in China so provide a platform and products and I think that the existence or question facing regulators and authority is how to mix what will be the touch point of regulation when it comes to those three touch points if we are to think of them as a pyramid should we continue placing obligations on providers even when they're acting in a very fast-moving world should the touch point to be on provider on platforms underlying technology and that changes very quickly or should it be on product to make sure that they are safe for the public to you so I'd really appreciate a comment from the speak on that and thank you very much for this very interesting and illuminating call thank you everyone thank you very much bill would you like to answer briefly yes I would get I thank you very much for your question and you're quite right the term of course I am m-pesa in Kenya has now I forget how many years 10 15 years or possibly more attached to mobile technology the ability to make payments I think the the you're right the the that the emphasis needs to be on quality as well as quantity I think that's totally correct on the three questions who reported the points that supervisors need to focus on I would say they need to focus on all of them the the real question I think for the future is how far the technology changes the structure of Finance and we don't fully know the answer to that yet hey thank you very much it will have a two last questions and then with that I will finish with some a finishing remarks first there was a question from Liliana Rodriguez from Colombia and it was a question if you want to unmute a CCL events Lilliana road ahead see how the question about concerns about privacy and then the other question was from zero from China and he had a question about the shadow banking brought by a Lipe and WeChat so first I suggest for the benefit of time that we first hear what Liliana has to say then we listen to zero and then we give Bill the opportunity to answer before I close the vent so Liliana lovely seen you it's very nice to see you I am very excited to be here thank you very much for the wonderful event there these are very valuable topics well I have a question that they refers to the issue of privacy I have seen that a point we are using electronic the like credit starts a and because of the different regions regarding data around the world when these creates like certain a pattern some profiles on a way that these devices aren't used so I would like to know from your perspective how a would these kind of issue be addressed by policies or in an eventual creation of virtual currency thank you very much thank you very much lovely seeing you Liliana so now we'll take the question from zero see if you can't again events CCL events and mute zero so that he can put his question to sit William Blair no hi professor Andrew Hong Beijing China and my thank you very much for this excellent presentation and my question is could you please share some of you move through a we have lost q0 if if you want to say the question again yeah so my question is could you please share some of your wheels on how to address the problem of shadow banking brought by a little pay and which happy because we know they also kind of cellphones and they make loans they take deposits doing like the commercial banks - thank you so much a bill if you would like to take these two questions please a mute yourself well they're both excellent questions and thank you for them let me start with you Lilliana you're you're quite right I mean the the the tray what I think I described is the trail that we leave in our lives is not that old but it's it's it's certainly not that new you gave the obvious example with credit cards but remember that that is all split up between different companies Marth MasterCard and Visa for example actually are collections of banks which in operating in different countries so it's not a it's not monolithic in that way but we're I think is a a real game changer that we all have to think very very carefully about is both the the great the great benefits that a I may bring but also for the first time the fact that enormous amounts of information cannot only be brought together and processed but and this is this is the new point that conclusions and deductions can be made from that data and so so that's why express those those those views and thank you for highlighting that Giroux thank you very much for your question and China's made a big contribution in the field of payments it's it's been a ahead in many many ways and I am greatly respect the progress that you've made on your specific question on shadow banking in a sense that a policy issue we know that shadow banking is a important feature of China's financial landscape but perhaps just though on payments and Alipay and the debt that the ten cent system the there is now as I understand it through the People's Bank of China which of course is China's central bank there is a there is clearing so that so the clearing now goes through the vo see now I don't afraid no how granular that is but certainly the the fact that that is happening implies the central bank and therefore policy policy proper politie the proper application of policy may may become simpler to do so that's how I thank you thank you very much I mean there are many other questions I'm just seeing a question from my dear friend and is still in my fellow do you see a risk of a b g brother or surveillance estate if Cass is eliminated but we do not have time to answer more questions speaker because I was ordered to give place to the next set of events that are celebrating other areas of law at CC LS today so I am just going to say a few final remarks and and I will start again by thanking our distinguished speaker for all the work that he has done in order to prepare his presentation today and always for his enthusiasm in being as as as a professor of financial law and ethics a great supporter of all our CCL s activities we are very privileged to have Sir William Blair as a colleague and friend let me also add a few words of thanks to Carlos Cavallo who has been always very instrumental in helping both bill and myself in all projects concerning Financial Inclusion also to Clara Barbie ani who helped us as Carlos said to put together the presentation which was an excellent presentation also from a technical standpoint to Christine and our events team which have been following up and ensuring that everyone could do a could could listen to the webinar today connecting from time songs and from continents and then also to our alumni team who have been very active in ensuring that everyone could be reached out and this is also call for alumni please stand the word of cils and our themes and I am just going to put again in in the in the chatroom to everyone to projects which I'm doing at the moment which one has to do with a sovereign debt foreign and and if you press on the link you will see more and one has to do with the subject of today the legal and economic conception of money projecting with some principal investigator and in which we look at many of the issues that Professor Blair has discussed today so please look into that and and keep in touch and a last but not least I must find katrien see katrien male who has one of the questions and who has joined CC Ellis as one of our age Angus the in terms of most recent a people who have joined banking and finance CFL organised event and the NCC had also the the idea of both selecting a inviting a bill for us our friends here William Blair and also off of a green will with the theme and and it can be seen from the perspective of all the questions that we have received so far that this is really a very important subject my final comment has nothing to do with it well has something to do it has to do a reflection of Coby BT he's because of physically today many of you have made plans and even trouble bell rings mr. and we're very grateful for for that for those plans and that commitment that alumni a loyalty which we transfer very much and just to say that that really financial inclusion is very much related to one of the calls for help has been done by both the the managing director of the IMF and the World Bank president David Malpass who said a few days ago that billions of people will have their livelihoods affected by the pandemic and many people 60 million could be pushed into extreme property poverty and that is Georgina sorry Kristalina Georgieva had said that this is a truly global crisis like no other so clearly the issues of the future of technology the use of technology we are meeting today virtually and the issues of financial inclusion or very much the flavor of the day also in the context of the dire circumstances that many in our countries are living so with that final reflection and a thanks to all our wonderful alumni for joining us today please stay in touch please keep your love for CC Ellis as you're telling me in your chat room alive and I will now do a virtual clap to Bill Blair so allow me to say thank you very much bill bye-bye