Disentangling EU regulatory conundrum - Panel w/ Thibault Schrepel, Xenofon Kontouris, Nena Dokuzov

okay uh thank you very much for coming uh we actually gather here really really good uh set of speakers and we'll try to bring you uh like on a really charismatic and practical way the legislation in let's say the world but maybe predominantly focusing on the EU and the US and maybe just a question before we start uh I got a question from our speakers what will be the let's say who have in the audience of just think about how many of you are actually familiar with the regulatory stuff you can just raise your hand okay and the people actually not into regulatory but want to find out more okay so pretty much we have half and half yeah it's like 30 30 70. so yeah we'll we'll start with Mika like Mika is something you hear like every day and pretty much we are all talking about Mika and the new regulation that will hit us in in the coming period but uh pretty much I I know by myself like I didn't dive into Nika that much because it's a large document so I just read a lot of summaries but still not aware what actually Mika brings to us so maybe just to ask our speakers for the opening to just summarize let's say the most important things about Mika and what we should be actually aware of in the coming period so whoever wants to start just please yeah you're looking at Nana right okay um I have to say that I'm very pleased that we finally got the regulatory framework for crypto Assets in Europe okay uh because uh what standard is made in Europe it's usually valid for the rest of the world um this is the first thing the second I should say maybe uh it was a long process of negotiations uh within Mika how to define uh the how to set the terminology how to go away from that um very well known old terms like utility tokens like stable coins and so on we got completely new terminology and this was the first thing that the member states and the experts were fighting also with the with the commission I need to say for almost one year the process was um ongoing and now we have it what is very important here is that at least we had got some definitions and at least we have something to change in the future without nothing we cannot change anything um on the other hand it gives a lot of power to National regulators and additional power and additional burden so I think it will be needed to be changed okay um on this and the third thing is that it brings a kind of legal certainty and the protection of the the competition somehow in the internal Market of Europe and what is also very important it does not regulate nft uh and it gives the place for Innovation it gives the place for uh upcoming web 3 solutions that nft is inevitable part of so um maybe these four um the introduction and I'm happy also that we uh got together within the package of Mika also that Dora for cyber security issues um and on the other hand uh DLT pilot regime maybe we will talk about this a little bit later um but what is very important is that that DLT pilot regime will connect um first the financial sector then sorry SME sector and boost the innovativeness and the solutions that are being developed on the European level for European blockchain Services infrastructure but maybe in details a little bit later yes yeah we'll talk about the funding available at the EU and this pilot regime which will be really interested but maybe just thinking up with Mika at the moment like we also have like a pretty wide scope of Mika that is covered so maybe like cell phone myself and you actually spoke about the crypto asset service providers how this is actually going to affect them so maybe you can tell us a bit more of your perspective what should actually come to us this service providers be aware of when it comes to mica absolutely uh first I just want to introduce quickly myself and why I'm here uh alongside the other panelists here we work on trying to help European policy makers make the best decisions for Europe and that's a line for everyone and I work through in Napa association association created by the commission with the help of the commission I'd say in 150 Plus members to make sure that the industry all of you are represented when this police making discussions happen so in other words we help these now defined casps talk about how they need to be properly engaged with regulations and requirements and with that when we Define a cost we Define a company a centralized entity that is based in Europe that is providing six forms of services exchanges for examples are casps advisors for Investments are gasps um developers I think of of code can be casps but we do not Define our scarps our dowels and D5 protocols um which is very important and that was something that we pushed very hard to achieve there is still a bit of a grease on there because all of those Innovative protocols and projects are not part of the regulation we are waiting for level two regulations just so you all know after the file passes which is a huge process no idea altogether there comes level two and level three regulations which our guidance is provided by asthma the ABA and other like authorities in Europe about how to implement these rules effectively in the market we're still waiting for a bit more guidance on that which is going to clarify entirely what is one isn't part of it there's still of course questions to be answered like how can I compliance Central Assembly become decentralized but cusps are not dowels and defies and that's by Design because they want to ensure that they growth and innovation of the