Hi, it's Conor Svensson here, founder and CEO of Web3 Labs.  This is a conversation I had with Julio faura, co-founder and CEO at Adhara.  Julio is a technology innovator at heart having started his career designing microchips after  he obtained his PHD in Computer Science before obtaining a MBA and heading up R+D at Santander  bank for a number of years which he ultimately left to help found Adhara. In our conversation we  cover a lot of ground including how he approached innovation at Santander and managed to get them  looking at blockchain innovation opportunities over five years ago. We also discussed how he sees  the wholesale money markets evolving off the back of technologies and initiatives such as central  bank digital currencies, his involvement in the Enterprise Ethereum Alliance at its inception  and, of course, his journey with Adhara. Given Julio's deep knowledge of technology,  finance and innovation, I found this conversation fascinating as he really understands the inner  workings of the money markets and how blockchain can benefit them. I'm sure you'll find this  conversation as insightful as I did. Julio, it's an absolute pleasure to have you here today.  My pleasure. So we hosted you recently at an Enterprise Ethereum Alliance Meetup and  you described how through your company Adhara, you've been able to marry your technical passion  with finance. Before founding Adhara you were a head of R+D at Santander, when did blockchain  first appear on your radar and at what point did you really start to take it seriously?  Gee, this is back in time, I think this was 2014, I think it was, maybe late 2013. At that time  all the talk in the industry was about bitcoin, that was a new thing, and I think I was one of the  first people, at least from banks, interested in actually the potential of the blockchain  technology underlying bitcoin. Now it seems quite obvious but at the time most of the things, most  of the talk, was about how bitcoin, crypto assets and trustless assets, are going to disrupt banks  and all that. But, I did see the the potential for blockchain technology to to serve right as  a transformation vehicle for the financial industry. It's funny because I think it was  in 2014 in the summer, I remember, I'm an MIT alumni right, and I was advising a startup in MIT,  so we commissioned a small study to actually think about the potential implications of blockchain  technology for banks, this was 2014. So that that was picked up by the press and they got  a very serious call from our PR department at Santander because the words Julio, bitcoin and  Santander appeared in the headlines in Phoenix, everybody was like 'Wow, Santander is going big on  bitcoin!' It's like 'No, no, no, no, no, this is not about that!' So that was fun, that was 2014. But certainly as well, Santander was one of the banks that really stood out as making  headway early on and clearly there's a reason why, as you talk about here, but  as you said, you saw that there were applications beyond the cryptocurrency side. Was that  because you'd been spending a lot of time in the years prior really looking at areas  like settlements and payments and these sort of areas, that now everyone talks about, but  in those earlier days it must have been quite a different perspective?  Yeah, so at Santander I did start within capital markets and investment banking. I was not really  specialist in settlement items or in capital markets, I was more like  the chief of staff. Previously, I had worked for McKinsey for six years so  it was more like a top management consultant type of topics but I'm an engineer at heart,  using computer science so I've always loved technology in a very practical manner.  So I was involved in money, I was involved later on in operational items, in nineteen operations.  We used to do a lot of integrations and a lot of technical work on the banking side. So, yes,  I did have the opportunity to experience the inefficiencies and the issues there. Santander  is an example of a bank that is built on an independent subsidiary model which means  that you have a lot of different entities that have to connect to each other somehow.  Connecting banking systems is a very difficult thing right, and it's a big it's  blocker of innovation. Banking systems have been built to be secure, not to be interactive.  Whenever you want something to be secure, what you do is you put it in the safe  with core banking systems, and I'm very happy it's that way because it's our money,  safe keeping right! So when you try to use these things to actually do new payments or capital  markets applications but you need all these systems to talk to each other it's very difficult,  you need messages, you need reconciliations, you need all kinds of cybersecurity mechanisms to make  sure that all these things are secure, you need to treat authentication in very, very serious terms,  right? So suddenly the idea of having a shared computer, a shared computing paradigm like smart  contracts on top of blockchain was really amazing because you could essentially connect once to the  shared platform and then start building things to model these workflows between all these different  entities and branches and clients and all that. So the idea of having an interactive shared computer  or computing paradigm on top of which to develop all these things, starting with digital assets  but then going into applications, was very, very appealing. It's not like I have been  suffering a lot of operational issues at banks but I did know them and that was a very,  very interesting reason to explore the space. As you say, these problems of  integration and security that it solves very well. So back then, you reference smart contracts, was  Ethereum on your radar at that point or was it still more about bitcoin as well? I know that the  network didn't launch till the following year, but it was obviously the white paper was there  and people were talking about it. No I didn't know about the the white paper. I'm very practical. I  never had the time to read these things or to do a lot of research on the stuff. So at the time,  yes we were looking at bitcoin, never really deeply from a technical perspective, I mean I  did that on my own. But the whole construct, you know that bitcoin does have a smart contract but  they're very primitive, the type of things I can do with that are very, very simple. At that time  