Hyperledger Foundation Meetups, 31 Aug 2023

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From YouTube: Deposit Tokens -- Ideas, Approaches and Implementation Challenges

Description

A virtual Hyperledger meetup hosted on August 31, 2023 with Daniel Szego, DLT Architect.

Deposit tokens and tokenized commercial bank deposits are getting to be an interesting innovative initiative to offer commercial bank money in a tokenized form. During this meetup, we will investigate some of the current ideas, approaches and research topics of deposit tokens. We will also analyze possible implementation challenges considering different consortium or public blockchain platforms.

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A

Be your life, okay, so hey everybody uh and good morning, love! So hey everybody good morning and good afternoon and good evening, depending on the time zone. uh This is Daniel, and this is hyperliger Meetup and we're gonna speak of that positive.

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Commercial Bank deposits- uh that's gonna, be the topic um for today uh and basically uh just just for not to be surprised. My network is sometimes is a little bit buggy, so it might happen that I that I go offline, live for for 10 seconds. uh That's gonna be like my unintended coffee break and then, even if my voice is like a little bit, buggy then I just just try to speak slowly, so so I hope, I, hope it's. It's gonna be great at the end. So uh but I mean this is hyper legit.

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uh This is the uh blockchain Meetup series from uh from Linux foundation and then um so basically, hyperledger focuses Focus for the first from basically on on on on Commercial applications and basically like uh like more like console scheme like.

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Yeah Daniel you're still there.

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Oh looks like Daniel dropped. That was basically my uh unintended coffee break but anyway. uh So basically, the topic for today is is deposit tokens or Bank deposits, which is which is practically very very early stage. uh I would say uh that there isn't many applications uh on the topic, uh so basically, what I'm gonna have uh I will have like, like a 20, 30, 30 minutes uh presentation on the topic, and then we can have some some conclusions. Some some discussions, some some questions and answers at the end.

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Basically, so this is the agenda for today uh we start uh with one slide. What is actually a deposit token uh I will just continue a little bit like tax. Only if money or or normal digital money forms, then I will have couple of slides on on use cases and benefits of of deposit tokens. Some initiatives um again there isn't very much uh initiatives. It's it's just because I mean this whole whole field is, is very, very normal.

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Under you, uh some platforms I mean actually there's there's only one platform uh which is surely capable of of issuing uh deposit tokens. uh All the others are just you know, I mean.

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So all the all, the other things are, are just uh platforms that might be capable of of of issuing. Basically, uh something which is, which is a deposit token I will I will give some some very good further references, uh basically at the end and then some conclusions and of course we can continue with questions and answers. So that's gonna, be the agenda for today.

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uh I hope my microphone and everything works well at the moment again, uh I might as well have some some issues but uh I hope I hope it's working at the moment.

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So uh let me just continue and then so. What is it? Okay, so that was the token is, is basically a transferable token uh issued on a dld. It shouldn't be necessarily a distributed Ledger, but usually we associate with the LTR blockchain and it is basically this token is issued by a license, depository institution or practically by by Banks or commercial Banks, uh which basically has has a deposit um as as an Evidence uh behind this uh issues token. uh So this sounds a little bit like, uh like scientific first run.

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If you are, if you are not the banker, uh basically, uh the idea is uh that that that, for a classical bank deposit visual token, um it's important that this this should be a tokenized form of band deposit and then so I just say it is issued on the blockchain a distributed. Ledger technology distributed technology.

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uh It's it's not necessary, not a absolutely necessary that it is. It is issued on a DRT on a blockchain. It is just if we say tokens we usually associate tokens with blockchain with distributed. Ledger I mean we might as well interpret tokens without blockchains.

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um There are some initiatives like I, think one from Visa uh that tries to to do like uh tokenize the applications on on message bit based platforms without blockchain, but usually, if, if you say token or tokens, that's something which is which is practically Associated uh by by blockchains.