industry continues for years to come until there is a much clearer version of how these requirements can play out so yeah they're pretty much going to be affected by Mika and probably they're going to need if not yet need to go and enter into some process of Licensing and actually I don't know fulfilling the other requirements in order to be registered as a cast within the EU I I don't think can you hear me uh I don't think uh dolls themselves will be licensed I think uh some centralized organizations that do some of the Community Development and coding will be Galatians casps and I think they should and ought to be these requirements are not crazy requirements they're quite reasonable irrational actually um that's what I'd say of course some would disagree but for what we've seen in other jurisdictions Europe is providing a much friendlier much more clear and understandable framework for our industry currently and I hope you guys agree with this no it doesn't limit this but we talk about Dao Dao is one part um and financial instruments are the other part so the common denominator here if we look into the common denominator is that we have them uh possibility also to the native decentralized digital presentations to be licensed at some point of the time okay um Dao can be supporting instrument for governance for funding the projects okay but um there are bylaws for thou already structured and already communicated but what I think is that Dao is not the only one thing that is needed to be or pending to be regulated it can be directly integrated into the legislation for the corporate laws in in the uh some countries and so on and it's easier to do it on the national level than on the European level probably it does have something with the we will talk later about the data act things need to be clarified but in any case if we talk about financing about supporting small and medium Enterprises about registering that issuers of the funding or financial instruments then I think that we need to talk about about the regulation in the financial part and in organizational and the management part of crypto assets so yeah in the coming period we can actually expect that everything we now know will be recognized somewhere in the legislation it is just a matter of how it will be regulated and whether there will be as just a sort of a framework or just a natural at the level of the of the let's say separate countries to be regulated as such so maybe would have some different rules in a different country so they can you know well the goal of Mika was always to passport a license across the whole Union right and it's important to also mention that anything about the security is not under Mika so if you have a tokenized security you need to comply with method too that's correct right so everything that has to do with securitization or real world assets is is part of the existing regulations this is a new regulation for crypto assets things are different in their nature not Security based goal was passporting and Still Remains the when you don't have something in the scope of mica it might not be passported across the union and that is the risk that we have of not having some of the nft projects or some of the defy endow protocols out there at the same time it allows for the gradient to continue to exist which let's be honest a lot of innovation has happened during the creation right and that's something that I believe is valuable and I think polish makers understand that there still needs time to understand what needs to happen for these requirements to be properly drafted and implemented for the industry effectively without killing it or over complying or over requiring things from innovators that are building things you know okay it sounds like a healthy approach right yep sorry if I can just intervene on this point so what you see if you look at the history of competition law Privacy Law IEP tax is that when you do have those illegal instruments coming out of Europe for years after that after they are passed you see a fragmentation in how the countries interpret those instruments right I think this is exactly what we're going to see for instance with the nfts in theory nfts are not covered by Mika it's Article 2 paragraph three if you look at recital number 10 it tells you nfts are not part of it but recital number 11 tells you they can be covered by Mika if they are part of a large series or collection quote unquote I'm not here talking about the fractal nfts I'm talking about crypto points and this kind of stuff and they say if they are this is something we can take into consideration this is an indicator of the fact that they are fungible and therefore covered by Mika now each country is going to have different interpretation of that and I expect that for the next three to five years you're gonna see fragmentation again and it's going to be hard to navigate this is what happened in all of the fields of the legal field if eventually because it diverge you will see that some people will appeal what national agencies are saying this will go to the general course the court of justice of the European Union and eventually the court will hear give us the way to actually read the EU law right and then after those years you do have indeed some more coherence in the way we interpret the law but my understanding if we look at what happened in all the fields of the law is that for the next coming years we're not going to have you know a beautiful single Market with just one rule understood the same way all across Europe so it's going to be hard it's going to you