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Digital Currencies and Economic Freedom – Reimagining the Future of Finance

SpeakerS:

Guy Baron, Head Of Investment, Tony Blair Institute for Global Change
Faryar Shirzad, Chief Policy Officer, Coinbase

With Core Programming Sponsor

“The technology allows you to store and transfer a unique digital token individually—so I can have a unique digital token that I can store on my own and move it just like I would move a text or an email. Now, why is that significant? It's significant technologically because until the development of crypto technology, there was no way to prevent the easy duplication of a digital thing—a digital email, a digital text, a digital asset.” Faryar Shirzad
“It doesn't pull on the heartstrings in the way that remittances do, but in terms of reducing inefficiencies and reducing systemic risk, it's a really exciting potential application.” Guy Baron

Key takeaways:

  • Empowerment through crypto technology: Crypto technology empowers individuals by allowing them to store and transfer value without relying on intermediaries, which they may not be able to afford or which may exploit their information. This can drive financial inclusion, especially in developing countries. 
  • Economic development via financial inclusion: The adoption of crypto mechanisms can help drive economic power and development, focusing on financial inclusion which is a major issue both in the US and emerging countries. 
  • Impact on remittances: Crypto-based remittance services can significantly reduce transaction costs, allowing money to be sent across borders for pennies and moved instantaneously. This has profound impacts at the individual and economic level. 
  • Need for political leadership: Proactive policymaking and political leadership are required to harness the potential of crypto technologies. Countries are adopting enabling legislation to support digital commerce, understanding that tokenized commerce is inevitably coming. 
  • Tokenization and efficiency: Tokenization of assets and financial instruments can lead to efficiencies, reduce systemic risks, and modernize outdated financial systems by enabling instantaneous settlement of trades.
  • Regulatory paradigms and disruption concerns: Regulators operate under existing paradigms, and policymakers often question how crypto technologies will help and whether they will undermine traditional mechanisms. Addressing these concerns is crucial for adoption. 

Action items:

  • Develop clear regulatory frameworks: Policymakers should create clear rules and enable legislation to support digital commerce and tokenized economies, ensuring that regulatory paradigms evolve to accommodate new technologies. 
  • Promote financial inclusion with crypto: Governments and organizations should explore and promote the use of crypto technologies to provide financial services to unbanked and underbanked populations, reducing costs and barriers to access. 
  • Support crypto-based remittance solutions: Encourage the development and adoption of crypto-based remittance services to reduce transaction costs and increase the speed of cross-border money transfers, benefiting individuals and economies. 
  • Educate stakeholders: Invest in educating policymakers, regulators, and the public about the benefits and risks of crypto technologies to dispel misconceptions and build trust. 
  • Leverage tokenization for market efficiency: Explore tokenization of various assets beyond currency, such as derivatives and capital markets activities, to increase efficiency and reduce systemic risks in the financial system.
  • Address concerns about disruption: Engage in dialogue with stakeholders to address concerns about how crypto technologies might disrupt traditional mechanisms, ensuring that the transition supports economic development and social needs.

 

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