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So uh usually there are two concepts and then they are pretty much the same. There are like very minor differences uh between deposit tokens or or tokenized Commercial Bank deposits, so I just use them. Actually this is the same concept. um So if you say like deposit tokens or tokenized Commercial Bank deposits, what we think of that's basically a claim against an issuing bank- that's usually a Commercial Bank.

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uh It is convertible on demand uh and at par so one to one to to Traditional Bank deposits or even to central bank money, uh which is, which is I mean cash. Mostly, um it should be like full fungible um to provide the singleness of currency. It is certainly a very good question how we can provide like full fungibility.

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um It's usually a tricky question. I mean I mean even it's with like cbdc is it's it's a difficult question, how we can provide full fungibility, but the idea is basically that the deposit tokens act as money um as a single money, basically, which is, which is the wall to all other forms of money. Again, if that's is realistic or not, that's that's a very good question. uh What's important, it's backed and handled the same way as as classical Commercial Bank deposits.

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uh So basically it means um such deposit tokens should be regulated, actually the same way uh or more or less the same way. The school measured, Bank deposits. uh Of course uh I mean it raises some challenges because of the nature of blockchain, which, which is which is more, like you know, I mean I mean um not in the company, but somehow brings information and token and value outside the banks outside of companies. So it is.

A

It is very much questionable if that can be realized uh absolutely, but the idea is that, from a from a regulational from a from a practical perspective, it is the same as a classical Commercial Bank deposit from a regulatory principles. It's like EML, keyc, Basel and stuff, like that, should work the same same way. There are some discussion as well that like, for instance, deposit insurance, which is like a hundred thousand Euro in in the EU.

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If I'm not mistaken, it's I guess like 20 50k in the in the US, so like that positive Insurance should be, should be available or or valid for deposit tokens as well again, I mean that's the idea. uh Certainly it's a good question how it can be realized, as as basically tokens are not in the banks in the company, but somehow a little bit more outside. So that's deposit token or or tokenized Commercial, Bank deposit.

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um So let's see some some taxonomy of money uh and some some different forms of money, and let me just try to to put in somehow into detect some of money, for instance um this and this deposit token. uh This is the classical money flower.

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um It's like I think like three years, the old. So it's it's pretty old actually, and it won't won't capture fully um like this tokenized deposit. uh It's such an overlay or such a new idea, but basically what we see here, that's like four dimensions, so we got money which is Central Bank issued we got money which is which is peer-to-peer or I would say more decentralized. We got money which is electronic and we can. We have money which is which is Universe, universally accessible.

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I would say it's for for retail and then we can have like different characteristics or different kind of monies here. So, for instance, if you say cash cash is issued by the Central Bank. It is not electronic, uh it is practically peer-to-peer in a sense and it is Rich there. So it is universally accessible. It's like uh novel ideas of Central Bank digital currencies. These are in the middle practically it's like kind of Central Bank issued um peer-to-peer money which is electronic and and Retail so accessible for for everybody practically.

A

So this is the money. Flower I. Just don't uh don't take a look on all of this uh these items. But if we take a look on like deposit tokens, uh we are somewhere somewhere in the direction of Bank deposits and and special form of cryptocurrencies I would say uh so. First of all, uh basically deposit token is a kind of bank deposit because it's electronic and these universally accessible meaning that's practically a retail payment.

A

But but the point is that, basically that's not issued I mean it is issued centrally, but it has some decentralized characteristics as well, so in some sense, if it has characteristics of the stable coins, we see here cryptocurrency again, because that's I mean this money. Flower is all like three years old. uh So it's a bank deposit which is electronic, which is retail, but has some peer-to-peer characteristics as well.

A

um We see here, like just peer-to-peer if we say like the decentralized uh decentralized can be interpreted in many many different ways. Specific of deposit tokens. I would say it's something which is semi-decentralized. It is because um it is, um it is handled by a distributed. Ledger platform so like the transfer itself is decentralized, is peer-to-peer, but the additionals of the money additions of the token is not decentralized. The issuance of the money is practically realized by the given commercial or by a given Commercial Bank.