know hopefully we'll be here next year again to discuss you know what's the interpretation of Mika uh but uh don't don't don't think of it as you know I just look at EU law and that's it you have to to be aware of which jurisdiction you'll be to be you you want to be compliant with and also we have tokens right there is like uh different tokens recognized by Mika at this moment so this is something that was actually regulated pretty much in deep so can you tell us something about that like which tokens are recognized and how actually Mika defines them I can talk a bit about that and I think that the important discussion is mostly about stable coins so just just for some background Mika was drafted in 2019. in 2019 the biggest topic besides the bear Market was Libra um much of the work that was done was there to Target icos in 2017 to Target gasps in other words service providers thought uh exchanges and whatnot that operate in the space and then stable coin issuers that were somewhat competing with national interests right so you have the utility tokens which I'm going to skip the definition for a second but you also have asset reference tokens and e-money tokens and then they have requirements for casps now a utility token is a token that pretty much helps a system work without it being a security that's a very broad definition perhaps table you can make it a bit more precise in a second but at the same time e-money tokens are tokens denominated on a Fiat currency that are backed by Fiat that is my understanding the asset reference tokens are stable coins are referencing an asset these can be gold but stable coins these can be other asset reference tokens if you reference an asset then you need to have back backing it you have some backing for it um algorithmic stable coins are not really part of it there is a question about stuff like die um some people think it's gonna have to have reference it's going to be part of the awesome difference lookance a lot of people say that actually others say it's not really part of the regulations we'll still we'll see right I don't think it's entirely clear until we wait a few years would you agree with these definitions yeah so to try to make it as concrete as possible first I agree so if you want to issue some crypto assets what you need to do is to come up with a white paper Mika will tell you exactly what you need to have in that so read that carefully it's actually pretty clear then you need to send the white paper to your National regulator at least 20 days in advance just a notification so you just need to send the white paper you do not need to wait for an approval however that National regulator May prohibit you from issuing that crypto asset so it's always a possibility I think what you're going to see is that those National regulator will give you a template and say this is you know the kind of information that I want to see and if you don't use the template you know you'll be in a in dangerous water so that's for crypto assets if you want to go for the art then what you need here is to send the white paper 20 days in advance minimum but there you do need prior authorization right and you also have some more requirements you need to have two percent reserve and there is a New Concept in Mika if you are issuing a significant art then you need to comply with more obligations you need to have three percent instead of two and so on and so forth and the last one um if you go for the uh for the EMT then you do needs to be a credit insurance or e-money company there you do need also to send the white paper no need for prior authorization but you do need also to meet you know the reserve threshold all of that is detailed in Mika and it's very important that of course you can play with that otherwise the fines are absolutely enormous and if I remember correctly in money tokens are 100 backed they need to be 100 backed a big question for the industry because some of our most important and useful tokens and we're not certain how well back they are um it's a nice way of saying it yeah but we didn't mention that the reserve found that it's a kind of obligatory uh under Mika so even uh if it is backed with that the reserve found them it is important of the custody um on the custody of um the the asset and also the question is how The Regulators will be able to control them the transaction which will be made off-chain uh I think that neither European commission has the appropriate answer and this is why I liked it so much that DLT pilot regime you know because it gives an opportunity um to um to operate on on DLT on the distributed Ledger technology on blockchain this is a real application of blockchain for Securities for for classical financial instruments and for either for um crypto assets to show how they behave in non-regulated environment so that we can translate this from non-regulated environment to the regulated environment after some one or two years using of Mika and this is very important because within of this the pilot regime there will be an opportunity to define the role of regulators like central banks like security issuers or agencies for security markets classical institutions it will enable to learn about the tokenization what it means in the cross-border transactions uh what is the ownership and the custody everything like this which can be in the end of the day through the implementation of Mika and the LT pilot regime also put into the regulation I think the Mika is only beginning um and the mechanisms that are constituted in parallel will be very important to define the real