Paul Brody is Global Blockchain Leader in the EY Vocational Services Company and co -author of the 2023 book, Ethereum for Business: an ordinary English guide for use cases that generate asset management returns to payment to supply chains. He speaks global funding about the influence of Blockchain technology on everything from routine payments to border transfers to the future of banking and the roles of the financial manager and the industrial secretary.
Global Finance: If we look at what people practice on Blockchains today, this is not primarily Bitcoin but Stablecoin, a type of cryptocurrency designed to maintain a stable value over time. Does this surprise you?
Paul Brody: The ability of people to push each other in dollars is of great value. And to give you a feeling of the stability of the dollars of large coins, the ETHEREUM BLOCKCHAIN system last month in the amount of $ 2 trillion of Stablecoin payments, and more than 99 % of them were in US dollars.
GF: Who uses them already?
Brody: To a large extent the most popular initial use of Stablecoin in emerging markets. Countries that do not suffer from independent central guarantees often face high inflation or even excessive inflation, so the demand for the US dollar is really high among the local population.
GF: And it is used in transfers across the border as well?
Brody: Many traditional systems across the border takes days, and they cost a good amount of money. If both participants have smartphones and encrypted currency accounts, you can send dollars across the border within almost a second to almost nothing.
GF: Recently, the US Treasury seems to say that the United States does not need a central bank’s digital currency (CBDC), any digital dollar. Stablecoin can be used. Is this your reading too?
Brody: What we need is a well organized stablecoin. We need some regulatory guarantees to ensure that if you say that there is a dollar on the chain, there is also a dollar in the bank account to support this, or what is equivalent to the assets.
CBDCS was floundering, mostly because central banks really don’t know why they did it. I have spoken to many central bankers, and they have no idea why they did this other than Facebook.
GF: How will the Blockchain technology change things for financial managers and the Secretary -General of Corporates?
Brody: The financial manager and the jurists have some questions to ask themselves: Am I connected to the encryption system and blocks? Can I make Stablecoin payments? Do I have to include bitcoin in the corporate cabinet, along with the bonds in US dollar? Moving forward, can I automate my work contracts? My purchases? How can I run my work operations more efficiently? And if the customer wants to pay me in Stablecoin, can they do this? The answer to most companies today is, no, they cannot.
GF: If you are a stablecoin source, how to make a profit for this work?
Brody: You can earn money with transactions, and perhaps your float on the interest rate. But this depends on interest rates. If the rates really decrease, it will be a painful company. The drawings are very small because it is a competitive environment.
GF: What does all this mean for banks to move forward in general? Will you reduce its importance?
Brody: It will change the role of banks, and it may reduce it. This depends on how the bank does its money.
Banks that make money processing credit cards are most at risk because Blockchains represents a new and more efficient way to process transactions. You pass your credit card in a store, and do not see the cost of payment, but it is real and it is large, like 3 % to 4 %. International wire transport operations are usually fixed fees, at $ 50. Stablecoin transformations do not cost almost anything compared.
But if you are a regional bank that makes a lot of companies financing, Blockchain may not change your business a lot.
GF: What about the main nursery banks, such as Bny Mellon, Jpmorgan, etc.? Are their work in danger?
Brody: The main nursery banks are in an interesting place. They have a lot of assets, and if you have assets and control of those assets, then you are in a position that allows you to help people distinguish them.
So, this new technology is definitely a threat, but it is also a great opportunity. At the end of the day, if you have assets and are now helping people coded or manage them in different environmental systems, this represents the added capabilities of your work.
GF: In your book Ethereum businessYou can highlight the importance of Blockchain smart contracts. With these, one can determine not only dollars but all kinds of things, even cups of coffee. Why don’t you use more smart contract companies?
Brody: The answer is that Blockchains does not yet have a built -in privacy, and this is a big problem. But it is fixed. It is like the first days of the Internet, when we had no encryption. Most companies do not feel comfortable in doing business without privacy.
For this reason, the private Blockchains has never succeeded. If Blockchain companies in particular have, they believed that they guarantee privacy. What they did not realize is that inside that hidden garden, there is no privacy. If you are a large company and have all the suppliers in your Blockchain, you can still run your purchases there, because the Supplier can see the amount you pay to the supplier B, as well as the amount of your request from it.
GF: How deep is the banks in providing Blockchain services?
Brody: Each one bank will provide a kind of DLT service (the Distributed Professor Book Technology). You have shares, you have bonds (to serve customers), and now you can add encryption. Other institutions may send criticism to the Ethereum address to you, instead of preparing a negative conversion to a bank address. There will be new versions of money transfer and payments, some of which will be completely developed.
GF: The skeptics ask when they will see the “killer application” from Blockchain: In the sense of an application used globally, similar to what did the email of the Internet?
Brody: Stablecoins is the deadly application, and it is the application that gets everyone in the chain. The Stablecoin Market is about to get a crazy competitive, and will be available to the return that carries the return for the return.
“The financial manager and the secretaries must ask themselves: If the customer wants to pay me in Stablecoin, can they do this?”
GF: Everyone in all, is Blockchain suitable innovation-useful but not to destroy the Earth-or is it something that mainly changes global financing?
Brody: It will not be limited to changing global financing, but will turn all world trade.
Blockchain will become the plumbing of all B2B transactions.
The reason that it is very transformed is that money, contracts, and “things” (i.e. goods) were all in different systems. Companies are still spending huge sums to reconcile money, things and contracts. For example, the large company costs about $ 100 to pay an invoice. The reason is that someone in purchases should say, I got this bill. Does it match the purchase that you sent? Are the conditions of the bill and the purchase order coinciding with the terms of the contract? and so on. Imagine in the future where the money, things and the conditions of the contract are all in the same digital system and all reconcile with each other. This is done immediately. In 10, 15 years, the whole process will be universal and invisible. The background, right?