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So if you speak of like deposit tokens, we are somewhere here with some some peer-to-peer decentralized characteristics. It's electronic, it's not issued by the central bank, it's retail and it has some uh some decentralized elements as well. So that's what I summarize here, it's electronic! It's! It's retail! uh It's non-central event issued uh it's not it's not issued in a decentralized way, but it is handled.

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This issued by Banks, it is tokenized, partly peer-to-peer. uh The token settlement is peer-to-peer, but issuance is not additionally centralized. So that's what uh what? What the deposit token we can compare a little bit of it like other novel digital money forms as well, and then it's getting I mean this is like uh more up-to-date uh list of different monies different competing monies um than the money flower. So first uh we got something which is a cbdc. uh Cbdc is a money which is issued by the Central Bank.

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It is basically a direct liability to the central bank, and then we can have like whole sale or retail uh uh versions versions of it. uh It's like the the digital Euro initiative on the on the European market. It is, is cbdc initiative. At the moment. Of course, we can speak of something which is a synthetic or indirect cbdc.

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So the point is here that the synthetic cbdc is not issued by the Central Bank directly, but indirectly, by regulated institutes in its institutions.

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These regulated institutions might not be Banks, I mean I mean they can be practically like a payment service providers um and then basically, a synthetic CBDs is is, uh is a representation of a private Library liability that is backed by one by one by uh by by by Central Bank money, uh money, I would say uh so. That's practically.

A

It's like by traditional resource had held at the at the central bank and we got tokenized deposit, uh so tokenized deposit is issued by by regulated deposit taking institutions um so practically by by mostly by commercial Banks, um and this is a direct representation of a private liability uh against against a Commercial Bank and it is backed by by Commercial Bank money. uh Practically this backed by the by the balance sheet of the of the comments.

A

And basically what's insured and it is I mean theoretically should be regulated the same way as basically a Commercial Bank bank deposit. uh We got some some other two new forms of money and then here things are getting a little bit like more complicated. What is the deposit token and what's not deposit token, so, for instance, we can have something which is a Fiat Fiat packed stable coin.

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uh Tax table coin uh can be actually issued by regulated and not regulated institutions, and then it can be different uh if it is fully packed by Fiat or it is this just partly backed by Fiat or or partly algorithmic or or something so so fear. Tax civil coin can be actually more more complicated.

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um It is basically a liability against a private issuer uh which is packed fully or partly, uh which is backed uh fully or or partly by fiat currency uh and then, basically, uh that's uh that's, that's either regulated or non-regulated. There are some some regular.

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And then we can have something which is tokenized e-money and then tokenize. The money is like another similar concept.

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um There are regulated human issuers uh uh yeah practically you should such I would say a Fiat denominated, stable coin, uh which is uh which is uh which is a liability of the of a regular DMI, and it is referenced to a single fiat currency as and back one by one, uh basically in liquid or or low risk assets, so I would say uh so. These three categories can be basically similar uh if they are issued by Banks. uh Theoretically tokenized and the differences is sometimes difficult to decide.

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I would say it's like um if it's a Fiat pack stablecoin, which is issued by the bank, then practically uh it should be regulated by Mika as an asset reference token, and that practically provides like other warranties uh that that are available for uh for like uh for like for like uh Commercial Bank deposits, for instance. So they are, they can be similar, uh but especially if they are uh issued by Banks, but there might be some minor differences.

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These are most most likely, probably like legal differences and the differences in like uh Securities and and then then different uh rules that should be kept practically.

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So uh let me just continue and with like a little bit like you know, I mean easier topics. Let me see some use cases and benefits uh of deposit tokens, so, firstly, uh they can be used in payment.

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They can be used in Fast, faster or cheaper, or as a faster or cheaper payment solution. uh It is. It can be especially exciting if it is like a cross-border payment uh because, like you know, I mean payment team, one jurisdiction.

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At the moment for implementing the movie, you it's pretty bad, but if you speak of like cross-border payment, that's usually something which is regarded as as slow and and inefficient and expensive. So it can be deposit. Okay might be actually a solution that improves uh cross-border payment. Now we can speak of like Innovative payment.