regulatory environment after two three years of implementation understood so we just need to give time also for the technology but also for the regulator in order to clarify everything and actually see as you said whether we actually need to amend something we have written at this moment so yeah and see how it behaves you know um because if The Regulators meet for the first time tokens that can be cross-border um interoperable and we have cross-border it interoperable infrastructure which is called Epsy this is European um blockchain Services infrastructure now we are developing um self-sovereign identity this is a personal data which is very relevant that can be transferred on um on this and this step within the the that Financial transactions as well we will have for example digital identity for the companies within that SSI and it will boost the investment in Europe it will boost the Innovation and smes and we cannot only stick to Mika and to asset reference token or e-money token there will be probably some types of the token that we have cannot foresee at the moment um as DLT pilot regime enables creation of native tokens that are simply based on blockchain or to use financial instruments on DLT just for transactions just for um for that changes that can be made and that are two models that will be tested in the future and also seen how it can be used in the further transactions it's I just want to clarify we talked about the PR but we haven't actually discussed exactly what it is so very quickly the prr is a threshold that pilot regime for MTF safety settlement but yeah correct um that allows for credit institutions or other last institutions to settle assets using blockchain and this is a power regime because it allows policy makers to see all of the things that we just discussed about what works and what doesn't work and how to effectively Monitor and and Implement requirements and people might not like requirements but it's much better to have good requirements and bad requirements and that's the whole goal of what we've been doing and many other people have been doing just trying to ensure that Europe is at the Leading Edge of this to help the industry become what it can be as a global player you know so yeah we're sort of having some sort of a Sandbox regime just for that just to see how well we're actually The Innovation will go and actually to develop the regulation in parallel with the development of the Innovation so that's good also yeah that's good and and it's good because on the national level we will um somehow motivate The Regulators to to start to create that sandboxes to learn about technology and then to set the standards uh on the European level okay we have the standards for a specific protocol but we don't have General standards for cross-border interoperability for transfer for for example for the legislation which could be used in uh specific cases and so on um I can say that UNC fact this is United Nations uh commission for trade developed until now 270 standards but more or less on semantics not uh um we are missing the standards for interoperability or for cross-border transactions and here is very relevant also for that token uh manipulating system yeah yeah speaking of their sections and let's say in regards to the crypto world we also talked about the travel rules so TFR so this is also something not that new because in the banking sector this is something that is this for the past you know decades but how this is going to be implemented in crypto world so what are the requirements there do you want me to go first okay yeah whoever wants so the TFR is the what we've talked about thresholds and I think a lot of people have heard about this uh on Twitter there was a huge bonding about banning transactions over a thousand Euros on chain but that's not really the case remember all of these requirements are on Casp centralized entities that are cost defined by Mika the TFR creates thresholds for the data you need to provide on transactions over a thousand Euros from a gasp to a self-hosted wallet or to another cusp peer-to-peer transactions mean to you to anyone here are not thresholded by any by any means um it could have been much worse I think we all agree there yeah it's uh it's a victory that we've had the ability to allow for some flexibility but really these requirements are the same as as other financial institutions right and as long as we can present information that says that hey this is a less risky operation for a less risky industry then we are going to be at the same risk same rules same principles principle I guess um and that's what the TFR is about it came from fataf we're going to be talking more about that tomorrow with table about how policy becomes policy but yeah that's the TFR and I also passed alongside Mika the Peri also passed we were talking about our victories I think we also need to talk a bit about what's coming um because there's a lot of things happening at the same time anyone else wants to add anything about the tier four no just don't set everything I think all good yeah yeah maybe give a chance to Nayana to speak about the EU funding because they think that's really important and I think we have like five minutes more and we have also Tebow he has some interesting thoughts about some core proceedings especially in the U.S so yes we get some time we'll also speak about that so please Nana just I know xenophon is really excited about the funding and everything so I just need to want to give you some time to speak about that uh actually there are more things going on in Europe