actually, we're talking again 2014 late 2014, Ripple was very promising. Ripple technology  that was a lot about tokenization of assets, they were all IOUs at the time, I'm sure you remember,  and then they were talking about a smart contract. There was something called  Codius that supposedly was going to be a smart contract capability,  Ethereum type let's say, right on top of that - that never happened and we did try to deploy  that technology privately at Santander, it was open source at the time. That's before Ripple  pivoted into the new technology architectures that they tried later and definitely before they  focused so much on XRPs and so on. So just talking about technology, we tried to use that. It was  it was impossible, it didn't really work, it was not fit for that purpose. So then Ethereum, as you  said, appeared a little bit later that was 2015. It was difficult to use it in the beginning for  permission use cases because this was the public construct, which was amazing, it's a work of art.  So we did have a lot of fun adapting that to do our own like permission networks and  all that. That is really what fuelled all the potential that we started to see and very soon,  we started to share our experience with other enterprise actors, other banks and so on,  and we ended up funding the Enterprise Ethereum Alliance with the purpose of  fostering the creation, or the adaptation, of this technology for enterprise users  particularly in the financial industry but also beyond the financial industry. That's where  things started to get more and more interesting progressively over the course of the next years.  Yeah, and I certainly wanted to come on to the Enterprise Ethereum Alliance. So you were the  original, well you were the Chairman there for a period of time before founding Adhara.  More from an enterprise innovation perspective, there's some key things that happened at Santander  that many other organizations probably could have tried to do similar things if they'd really been  thinking with enough of an innovation mindset. As you said, you got to this point where you were,  no doubt, getting a degree of business interest in the underlying technology but then also managing  to collaborate with other financial institutions and companies that ultimately were founding  members of the Enterprise Ethereum Alliance. How was it that you were able to take this thing, that  to most people is unheard of or they just they've heard about bitcoin maybe, and actually convince  them that it's worth spending time looking at this technology even though, at that point,  there wasn't really products and services - it's nothing like it is now - right? So how were you  able to do that and how are you able to reach out to other banks and all these sorts of things? Yeah, I don't know. I would say, it's mostly Santander's merit, Santander's a great place.  It's really a great place where if you want to do something, you can do it. I mean  it's a big bank, we have all kinds of procedures and compliance rules and all these things, but  if you really believe in something you can find people that will help you. It has to  make sense and you have to have the right sponsorship and that sort of thing, but  you know it is possible. I know many other institutions where there's just so many Chief  Prevention Officers along the way. It was also very much on the agenda of the top management,  that would listen and also I was quite senior in the organization so I kind of earned my right  to propose things and do things provided that I would not break anything! So it was good. Also,  I did have the possibility to understand and even fiddle with the technology myself. In fact,  the first little platform for tokenized money and cross currency payments use cases, the first  piece is actually a program by myself. So I was suddenly reporting to a Senior Vice President who  was reporting to the Chairwoman. I was writing the code on my computer and going giving demos  to these people and to the board at that kind of level. So the idea of having people with knowledge  and with the passion to make things happen quite close to the top management, I think  that's a very good enabler for this type of innovation to  happen, right? I was really privileged to be in that type of situation and I think  Santander was really a great place to do that. In terms of reaching out to other institutions,  well everybody was looking around, there was a big call of attention with the appearance of bitcoin.  Later on it was even more so when when Libre came up into the market, I know that's a lot  farther away than the line but yes, it was a huge, huge call for attention as well. So people  got the importance of getting into collaborative mode because it was, a whole financial system was  going to be under attack, not really a competitive situation. So people started to be quite enthused  about this idea of competition, like lets cooperate to build the industry utilities and  the different infrastructures that we'll need in order to be able to carry on our jobs and compete.  There are many other examples. On that thinking for example, it was what was behind the creation  of the Utility Settlement Coin that later became Fnality. This was three of us in Deutsche Bank  and UBS and Santander, we then invited people from the Bank of New York to do that. And again,  nobody would see this as a competitive thing or as a collusion thing or anything like that.  It was more about collaborating to create utility type infrastructures that could be used by the  industry in order for everybody to first of all get efficiencies and second, be able to to  compete and develop new businesses and products. It was a great time and then, I'm not seeing a  big change on that frankly in the past years. I think collaboration is still strong,  it's growing stronger and stronger. I think technology is also a good enabler of that,  now it is a lot cheaper to do these things. Now you have cloud computing, most of the enterprise  blockchain technology like Besu, Quorum, all these things, they're open source and they are quite  reasonable and quite cost effective to use and now you have good people providing enterprise support  whenever you want to use it. So when there is not a big need to put a lot of investment money into  creating these things, that also helps a little bit and also regulators are quite happy with  that happening. So I think that the climate is quite good for collaboration  so that's more or less what I found. That's fascinating to hear that, as you say,  there was almost a recognition all those years ago that this technology is going to be so impactful  that everyone needs to pay attention to it and there was that sort of awareness there  because certainly that's not commonplace in all industries. I think certainly people generally  have got mixed views on the world of finance, myself having come from that background as well,  I certainly know the innovative mindsets and also just how much people do want to innovate be it,  financial products or find new efficiencies and so on in what is a complex space. It's always  something that's been very stimulating about that world so, it's amazing to hear that even  back then, you had all these people saying 'yeah, there's got to be things we can jump on here'.  