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um This Innovative Payment Solutions are that are especially associated with did uh uh and then someone or such examples are micro payments uh um and more on the technical side. So I mean something. uh If you have like a blockchain, then we can have like a stationary integration. So we can have live.

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You know, I mean thousand one cent transaction uh per second or something similar I can provide something which is a machine to machine payment, perhaps generally better pay per use, license models, and perhaps even better Innovations like wallet, integration, sense and so on, and so on, uh for instance, one one thing which is on the European market: uh there's the there's the European uh wallet initiative at the moment, uh which which actually actually tries to tries to uh integrate like Payment Solutions as well.

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So it's like uh uh it's like, especially a Hot Topic like how like like, like practically a verifiable credential based uh based wallet, can be integrated with uh with Payment Solutions and then then one way of of thinking of it is like using a deposit tokens.

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It's another benefit or loose case is programmable payment, of course, or programmable money, uh especially if we think of like multi-asset Atomic transactions, uh I mean, of course, blockchains and smart contracts are very good of realizing such as things uh uh it's like changing one one currency to another, one or one token, to another, one or uh or or basically, if you think of um there's like an initiative between tokenizing everything.

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So if we, if we think of like like other tokens, non-money live tokens as well, then, and then especially uh like payment for no money live token is is difficult. At the moment, I mean I mean we can use, of course like stable coins, but it's just fully. It's just not fully regulated, but partly so it might not be the best option. So as soon as we speak of like multi-asset Atomic transactions, of course, I mean blockchain and tokenization is a good way to do it uh it. It implies reduce counterpart risk.

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Of course, uh supposing that the smart contract is accurate enough of course, so two examples are like payment versus payment. It's like if I change, one money to another one or one currency to another, one, your payment versus versus delivery. uh It's again the use case. Let me just imagine if I have like how can I security like a tokenized stock or a tokenized bond, perhaps in the future and I just want to buy uh for uh for for uh for for a tokenized money, uh a piece of like a tokenized bond.

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um Of course, uh it's possible to do uh with centralized institutes, but that's kind of a counterpart risk, so it can be probably done faster, cheaper and with with reduced counterpart risk. If we think of a full tokenization and the money lag I mean the cash lag can be basically a deposit token yeah, so further use cases and benefits.

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I mean one big benefit is interoperability generally uh the way I see and the way several people see.

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There's a big gap between the the classical Financial work or infrastructure, and and and and and with this uh new, like blockchain based so Financial attempts I mean these are just the experimentation of course, at the moment, but despite um they, it's just pretty difficult to integrate them into the classical Financial work, so deposit token might provide actually a way uh for for interopoly interoperability uh with like uh integrating money in a in a very classical banking form with other did based Financial ecosystems.

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It might provide a way integration way with like web free applications, I mean, of course, web free was was pretty much hard like for for two years.

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So the hype is at the moment over, but I would say, I mean despite the hype is over web freeze is, is here to say, stay um and then uh again anything which is in web free and has a payment lag, that's kind of difficult, I mean I, mean people use cryptocurrencies, of course, but it's you know it's just risky, no regulated, and so not the luckiest thing to use so one way of of bringing like a fully compliant regulated payment uh into the web.

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Free work might be actually a deposit token, as well again can be like a cash cash like for for any digital asset transactions. uh It can provide better integration with tokenized use cases, of course, and perhaps this is all what it is more like science fiction or where it's not so science fiction, but a little bit like it might provide actually an integration with this D5 decentralized, Finance. um So decentralized finances is very much Innovative uh and then very much experimental and very much unstable at this stage.

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But, for instance, one way of bringing like more stability uh and more.

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Could be like using uh regulated tokens as payments, and then this can be actually deposit token. It's again, it's a little bit like blocked on stuff I would say, but it's certainly a possibility. uh One big benefit. Basically, the deposit token uh preserves actually the the the credit creation and it is preserves basically the uh the uh the two-tiered monetary system.