um it was two years ago probably it was a kind of innovative action from uh European eif investment fund and European Investment Bank it was a again piloting we are all piloting at the same time some different areas it was a pilot instrument supporting Innovative smes on blockchain and AI um it was uh one time um Equity funding but they are thinking about the repetition of of this funding maybe in different cases and different verticals but what is uh even more important and uh also in the connection uh with what we are talking today is that Europe is uh dedicating a lot of funding to develop that European blockchain Services infrastructure it is important because it works in the in the principle of um okay Central management which is in on the European commission side but node functioning which are in the member states and we are trying to get to onboard another countries as observers so I will invite you um in the later stage uh probably we are going to talk about this tomorrow also to connect with us to put the note in the country and to operate Epsy the third thing is that for the first time last year commission enabled certain use cases to be financed with the European funding so we got a lot of the projects on EU wallet on with a very tough connection with EI that's regulation which is now also in modification then um for SSI so self-saver and identity which is derived from diploma use case it is based on verifiable credentials and also social security pass very relevant for the personal data and Company's data and the third increase that we are developing that trace for you traceability use case which is very based on bottom up approach how to um how to notarize how to trace certain issues on one hand data and documents and on the other hand products and materials and it will have high value added but for this if I say for example uh tend to 15 million for each project is dedicated to this and with these projects we will get real basis for real use of the use cases on blockchain infrastructure check that interoperability create the standards and include as much as ecosystem into this interoperable infrastructure so um Europe is adopting two years working plan it is called digital Europe program I will finish now I think we'll still have time it's almost time afterwards so thank you and we also are in the process of creating um first European institution on blockchain it will be edic European digital infrastructure Consortium which will take over the coordination of all that funding um probably 10 million euro for development of Epsy and for further use cases also financed by member states but it will be possible to participate all the countries which will Express the interest to participate like observers if not full members and then we will have really the opportunity to develop those things together on the way to web3 which is the final point now for example for for example yeah it's really encouraging to hear that because there's a lot of things happening in parallel actually trying to let's say push the blockchain technology into the real world and actually you is behind that and that's really really nice to hear sorry about that uh uh you also said that there are other regulation we need to have in mind something like uh one of the things is actually data act so can you tell us more about that and what should be aware of in in terms of a data act sure so I'm afraid I'm coming with some some bad news because there is not only mecab but way more for you guys uh generally speaking if the law is not clear it's on purpose right so don't assume that the policy makers are stupid and don't know how to write the law so the fact that we do not know whether or not nfts are covered by Mika is on purpose there is probably a reason behind that the same goes for the data act so the data act still draft needs to be negotiated it is as we speak but article 30 will tell you that if you use a Smart contract for the purpose of transferring data in the context of iot then you have to have a back door the kill switch function now where it's not clear is first what is definition of data sharing in the data act it's not actually there so I can make a point that every transaction is about data sharing right I actually know that you want to transact with me that's some information and the data act uh defines iot as being Hardware I know the airplane Commission because I worked with them uh had in mind you know driveless cars sending information so that we understand but it also says that software are iot so pretty much it could be that one way of reading the data act means that every smart contract because any smart contract is about transferring information has to have a kill switch function what is not clear in the data Act is who should be in a position to actually call that function and and stop the contract is that the person who put it on the chain is it the policy maker do we need a vote a consensus all of that is unclear there are big efforts to try to take it out of the final version of the data act but as I speak it is there right so that's one another one is the AI act now the question might be why am I talking about the AI acts and why is it something that I think you should be concerned about and and there I think that's the fact that the drafting is not clear is not on purpose actually and discussion I had with the European commission suggests that they maybe made a mistake thankfully it's still a draft and we may see in the final version what we have but as I speak the definition of AI is basically of course machine learning supervised