It’s A Wrap! Top Highlights From The Singapore Fintech Festival

The last few days of the Singapore Fintech Festival has been a flurry of engaging debates on the future of blockchain, cryptocurrency, and central bank digital currencies (CBDCs). The first day of the festival touched on the topic of designing financial services, while the subsequent days delved into building financial services on Web 3.0 and sustainable financial services.

With the conclusion of the virtual conference, we look back on some of the key highlights revolving around blockchain and Web 3.0.

The Future of Money, Finance, and the Internet with Ravi Menon

Day 2 of the event kicked off with an opening speech by the Managing Director of the Monetary Authority of Singapore (MAS), Ravi Menon. Throughout his speech, he acknowledges that the rise of digital assets like cryptocurrencies, stablecoins, and CBDCs have challenged the traditional two-tier structure of money.

While he stresses MAS’s continuous stance on cryptocurrencies as legal tender, he agrees that the technology can’t be ignored as it can facilitate cheaper and faster cross-border payments and reduce cost on system operations. To tap into its benefits, the country had launched Project Ubin 5 years prior and are currently underway in equipping industry partners with competencies for digital Singapore dollar transactions under Project Orchid.

Web 3.0 Conversation with Kevin O’Leary

Investor and “Shark Tank” star Kevin O’Leary shared his thoughts with Sina Nader, FTX US Head of Partnerships, on how decentralised finance (DeFi) will transform finance as a whole. While he initially scoffed the idea of cryptocurrencies as an unregulated wild west, his exposure to DeFi made him quickly realise its tremendous potential.

Yet one thing that holds DeFi back is the element of compliance from both sides. Regulators are now only starting to find suitable ways to regulate the technology, and cryptocurrencies remain an unknown and untapped potential by traditional finance institutions due to compliance concerns which causes a chicken-and-egg problem.

Nevertheless, Kevin sees cryptocurrency, blockchain, and DeFi as the key to accessible, frictionless finance. “There’s no turning back on Decentralised Finance, there is no turning back on cryptocurrencies, there is no turning back on bitcoin, or Ethereum, solana, or anything else. These things add so much value. It is now at the hands or feet of the regulators to determine the timing by which these get adopted. But it is only a matter of when, not if, in my view.” Said Kevin.

And a good place to get started in DeFi according to him? Start education yourself online and get hands-on experience by dabbling in it.

Web 3.0 Conversation on the Convergence of Media and Finance with Mike Shinoda

While COVID-19 has cancelled live performances for Linkin Park member Mike Shinoda, he had tried hard and got far by turning to other channels like Twitch. But the lockdown also helped him discover another love – NFTs. Between releasing his single “Happy Endings” as an NFT and helping other creative individuals discover the NFT space, he shared with Tezos APAC Head of Marketing and Operations Katherine Ng how the technology has benefitted the creative industry as a whole.

Throughout the discussion, he strongly believes that the idea of validating ownership through the blockchain and giving value to a digital item not only open opportunities for creative people by creating financial support for themselves, but it encourages a tighter community around an artist and allows them to continue doing what they love to do.

Reiterating that artistes are tired of being treated as monetised products, Mike is certain the idea of owning one’s data in the world of Web 3.0 resonates with creative individuals. NFT will become an enabler for musicians who wants to be independent of the current music economy, and it reinforces the notion that their creativity is worth something in an economy where they are expected to give images and videos freely.

How does he see the concept of music evolving? “I will go wherever the fans go. So wherever we congregate, I feel that is often a community decision. The idea that we share space online in a non-physical manner already exist, so we are going to develop more exciting ways to do that.”

Building the Value Exchange Layer of the Internet with Vitalik Buterin

CEO of financial TV channel Real Vision Raoul Pal sat down for a virtual discussion with Ethereum founder Vitalik Buterin to find out how the network will continue to evolve with the development of Web 3.0.

Touching on hot topics in the crypto space such as DeFi, NFTs, Decentralised Autonomous Organisations (DAO), and the metaverse, Vitalik believes that these subcategories of the crypto space still have a lot of room to grow. DeFi, for example, has seen a sharp rise in the number of platforms available across Ethereum and other blockchains, which in turn will get general users to be more comfortable with using them. As decentralised finance starts to overlap with other areas like NFTs, it can help to break down the rigid ideas of crypto categories being siloed into financial and non-financial areas.

