Session 8: Implications for International Relations

China and the West are both moving ahead in developing this cluster of digital innovations. Will their respective systems be interoperable? With what implications for international security? Will digital payments technology require or accelerate the bifurcation of the world economy into two competing blocs? How will this affect great power politics and the dynamics of international relations? How in turn will greater nationalism due to the Covid-19 crisis (if, as seems likely, this turns out to be the result), increased tension between the U.S. and China, and the rise of the “splinternet”...

Session 7: Implications for the International Monetary System

Bank of England Governor Mark Carney, at the Federal Reserve Bank of Kansas City’s Jackson Hole Conference in August 2019, proposed creating what he called a “Synthetic Hegemonic Currency” to replace the dollar as the linchpin of the international monetary system and create a better match between the increasingly multipolar global economy and the global payments system. Carney alluded to the idea that his SHC could be made up of a basket of central bank digital currencies, but he did not provide specifics.

Session 6: Implications for Regulation

The regulatory issues raised by these actual and potential digital innovations are vast. Would the issuer of a digital currency used globally have significant amounts of market power? Would its dominance hinder further innovation? How would the confidentiality of users’ data be protected while at the same time preventing illicit use of the technology for money laundering, tax evasion and terrorist finance? Is it possible to bring BigTech, Fintech and established financial institutions under one regulatory umbrella, and if not, then what? Would the ability of national governments to issue...

Session 5: Implications for Financial Inclusion

Say one thing for Libra: it has highlighted the question of whether a private label digital currency would enhance financial inclusion, in developing countries in particular, or whether existing telecom-enabled platforms like M-Pesa and Equitel have already delivered the bulk of the benefits. The Covid-19 crisis has again highlighted the social problems created by lack of financial inclusion, suggesting that governments will now attach more urgency to addressing them – the question being how, exactly, to address them.

Session 3: Central Bank Digital Currency

Virtually every central bank is studying the risks and rewards of CBDCs. But there is no consensus on whether those risks and rewards are large or small. Similarly, there is no agreement on the consequences for commercial banking. Will central bank digital currency reside in accounts at the central bank or in electronic wallets outside the central bank? Will central banks maintain digital accounts not only for commercial banks but also for FinTechs, nonfinancial firms, and individuals? If central banks are slow to occupy this space, will the private sector quickly move to fill it? If so,...

Session 1: The Evolution of Payments

To set the context for then FinTech innovations, we start with the basics in order to understand the historical development of payments systems, starting with the bill of exchange first developed in 13th century Tuscany and concluding with today. This presentation will seek to identify the driving forces behind and constraints on the evolution of payments technologies. A timely focus will be to ask: how have payments system responded to major crises in the past (wars, pandemics, financial crises)? Do such events set back structural changes in payments system, or accelerate them?

Session 4: Implications for Banks and Financial Systems

New payments technologies could limit the demand for banks’ existing payments services if those banks don’t adopt those technologies themselves. And even if they do, they could limit the margins banks earn from these operations. Similarly, for Visa and Mastercard. CBDCs could limit the ability of banks to attract retail deposits, forcing them to shift to a narrow-banking model and causing funding to shift to the shadow banking system. More generally, how will Fintech affect competition between BigTech, FinTech and established financial institutions? Relevant in this connection is whether...

Session 2: Technological Opportunities and Challenges

This session we seek to develop an analytical map of the diverse Fintech innovations and how they are related to one another. This will enable us to ask questions such as whether Blockchain, a highly touted, innovation, is in fact viable technology in the payments space? Or: will advances in computing make distributed ledger technology cheaper and more flexible and, if so, when? What frontiers of computer science and encryption are relevant to this financial space?

2020 Schedule of Events

Day 1 – October 19th 2020

Block 1

8:00 am – 9:00 am

Evolution of Payments

Presenters: Williams Roberds Federal Reserve Bank of Atlanta

Steve Quinn Texas Christian University

Moderator: Barry Eichengreen University of California, Berkeley

Discussant: Brad DeLong University of California, Berkeley

9:00 am – 10:00 am

Technological Opportunities and Challenges

Presenter: Bill Janeway Warburg Pincus

Moderator: John Zysman...