Day 1 Highlights Of The Singapore Fintech Festival

Blockchain. Cryptocurrency. DeFi. These are the terms that were echoed continuously throughout panels, interviews, and workshops on the first day of the Singapore FinTech Festival.

Happening from the 8^th till 12^th November this week, CoinPasar had the pleasure of joining the 6^th iteration of the festival where global experts gathered online and in-person to discuss the future of finance and technology.

With this year’s theme being about Web 3.0 and Decentralisation, the conference events touched heavily on distributed ledger technology (DLT) and decentralised infrastructures in general. Day 1 revolved around discussion about designing financial services on Web 3.0, and we were thoroughly absorbed by the debates happening virtually. Here are our choice highlights of the day.

Getting to know Web 3.0 and Decentralised Finance with Balaji Srinivasan

Former Coinbase CTO and General Partner of venture capital firm a16z Balaji Srinivasan opened the event by defining the basic concepts of Web 3.0 and decentralised finance (DeFi) with Chief FinTech Officer of MAS and moderator Sopnendu Mohanty.

Balaji asserts that the world would soon be split into two distinct groups of decentralised and centralised finance economies, with proper economic policies being essential in helping countries adopt decentralisation instead of state subsidies or physical infrastructure.

Would banks be relegated to the role of asset custodians with the onset of blockchain and Web 3.0? Balaji was blunt in his response. “Every function of a bank can be rebuilt on stablecoin by a kid in India, or Nigeria, or Brazil, or Japan, or Singapore, or even Eastern Europe. Anybody now has root access, and so because of that the privileged positions that banks used to have is now gone.”

Building Trust and Innovation with Web 3.0 Market Infrastructure

With several clients as an American corporate investment banking company at BNY Mellon, Senior Executive Vice President Roman Regelman emphasised trust and innovation as being crucial when transitioning towards an ecosystem that allows a new market to thrive. With the need to retain customer trust while moving towards digital assets, BNY Mellon invested in blockchain security providers like Fireblocks to secure digital assets while taking a gradual approach to change.

On the other hand, Microsoft Executive Vice President of Business Development, Strategy and Ventures Christopher Young believes that the move towards Web 3.0 is a natural process driven by the trends of ubiquitous cloud access and AI technology. As such, democratisation of innovation occurs where individuals and small groups have more control of assets and can tap on previously inaccessible opportunities, which in turn could lead to non-traditional partnerships such as banks partnering with gaming companies on NFT projects.

Digital Currencies and Stablecoins as the missing puzzle

With well-known names like CoinHako’s CEO Yusho Liu, Visa’s Head of Crypto Cuy Sheffield, Director of Temasek Kevin Lim, and Crypto.com COO Eric Anziani brought into the same space, the panelists sought to share their views on the adoption of cryptocurrencies and stablecoins in Singapore.

While Centralised Exchanges (CEX) are often argued to be paradoxical to the idea of decentralisation as a whole, the panelists agreed they maintain an important role in making cryptocurrency accessible and bridge between traditional finance and digital offerings.

Touching on the topic of stablecoins in wholesale banking, the panelists affirmed that it is a disruptive force for the banking industry. Kevin in particular champions the notion that wholesale and retail banking being mutually exclusive would soon be moot, while Cuy makes the case for stablecoins being used effectively with VC-backed startups using stablecoins to fund their company activities, in turn making it easier for non-crypto companies to hop onboard easily as they grow.

Shaping the Future of Financial Services with Decentralised Finance

With 1.7 billion adults having no access to financial services and products worldwide, blockchain and DeFi is being touted as the answer for this group to be connected. How will that be achieved? That’s what these DeFi innovators, SingularityNET CEO Ben Goertzel, CapGemini Executive Vice President Sudhir Pai, Lygon CEO Justin Amos, and Decentralised Marketing Chief and moderator Anjali Kapoor, discussed during the session.

While the crux of DeFi is about giving individuals control of their own money, the participants also argue the case for other essential points of the technology. For Ben, the AI used to regulate financial activities is in its early phase, and the technology eventually has to surpass the AI used in centralised finance. Sudhir believes that there is a potential for new asset classes to be created, while Justin argues for speed and removal of fraud as the motivation for DeFi.

DeFi adoption is on the rise with a 900% increase since the first half of 2020, yet the panelists agree that DeFi still needs to address areas such as education and ease of use. Traditional finance institutions may seem to stand in contrast with the idea of decentralised money, but they are essentially important collaborators in growing the DeFi movement globally. What’s more, new mechanisms and financial instruments will be key to driving the growth of DeFi as a whole.

Nevertheless, an ageing bank programming code in current institutions, slow uptake of new technology, and lack of consumer protection remain as hurdles to making DeFi fully accessible to all. Yet the panelists makes it clear we are still in early in the DeFi game, and tapping on current infrastructures like networks and telcos are the next step of DeFi for users to tap into the global finance economy.