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So, if you think of like some of the initiatives uh like cbdc, uh then CBD, even cbdc or or stable coins might have actually the risk that they just uh just this, this intermediate the the banking system, um even if you think of like the new uh digital Euro initiative, um there's I mean the new digital Euro initiative um has like, like a three three thousand uh Euro limit as an account limit uh not to compete with the with banking money practically, but this limit is very much very much a struggle.

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So it's it's just difficult to bring like new payments, Solutions I would say in a way that it it doesn't compete uh practically with the with the banking system. So I mean this could be a way because because I mean I mean this way practically, it is a token. uh It is a new innovation which is issued, uh which is introduced directly by the by the banking system. uh Last but not least, there might be even like possible coexistence with cbdc's I mean, especially with uh with horses cbdc's.

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If you think of I mean deposit token is, is clearly like a retail use case, so, like retail use case, retail deposit token and Retail cbdc might compete with each other, but if you think of like horse horse cbdc and deposit token combination that might actually work.

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So let me have some some technical stuffs. I mean I have just this slide on on technical us, uh it's again, it's very very early stage.

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um We can Define.

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Token can be issued, um we can consider several token types and and infrastructure considerations. So, in terms of tokens, um the probably the worst solution is like something which is called the color token.

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In such situation, each Commercial Bank issues its its own uh deposit, token, uh totally independently from from other Banks, uh perhaps on a different technological basis, on different results and then even tokens and and risk and and Technology we specified independently from the others.

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um It is not a very lucky solution because um it has problems with the singleness of money. This problem uh problems with with fungible fungibility of the token, so it would be a better way if, like you know, I mean it would work the same way as as like as like. It's like retail money. Even if retier money uh is issued practically partly by Banks, uh it is fungible uh it is. It is considered as as a single currency. Basically, the next solution is that uh several several uh Banks, uh practically jointly own and and.

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um Issuing like, like a single deposit tokens, um this participation can be, like you know, same platform, same token, um same liquidity, standards, uh providing better fungibility and and and and and liquidity, and then the best way is something which is a standardized token here. Effectively. Common uh common stock and standards can be introduced uh that uh that are backed by highly liquid resource and then it might provide like a full uh food. Fungibility of the deposit.

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Token is it's uh in terms of infrastructure, uh one consideration is like issuing on a private Ledger which is specific to bank. Again. This is probably not the luckiest solution. Another solution might be is like issue on a construction Ledger um here. The idea is that, like, like several institutions join and then set up a Consortium Ledger, uh it might be, it might be a possibility certain, certainly um and then last but not least, uh public ledgers might be considered, especially uh with deposit tokens.

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So I mean public ledgers are getting a little bit like more complicated at the moment, because there might be the consideration on on layer, one public, blockchains and there's there's there's getting to be many likely here to extension. Extensions as well, so I mean public ledgers from an infrastructure point of view. Getting like more and more complicated, I would say so. uh I did not find many initiatives.

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um It's again, I would say, because this field is is very early stage. Of course, I mean this whole field uh was initiated, probably by GP Morgan, the the they already created like a platform that Sonic's platform.

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um As far as I know, that's uh Consortium, a distributed Ledger platform with like the building functionalities for for issuing, for instance, deposit tokens and making some some operations on on that, and they even I have like a kind of a pilot projects. I think in Singapore.

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So sorry, that's that's again. uh That's my coffee break practice. Leave so I share. I share in my screen.

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So I would say, uh give me just give me just like uh five more minutes. I finished I finished my presentation and then we can have like a discussion uh and then we can discuss like, like anything, I got like yeah like uh four more slides, but these are mostly like. You know, I mean conclusions and and stuff like that.

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So just give me five more minutes and- and we can jump into the conclusion and then and then we can have um any discussion um that you feel like so um one thing is that, like the bank of England uh provide provides the guidance uh on tokenized Bank deposits, so practically the bank of England pushes basically.