and supervised deep learning but also expert systems anything that uses statistics so with that broad's definition you can make a point that smart contracts are AI in the eyes of the urban commission and if so then you need to comply with all of the requirements in the AI act and I think it's nearly impossible due to the decentralized nature of a smart contract so again something to to keep an eye on and the final version may actually be better than what it is now but I think we should be concerned with that and so if I may say when the law is unclear then who's the ultimate regulator it's the court and often when we talk about regulation we tend to think about EU institutions but we tend to forget what the courts are saying I just give you very briefly two examples of why we should be concerned with what the courts are saying knowing that's the level of expertise is actually much lower than what you see within the European commission or other institutions in one case a group forced the Bitcoin ABC blockchain the reason is that they wanted to increase how many transactions per block the original group wasn't too pleased with that introduced an action before the course it's the case United American corpse and in 20121 the courts finally told us that the fact of forking a blockchain is not illegal per se but this could have been a different outcome where the courts in different world could have said if you Fork a blockchain what you do is that you divide the value of the original chain and because there is an agreement to do so that's anti-competitive that's an infringement of the Sherman Act thankfully the court did not say that but imagine a different world in which the courts is basically telling all of us you can't Fork a blockchain because that's illegal this would have been a disaster another case ongoing is a case against usdt in which there is currently a case against the foundation for issuing usdte potentially not having all the reserve using those usdt to buy other cryptocurrencies inflating the value of those cryptocurrencies a bubble exploded and some people are suing usdt for three times the amount of what they suffered they estimate that the damage is 600 billion US dollar so they are suing usdt for 1.4 trillion US dollar now I have no idea what the court will say but if the court says that indeed there is an infringement of the law there imagine the impact that taking down usdt because this will be the effect could have on the entirety of the crypto market so I'm sorry to come with so many bad Tunes today but it's important that we keep an eye on what the courts are saying on top of The Regulators because The Regulators will sometimes design the law in a way that is unclear on purpose so that we could apply that in a case-by-case basis but that's unfortunately dangerous and this is why we left you for the end yeah sure just some good news everyone everyone is trying to get the best solution done for the industry when it comes to policy making it's not easy uh just know that there are people out there that are pushing for the interest of all of us to make this an industry that is mature and has the impact that it can have it's not easy it's going to take time if you see things on Twitter don't freak out and tweet the policy makers that's a bad idea you can tweet thibo because she knows everything much better than and clarify he doesn't like that perhaps but that's my suggestion to you all but yeah keep on building see if you can build with some of the initiatives that YouTube has because it's going to make things much easier for us in the future and step by step we will get to where we want to get and remember that people want the best everyone wants the best they just don't know what the best is yet so we're trying to figure that out that's my positive note yeah please do just another positive you know good news for you so actually two years ago vitalik and I published a paper explaining how the law is actually useful whether or not you are crypto Anarchist whether or not you think code is Law and self-sufficient I think this is not the case and this is what we argue in the paper and what I want to tell you is that you may have a decentralized ecosystem all you want it does not exist in a vacuum right you need to rely as you know on existing infrastructures and in fact I'm pretty pretty sure that most of you are on Twitter right and Twitter is not decentralized and so what you see is that those web 2 players may be tempted to use their power against web 3 and this is where you could actually use the law and complain right so competition agencies which is my main fields are trust me very willing to understand what's happening and to protect you from the anti-competitive practices implemented by those Tech Giants we see that YouTube is regularly taking down web 3 channels maybe they have good reasons but maybe not we see that AWS controls you know most of the of the nodes so if you feel that a practice against your project might be an abuse of a power just send an email to your national competition agency they won't come at you because if they were to do that imagine the disaster this will create and the kind of signaling this will send to all of all of the players in the ecosystem so just get in touch with them they will answer you and and who knows maybe you could you know stop the practice get compensated for the practice so we came with all of what the law is controversial and actually creating tensions with what you want to achieve but also use the law because it is here actually to protect you against other players from