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The round table was hosted by FT journalist Jemima Kelly and
joined by Mamuka Baktadze, 13th prime minister (2018-2019) and
minister of finance (2017-2018) of Georgia, David Blumberg, founder and
managing partner of Blumberg Capital ($500 AUM), Jeff Schumacher, founder and
investor, 55 Catalyst Capital, Henri Arslanian, chairman the FinTech Association
of Hong Kong (FTAHK) and Jalak Jobanputra, founder and managing partner,
FuturePerfect Ventures.

The question posed for these guests was what is the future –
private banks, central banks or Blockchain Digital Currencies? Jemima kicked
off the discussion by saying that she was a bit of a sceptic when it comes
blockchain and cryptocurrency. However, she was prepared to hear arguments on
both sides in this debate. In this she was countered by an enthusiastic Henri
declaring Davos the Burning Man of Festivals. This set the tone for a lively
and engaged conversation.

Jemima quoted Tim Draper where he said people would be
laughed at for paying for goods in fiat. “I haven’t been laughed at for
spending fiat so far and don’t see that changing any time soon. Did the panel
really think that by 2025 fiat would no longer be supreme?”

Jalak quickly pointed to emerging markets such as Africa
where MPeso was the largest payments processor on the continent. “It happened
without smart phones. Not sure it would happen now but certainly emerging
markets tend to leapfrog developed worlds.”

The former prime minister of Georgia pointed out that all
economies have digital currencies but that the policy makers remain the most
sceptical (more so than FT journalists). “However, history teaches us that
first movers have the best advantage. It was the same with the industrial
revolution – those governments that are slow to adapt fall behind. Those that
embrace change and new technologies are the most successful.”

Mamuka also pointed out that industries work well when
change comes from the bottom up rather than the top down. However, in the
financial world for some reasons policy makers try to impose from the top down.
He questioned this.

Georgia is also the first country according to Mamuka to
introduce blockchain government services. He reckoned that despite opposition,
Georgia has managed to implement transactions that were 25 times faster and
cost 15% less.

It was pointed out at this stage that hindsight is 2020
vision and it is easier to look back and celebrate cherry picking the
successful technologies. The question asked was what about the technologies
embraced and then not successful. What about those losing bets?

Another point raised was on trust. One panellist pointed out
the US spends more than $50 billion on KML to avoid money laundering but only
accounts for 1% of the suspected amount.

David agreed with the former comments when it came to first
mover advantage. “It is easier for smaller countries to take the leap. Georgia,
Estonia etc.”

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Rather than just digital currency, programmable currency was
discussed. This way fraud can be easily avoided if data can be attached to
currency. It was also agreed that in the time of disasters, money and aid can
be sent directly to those needed without siphoning, corruption or excess fees.

Jalak spoke of India where digital identity and biometrics
have enabled the swift payment of benefits. It was slow she argued until
citizens understood they needed to register to get benefits. Then it snowballed.

This led to a debate on governments using financial
induction to gather pervasive and possibly intrusive data on its citizens. It
was pointed out that in the hands of a powerful government this might be
abused, especially if the citizen did something wrong. One panellist asked what
‘wrong’ meant and who would define it. Of course, blockchain is not needed for
this exclusively – back in the times of the Cold War citizen surveillance was
very effective without half the technologies available now.

Henri also noted that the back in the day the internet was
seen as good for viewing porn. “It still is, but it is also good for booking
tickets, buying goods and watching cat videos. Same for blockchain.”

Jeff pitched in that it was not an all or nothing play. When
he evaluates companies for possible investment, he has a 13 point check list.
“But the biggest question we ask is ‘why now?’ Sometimes an idea is too early
and sometimes it is too late.” He concluded by arguing that blockchain is not
good for speed but it is good for provenance.

The conversation circled back to fraud again. It is noted
that merchant fees include insurance for fraud and so overall fees could be
reduced if fraud was also reduced – and by definition the KYC requirements for
blockchain were more secure as a rule than those for traditional finance.

Libra was spoken of briefly. Henri thanked Mark Zuckerburg
for making it news. “Crypto makes us reconsider fiat. What does money mean?
What do central banks do?” It was an exciting time for money he said.

It was also agreed that when governments allow for tax to be
paid in crypto then mass adoption is just around the corner.

David broke down the three different audiences for crypto.
He defined an audience for remittances, middle class visa users and then
institutions. They all have different
needs he argued. And Henri called for integrity. If we see scams it was our
duty to call it out, he said.

Finally the last word is for the local moderator who pointed
out the Swiss Government accepts taxes in bitcoins.