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From from MasterCard uh for deposit tokens, so these are the initiatives. uh Of course uh question is, uh which are the possible platforms that might that might provide uh functionalities for for deposit tokens um and I would say um the Spanish I know only the Onyx platform from from GP Morgan, um which is fully meant to provide a deposit, token functionalities, but I would say uh there will be probably a other platforms as well, that might that might provide such functionality in the short term. But again um this is these are just my guesses.

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um I would guess the platforms that provide at the moment uh like like cbdc, sandbox, uh cbdc, experimental Solutions, um it's because from uh from a tokenization perspective like a tokenized central bank, money, money and the tokenized Commercial Bank bank money is. Is that something which are which are very much different, different again from a technological perspective, so platforms or sandbox, providing of cbdc like Pilots or or any initial Frameworks can be probably easily extended to to deposit tokens as well.

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Talking about these, just guesses I would guess the regulate his liability Network. Perhaps he might have some uh some. It might might have some some some deposit functionalities already I. Would say uh the the exactly larger people they have like a cbdc Sandbox that can be probably very easily extended to deposit tokens. Art recorder has like basically kind of a cbdc Sandbox as well. It can be probably very easily extended to deposit tokens and then under hyperledger there are like hyperledger cbdc experiments.

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On a research phase, because I mean this whole field, is, you know very much open source but there's one experiment with uh with the high pressure Fabric and the token SDK again technically, that could be very easily extended to deposit tokens as well, and, of course the question is uh I mean I mean, of course these are original CBD Synergy initiatives. But if you speak of like deposit tokens, uh we might as well consider like public blockchain networks and then more it's just more viable than than them for a cbdc.

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And, of course, it's the question. If, if anybody provides like like uh like deposit token framework on on public blockchain uh networks, not that I know uh at the moment, but perhaps it's it's coming in the future and just uh let me summarize two more slides and then we can likely jump into discussion so I just I have some further references. These are basically the white papers. uh It's like the the banking on tokens from from digital U.S Association. It's worth reading, actually uh I I contributed.

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Basically here uh then there's the the deposit token from Swiss Bankers Association, it's a very good white paper as well for the depositing tokens from from GP Morgan That's. Practically you know, I mean I mean I, mean I mean that's the only platform.

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um There's there's like a white paper from from the Deutsche credit and Via shaft as well, and then, as far as I know, there are like one or two white papers from uh from from from bis as well.

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um These are goodbye papers, so I would I would recommend to read uh these white papers uh again. These are the four ones and like two more bis papers and then this card pretty much the state of the art of deposit tokens. So one more slide. This conclusion. uh So basically, as a conclusion, I would say, the the innovation of money uh I mean has been, has been really heavily accelerated in the last couple of years so like for, for, like 20 years, there were like I, don't know one or two different kind of money.

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At the moment, I would just uh count like I, don't know, six, seven, eight, nine, ten different kind of money.

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um So it's just sometimes frequently, uh on the other hand, like like token based Innovations, um are expected to have a very high Innovation potential so like again, uh there's this tokenized Europe uh 2025, which is from the which is like a new initiative. So it's it's it's a little questionable uh if it's more like marketing or or if it's really man seriously, but anyway, it's uh it's a good initiative.

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So supposing that you know I mean I mean most of the services will be tokenized in Europe like I would say uh the end of the decade, for instance. um Of course, the question is, which is the payment that can be best integrated with like such tokenized services, uh again payment in generally with token based applications is challenging uh and then most like payment or token based current token, based Payment Solutions, like cryptocurrencies or even even stable coins. They have simple weak, weak legal guarantees and and very weak uh or even weaker customer protection.

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So deposit tokens might provide here basically a compliant and regulated uh tokenized solution for for payment and again one one important aspects it it. It does actually without this intermediating the banking system.

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So that was my conclusion and then I have just finished my presentation, so uh we can likely discuss any topics um that you that you feel like.

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uh So if you have like any questions, uh just feel free to unmute yourself and ask or or you know, if you have comments just just feel free to unmute yourself and and and comment my presentation or or comment comment, basically the topic uh otherwise I'm just just reading through basically uh the chat and if I, if I think I can answer answer the the reason question I I will just try to answer.