outside of the blockchain ecosystem and exactly for this uh European commission adopted digital architect to protect the consumers to protect the users to protect everybody from that giant giant platforms using the data owning the data and abusing the data of the people so digital Market act Digital Services act and what is good with with them AI Act is the chair GPT Affairs now nobody from the European commission knows where to start because the law they started to prepare um AI act in 2009 19 as you said uh and there was no chat GPT and now it appeared so this is another problem that will need to be solved how to take into account that uh chat GPT version one two three four uh and uh next versions and what to start to regulate yeah before that it was only um the focus on ethics and on education within that AR act now we have the issue that somebody is replacing a lot of that narrative and content-based activities and this is really the challenge also for the European commission and The Regulators are we good yeah I want to take an Applause for our speakers like really thank you thank you for this I think there are really good proxies for us and for the industry because I I just like for the couple of days I got to know them but really I sent some really positive energy and because they are let's say closer to the regulator I can say that we really have as I said like really good proxies there that someone that is there to clarify how the industry works and what actually which uh regulations and which Provisions would actually uh stop the Innovation so we are all you know fighting for that and fighting for allowing the technology to still develop and I'm really glad to see that there is actually a regime for that and hopefully this will Implement in the in the nearest possible future so I'll I'll close the discussion now and ask you if you have any questions to raise your hand yeah do you have a mic yeah thank you hi guys thank you for interesting panel I'm I'm interested in your opinion and a policy maker opinion of uh for cbdcs like you mentioned the stables and uh I'm just curious um are they gonna allow both of them to coexist or are they gonna make some law and just slowly but surely kill the Sables thank you um if it is for me thank you for the question uh I actually um think that um we had a great opportunity with cbdc's no matter that the Japan started three years ago and it slowed down a little bit the actions the other Eastern countries go on but in any case also cbdc or digital Euro I cooperated with EU buffer within the preparation of the study of the comparison of digital Euro shall it be used DLT regime or um or the standard one and what I think is that um because we know we have a boards on the level of European Central Bank that has been studied both of them both of the possibilities I think that first it can very well replace the cash money okay it is not about only about the cryptocurrency ah the second thing is that uh anonymity that can be used I'm not the advocate of anonymity but in any case it will be possible but the third thing which is um the most important it will definitely have an impact on the transformation of the classical financial sector and for this uh this is a great opportunity classical financial sector will need using if they decide to use blockchain technology and this peer-to-peer communication they will need to face the the current development and they will be forced to innovate to innovate new Financial products new Financial Services to be in step with that Innovative technological processes and for this is very beneficial it can make the process cheaper more efficient processes in Banks or insurance companies or Bank like companies or financial service providers and on the other hand it will result in bigger protection of the consumers of the customers and the third thing is that it will make the asset management system more transparent with that peer-to-peer transaction it will be enabled a very lower cost for the transactions but on the other hand I think that uh it's very important to start to transform traditional Financial companies without that not an intermediary concept of blockchain it will be enabled more quality Financial transactions but also a higher quality of financial services that we can call them auxiliary service that are site service that will be developed also with the focus on the customers of the banks and this is one of the most important thing of cbdc's of um of digital Euro and other Central Bank digital currencies it means the transformation of traditional financial sector and so from the policy making definitely also in Slovenia we will make steps forward we just had one Financial conference on the national level and decide to create a steering a group committee acting like like sandbox but to go step by step in the digital transformation of the financial classical financial sector yeah just a quick comment so if I look you can't hear me anymore no yes we can yeah no it works okay if I look at what's happening in other fields of the law so not crypto related stuff there is a concept that is getting traction that's one of GPC great power competition if you've never heard of it that's a concept coming out of geopolitical studies and it's getting traction because it's actually trying to understand the Dynamics between countries and how the law is actually used as a weapon against other countries right this is huge in ipe privacy competition if you can actually put yourself in a position where you can argue to your government or your economic zone that you can be useful