Speaking of NFTs, Vitalik believes that the crypto-native asset will eventually make the leap into the physical world by representing assets like real estate and intellectual property rights, and this will open another avenue of opportunities. Using the idea of real-estate tokenisation, he states that fractional ownership allows a property to be owned by a group of people, in turn reducing the barrier for real estate assets.

And what about Decentralised Autonomous Organisations, or DAOs? The Ethereum creator sees it as a platform that makes it easy for groups to build new constructs which were not available previously. As DAOs accelerate turnaround times and reduces the cost of starting projects, he is certain that organisations will becoming less standardised and start being tailored to different situations.

With blockchain adoption moving twice as fast compared to the internet adoption era, Vitalik is certain that Singapore has what it takes to ride the new wave of innovation. With its status as a financial hub, the leading authorities can take the opportunity to be a trust anchor and support ground-level initiatives that wants to apply blockchain and NFTs to economic situations – these could include fractionalised use cases for property, boosting the revenue of local artists with NFT, or creating DAOs that fund cultural works.

While the crypto direction may seem at odds with the authorities at times, he believes that the government and crypto groups can create new rules together that allow change. “There is room for all visions, but it doesn’t need to be about getting rid of current establishment. Instead, it is about creating more fair ways for people to interact with existing institutions.” said Vitalik.

And what is his favourite part of the crypto space right now? That will have to be blockchain scaling, zero-knowledge proofs, and the future of DAOs.

Polkadot’s Role in a Web 3.0 Future with Gavin Wood

In his interview with moderator Manisha Tank, founder of Polkadot blockchain Gavin Wood puts forth the notion that blockchain’s trustless nature is critical in a changing world where trust is not always present.

Elaborating further on the topic, he feels the idea of autonomous systems with trustless mechanisms is a novel idea since we have always assumed a central system to be good. And that’s what blockchains like Polkadot is trying to change with its system of main chain and parachains. Delving further into the workings of the supposed ‘Ethereum Killer’, Gavin explains that the number of validators will scale up as Polkadot grows, and its property of interoperability and scalability allows the network to communicate with other blockchains in a secure manner while rapidly increasing transaction speeds.

Touching on the difference between Ethereum and Polkadot, Gavin emphasised that despite having smart contracts to improve its utility, Ethereum is ultimately still centred around Bitcoin and the idea of transactional executions without any consideration of user interaction. In contrast, Polkadot aims to deliver user-positive decentralised applications without revolving its ethos around Bitcoin and mechanical transactions.

An Economist view of CBDCs Gaining Global Acceptance

The buzzword among banks and financial authorities is about central bank digital currencies (CBDC), but the details remain vague when it comes to the implementation roadmap. Professor Bernard Yin Yeung spoke to BIS Economic Adviser and Head of Research Hyun Song Shin and INSEAD Professor of Economics Antonio Fatas to understand the reason behind the slow progress, and what needs to be done further.

As Head of Research, Song Shin is positive that CBDCs is the way forward even with current working payment systems as the technology answers a three-fold imperative. It reinforces the network effect of data and interoperability; it guards the system against illicit activities; and it acts as a social contract between people and financial authorities. While the idea of cross-border payment hinges on cooperation between countries, CBDCs will not erode currency sovereignty nor will it affect the current pegging to the US dollar.

On the other hand, Antonio prefers to frame the rising importance of tech and CBDC inclusion in payments as a socio-economic issue, rather than just seeing CBDCs as another form of asset. Payments are now more integrated than ever, and they can be used on different kinds of platforms including those of social media. While the technology may give banks the infrastructure to compete with tech upstarts, it could also create an unintended consequence of giving tech giants more power than banks as well.

What does the future look like in the next ten years? For Song Shin, he’s keen on observing DeFi’s response when they are faced with economic issues, while Antonio hopes to continue exploring the growing complexity of economic activities as they become increasingly intertwined with technology.