Bitcoin in the Fed’s Boardroom, and Musings About Progress

Holy cow, what a whirlwind!  Here are some amazing happenings in the bitcoin/blockchain space since I re-engaged 8 weeks ago following my post-Wall Street garden leave:

  • Federal Reserve fintech conference for central bankers (6/1):  ~100 global central bankers and bank regulators gathered in the Fed’s boardroom to learn about bitcoin & blockchains at the Fed’s conference, “Finance In Flux:  The Technological Transformation of the Financial Sector,” ahead of the IMF/World Bank meetings.  Adam Ludwin, CEO of Chain, demonstrated how bitcoin works by donating bitcoin to Wikipedia during his keynote speech.  Surely that made history as the first time a bitcoin transaction originated from the Fed’s boardroom (#probably)!  Four of us blockchainers were lucky to visit Janet Yellen in her office—we discussed the interesting art on her wall, but unfortunately that’s all I can share!  Photo of conference attendees with Yellen is below.  The audience could not have been more engaged!

  • UN identity conference (5/20):  the UN held a conference called “ID2020” to discuss how blockchain technology can give people self-sovereign identities that no human trafficker could ever erase!  Microsoft, Consensys and Blockstack Labs subsequently announced a joint effort to build an open-source, self-sovereign identity blockchain.  Again, the rapt audience of policymakers found much common ground with us blockchainers!
  • Regulator engagement in blockchain has spiked among bank, securities and insurance regulators, as well as central bankers.  What an honor it has been to engage with multiple regulators about why I think the financial system is still too leveraged and how blockchains are a critical new tool to fix this—and enable them to do their jobs better!
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Silicon Valley meets the Fed…in Vans!

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Caitlin at the Eccles Building!?

(Here’s just one example:  four U.S. national banks have true exposure from derivatives that exceeds their risk-based capital—just from derivatives alone (see OCC table below).  No one knows how much collateral has been double-counted in these netted numbers, which means the real exposure is almost certainly higher.  Translation:  depositors and/or taxpayers are at risk here.  Blockchains would enable regulators to track all of this in real-time—but if the industry adopts blockchains that store such critical data off the chain, you will have missed your opportunity to harness this powerful tool!)  Open offer to U.S. bank regulators whom I haven’t yet met—let’s engage on this topic!

  • Blockchain start-ups are now working on production level projects, moving beyond proofs-of-concept in more use cases than I can count!
  • More S&P 500 companies (outside of the financial sector) are starting to dig into blockchain projects for the first time!
  • More tech giants got involved in blockchain for the first time, joining those that have already publicly disclosed their presence (Microsoft & IBM)!
  • SingularDTV launched:  the media world has a new blockchain-based entertainment organization—a creator-driven/controlled competitor to Netflix & YouTube that’s administered via smart contracts!  It cannot be censored and adheres to strict transparency to ensure that creative rights, revenues & royalties remain with content creators.
  • Education about blockchain continues to spread, and I’m doing my part!  I joined Microsoft’s panel at Consensus 2016 to speak about corporate blockchain adoption; spoke about how blockchains will facilitate secondary market trading of corporate bonds at Euromoney’s Electronic Bond Trading Forum, keynoting with Symbiont CEO Mark Smith; and will speak this Tuesday about structured-finance blockchains (and the Delaware blockchain initiative) at the industry trade association (SFIG) symposium.  Trust me, folks—what Delaware is doing with blockchains will fundamentally change how securities are issued and serviced within the next 2-3 years—and no sector will be more impacted than structured finance!
  • More BIG announcements are forthcoming in the space…stay tuned!

A lot of big things have happened over the past 8 weeks that I applaud but in which I haven’t been directly involved.  The DAO launched with more than $150 million of crowdfunding—it’s the first-ever decentralized autonomous organization, which means it’s controlled directly by its stakeholders rather than a management team/board of directors.  Plus, a highly accessible book about blockchains, called “Blockchain Revolution,” was released.  Read it if you’re curious, but beware—you might catch the blockchain bug!

A lot of big things have happened over the past 8 weeks that I applaud but in which I haven’t been directly involved.  The DAO launched with more than $150 million of crowdfunding—it’s the first-ever decentralized autonomous organization, which means it’s controlled directly by its stakeholders rather than a management team/board of directors.  Plus, a highly accessible book about blockchains, called “Blockchain Revolution,” was released.  Read it if you’re curious, but beware—you might catch the blockchain bug!

“I’m working harder than I’ve ever worked in my life,” one CEO of a blockchain start-up said to another CEO and me two weeks ago.

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Blockchains: making financial services antifragile!

All three of us happily concurred, exhaustedly!

It’s big, what we’re working on.

Funny thing, though—I’m not actually working yet!

Yet, I’m busier than ever, and having a blast!

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Source: OCC

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