in this concept of GPC I think you will be in a very nice position for that reason to answer your question I think it's absolutely out of the question to regulate the cbdc out of existence because China is doing it and other part of the world are doing it so there are for that sole reason despite all of the good arguments we can make trying to push for cbdc and if you can play a role for that again the low will become suddenly the Ally and the policy maker will also be so check it out the concept is again great power competition there is a lot there for you to to read and get inspired about and I also want to very quickly say listen the policy is now clear about stable coins right the only ones that can regulate actually they can kill stablecoins is the market if you don't use table coins they are gonna die if you use stable coins they're going to keep existing so that's pretty much it the market decides you decide if stable ones are going to exist or not that's my two sons what are you buying they can they can do many things and you're right simply disease are in tool it can be positive and negative too but in you do you expect uh us the usabilities in a more positive way or a more negative way compared to for example China so it's a competitive thing and and great power competition is very important it's a tool that we cannot not make it's something that we will have to make and it's going to be done properly better most likely better here than it's going to be made in other jurisdictions and ultimately stable coins and your use of stable coins as a market participant is going to be up to you if you and all of us you it's genetic you right it's not just you specifically but if if all of us stop using stable coins or see if that say because are not worth it they're gonna die if not if there's a use for them and I think there is a big use for them they're gonna keep on thriving and existing even in an infrastructure that includes cbdc's as part of the of the cash alternative system and believe me I'm a classic crypto guy right so I am and get the skepticism but stable coins are going to survive as long as we use them and that's it okay we have another one over there thank you guys for the uh for the great panel uh I've got a question about uh something Tebow mentioned uh tipa mentioned something about a fully decentralized protocol not quote not existing in a vacuum and uh having written a paper with metallic on the subject so uh I wanted to uh have two sort of things in my question number one is uh can you just say the full name of the paper for the audience so we can all go through it and second could you sort of summarize uh what makes a decentralized protocol uh attached to regulations is it the on off ramps that users end up using in uh conjunction with that protocol why wouldn't a fully compliant business eventually just go fully decentralized and go out of scope of something like Mica and just become uh just go go into the black market so to speak yeah okay so the name of the paper is uh blockchain code AS antitrust the point we're making is that the codes can actually the code of a public permission is blockchain in that in that in that specific case could actually be used to fulfill some of the objective we are trying to usually reach with the rule of law uh the the paper is open access um to your question so this is not what I what I meant it's a very interesting question what I meant is that you know whether or not your project is let's say decentralized on the Spectrum right so whether or not you indeed can can take action for yourself without having to ask for prior authorization which would be my definition of decentralization if for the projects you function on a technical basis and to be adopted you need to rely on let's say web to take giant Services then maybe your project is decentralized but you know there is a choke point over here and the law can help but to your question um you could make a point that indeed the more decentralized the harder and I'm actually you know of this opinion it is to regulate it now what I get when I talk with top policy makers is that if you can't if they can't regulate those decentralized ecosystems and projects what they would do is that they will regulate all of the players around it who are not decentralized and they would say to those people I was told by you know top officials well we'll put you in jail if you actually interact with the fully decentralized project and this will be the end of it because you will actually put it this time around in the vacuum and people won't be willing to interact with a fully decentralized project because it is not regulated so maybe this won't be regulated you know end of the day if you are not regulated but no one is using your project well what's the point so I hope I answer your question and this is what I get from you know again those policy makers I'm not saying I agree it's good but this is I think what they will do you can see this in practice with privacy coins who are gradually going to be set in a vacuum away from all the exchanges it's going to be difficult for them I think and it might not be different if they are decentralized but not Dows specifically but you'll see them quarantine in a Black Market Zone I guess do we have any more questions somebody said no [Laughter] he was right um thank you guys and I'm sure I speak on the behalf at least those 50 percent that said they are not very informed on this topic and thank you very much for being so insightful and interesting and one big round of applause for all the panelists level guys