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Foreign, so there's a there's, a question: if there's any difference between deposit tokens and and tokenized deposits, uh I would say: I, don't think, there's there's much difference, uh perhaps um perhaps there's like minor difference from uh from uh from a legal perspective, uh but otherwise from a technology or even from an economic point of view. uh I would consider them to be the same.

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But again, uh if, if you, if you see differences between between deposit tokens and tokenized Commercial Bank deposits, um just let me know I I won't want to discuss with that necessary I would I would consider them to be the same yeah. So uh for the questions uh this this is live stream on YouTube.

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um It is recorded. So so you can take a look on the record recording later on and then the uh the slides will be shared.

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Regarding decentralization, uh so so in terms of decentralization decentralization is, is not just uh not just a black black or white thing, not just the binary thing, which is which is zero or one uh there are. There are many levels of decentralization, so we can. We can consider these things.

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That's practically uh like a console, assume, Ledger or a fully public Ledger, even even on a fully public Ledger. There are like different Arts of of decentralization. It can be like like more decentralized as Bitcoin or or less decentralized, as as having with like a par passing, uh centralized consensus, algorithm, and then uh we can think of uh decentralization as as functionality, for instance. So again, if we speak of like deposit tokens, are clearly the the transfer.

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The ownership of this token, which is decentralized uh but like the the issuing of this token, is not is not decentralized. It's it's like fully centralized. So again, um we probably speak of fear not generally not a fully decentralization but kind of a partial, partial, decentralization.

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Yes, so there's one question: what's the difference between deposit token and stablecoin, and then um so so stablecoin actually works might work pretty pretty differently uh for for stable coins. uh There are different schemes. Actually you can have like, uh like Fiat back stable coin, you can have like um crypto back still going and you can have like this one and then, even if you have like field back stable coins, it is not necessarily sure that it is. uh It is fully backed by Fiat and if it is uh issued by a by a bank.

A

uh So it is not sure that you have like the same same guarantees, legal and and secretary grantees for your tokenized money. As for your for your bank deposit, but if you just I would say if you just uh say that hey what is the difference between between a stable coins, which is fully backed by a commercial bank deposit and issued by the bank and deposit tokens, I would say not much, probably some minor uh regulational issues, probably in such specific.

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In that specific use case, your stablecoin is regulated by the by the Mika asset reference token and your deposit token is is by banking regulation.

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So there's one again, I mean if you have like any questions, comments uh that you want to issue or discuss with the community. Just just go ahead and mute yourself and then just just comment on us. Otherwise I'm just I'm. Just reading the chat and I'm just trying to interpret uh questions and try to answer them.

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So there's uh there's a good question: uh it's an open question: how how like a deposit token, should behave as an investment uh vehicle, uh but probably it can it's like, for instance, what's the interest bearing characteristic of of a deposit token, that's that's still like an open question, uh but generally that should work the same way as as deposits. uh Basically so so, theoretically, that you can like kind of um inverse bearing uh I mean interest characteristics as well.

A

Yeah there's one question: if I can share share my thoughts on the on the regulation framework for stable coins by the monetary authority of Singapore.

A

Legal stuff I have some some insights on the on the on the Mika regulation on the market on crypto assets, regulation uh which is issued by the European uh Union, uh but otherwise uh it's just monetary regulation from the monetary authority of Singapore is just too far from my competence.

A

um I'm not quite sure if, if there's already like, uh like SEC uh from the security exchange, any any regulation or regulation attempts, uh I didn't find like um like like examples uh apart from GP Morgan. uh If, if there's, uh if there's much initiative uh for for deposit tokens in the US of basically I'm more on the European market, uh yeah.

A

So so deposit token is, is not equivalent to a retail cbdc. uh It has some some differences, for instance, so for instance, uh one difference is there.

A

Sorry I mean I mean certain. The question is, which is the infrastructure? um If you see retail cbdc, uh then then, basically, retail cbdc is not necessarily considered to be issued on a blockchain. um If you see like the uh digital Euro uh initiative, it is, it will be issued on instant Payment Systems, not on a blockchain for several reasons. uh So that's one big difference uh and then basically uh deposit token is, is a tokenized form of money, so it's most likely uh will be issued on on kind of a blockchain.

A

That's one one different from a technical point of view. From an economical point of view, a deposit token is more risky is just because uh it is based on uh on banking, money and banking. Money is, is simply more risky than than Central Bank Central Bank money. um That's that's another difference.

A

uh The third difference, if you use like deposit token I mean if you, if you use VTS, CBC AC overall, you might practically um you know, I mean I mean compete with the with the with the two-tier banking system uh which basically which might affect our financial stability. uh Very, very wrongly.

A

um So that's that's a pretty big uh issue. uh If you use a deposit token, then you you don't have problems with this uh with the existing system. Basically, uh so what is the difference between retail cbdc and ycl cbdc, so retail cbdc is for for everyday users? It's like uh you know. If you buy a coffee like in uh in a Starbucks. That's that's retail cbdc! If you do like um settlements between two Banks uh or like two two foreign banks, for instance, that's who I say cbdc.

A

Between between Banks or financial institutes are not for everyday and uh users.

A

So again, if you have any questions, I mean just feel free to unmute or comments feel free to unmute yourself and then just ask the question.

A

Otherwise, I'm just just reading the comments and questions and then I just uh try to pick uh that I can answer basically.

A

So technical perspective is the is the deposit to cam produced and by a smart contract on the blockchain. Are so I mean it's a technological question? It depends on the underlying blockchain infrastructure. uh There are. There are blockchains uh where practically you, you need smart contracts for tokens. uh So so, if you like, if you, if you see helium or hyperledger fabric, you should Implement your token uh with the help of smart contracts and then your token is fully realized by smart contracts.

A

um There are other Ledger Solutions as well. It's like the I think the beautiful Ledger uh which which handles tokens natively. So you can issue basically um token you can transfer token uh and you can like probably revoke token as well as a native uh activity. You don't need smart contracts for for that. uh But if you have like uh some some some special uh program use case, then you can. You can basically help or you can avoid your smart tokens in in smart contracts as well.

A

So actually, there's one question regarding the the where you where you.

A

Deposit token should be actually the same as the SD SD Bank. uh So if you uh then, then you will trust in the. In the token you should you should buy your bank as one.

A

uh So there's one question: is uh it's it's a little bit off topic, but anyway uh uh for high pressure fabric development uh I would propose uh there's a Discord channel of of hyperledger uh and then it says like a hyperledger fabric session as well.

A

So if you, if you have any like technical topics uh regarding hyperledger fabric development, I would propose just to jump in into this squad channel of hyperledger and then and then just just chat with the people um you can find. uh You know I mean many. Many many variable help.

A

uh Anyway, uh if you have like any questions, uh it's just feel free to connect me later on. Otherwise, if you have any questions right now, uh you can feel free to unmute yourself and just ask: why is I'm just having like I, don't know one more question, probably and then uh and then we are, as we are running out of time,.

A

Yeah, it's again one more question regarding the the value of the deposit token, but the value of the deposit token is connected very strongly with the the value of deposit at the bank.

A

um So if you, if you trust your bank, if you trust that that your bank account has a value which most people actually has some of most people most prefer to trust. Apart from some some very strong crypto artists, uh then then you can trust, basically that the that the token has has value as well.

A

So I would say that was the last question as I as I s, I c uh I would like to thank you very much uh for the attention, and then that was basically the presentation and some discussion for today. Again this is a very early stage um saying this is a very early stage topic. We might as well see some some achievements uh in the in the in the in the next uh one or two or three years, and then we can have like more technical uh discussions and meetups as well.

A

Okay, thank you very much for the for the attention and for the contribution and then have a nice day.

A

Thanks. Daniel thanks. Everyone.