Yeah, I mean it would change, would vary let's say between institution to institution, but largely  that was the case. In terms of exploring conceptually and all these things,  that was easy. In order to actually do things and produce things that would then need to be shared  as in IP sharing or stakes and having stakes in JVs or things like that, things get obviously  progressively more complicated but the spirit is still there. I mean it's always difficult to pull  JV but I think the level of collaboration and the level of progress that we saw in, for example,  when we launched the Enterprise Ethereum Alliance in the beginning is amazing. We would get so  much done in so little time, right? A lot of it was as well how ConsenSys were instigating the  whole thing. So Joe and Jeremy, particularly Jeremy, they were very, very good and very,  very adamant in a very, very good way and it had the right level of transgression, let's say. We're  there, we were fighting, let's say, for the common good and making it happen within our corporate  centers and it was possible. Of course, it is also good when you deal with other people that share  the same sensitivity to corporate issues like confidentiality, privacy, risk management,  compliance, and we need to understand this. Something I don't believe too much in is  getting or trying to drive innovation through people that are not insiders from the financial  industry. In many other sectors this is perfectly possible but within the financial industry the  sensitivity you need to have with these topics, I think, is very high. There are things you cannot  do. There are things you'll have to explain and you'll have regulators, board members,  auditors and all these people to understand. So you have to know your your boundaries. You  really need to know your limits so you're able to do things that ultimately will work. So,  I think we did a good job in understanding each other and making it happen and everybody was so  excited and so generous and so uncollaborative at that time, I think it was really good. Yeah,  I remember when I saw the announcements, I was in Sydney, living in Sydney at the  time. I was so excited for it because when the Quorum announcement happened in November  2016, I was like 'oh this is really cool, JP Morgan's getting behind Quorum' and then  next there's this thing, the Enterprise Ethereum Alliance and 'how can I get involved?' It was  really good. It was one of those pivotal moments for me in terms of seeing all these big names  really getting behind Ethereum and saying 'we think this technology is very legitimate, it's got  a lot of applicability across our places'. You've got all these heavy hitters coming together and I  think it's an amazing thing. That's true, yeah, yeah, absolutely. I remember when Quorum was  announced. It was a blessing. I mean, my life until then was using the public Ethereum client  and mining with synthetic ether that nobody really needed, right? Everything was low and  it was impossible to permission, to make up a permission network and it was a few transactions  per second and of course, there were all kinds of memory leaks and it would fall down like every  six hours to go back again. It was quite difficult to use and still we were experimenting with that  based on the transformational power that we sensed it would have. So when JP Morgan released that,  it was really great and then you would call them, you would ask them for support, for help,  for clarifications, and it would be so open and so generous and so responsive. At the time, it was a  really big thing. It was really, really amazing, so much fun at the time. It was wonderful. So then things carried on moving forward. With Santander, no doubt,  having seen everything that's been going on, we've spoken to John Whelan previously on this podcast  and he brought us up to speed with how it's continuing to drive forward  a lot of their digital asset strategy and blockchain related initiatives,  there must have been something pretty compelling that made you decide 'okay, I want to move away  from Santander doing all this great R+D and leading a lot of blockchain stuff into actually  getting something off the ground', which was with Adhara. When was it that you said 'yeah this is  the right opportunity, I'm going to make that jump now'? Obviously, you haven't looked back since.  Yeah, so I was really happy at Santander, I only have good words for  Santander and we'll always have good words for Santander. I was not frustrated  or anything. I know people, not particularly at Santander, with other large organizations  it can be a quite stifling, a different type of environment. In my case, that was not the case.  I could do whatever I wanted, whatever I really believed in I would have the possibility to do it,  would have the channels to top management, all the way to the top,  and whenever I wanted to do - if it made sense obviously - then I would  do it. I would contribute, like publicly speaking on behalf of Santander, work  groups of the European Commission or the BIS, the CPMI, the Financial Stability Board,  so you know, I was quite happy. But, this thing about entrepreneurship - at some point you have  to respond to it! You see, I always wanted to go back to just a small company and build my company  and pursue my dream. I tried to do it actually, I did try to do it in a collaborative fashion with  Santander but you know, this process is for spinning off ideas and all that,  it was not - at least at that time - it was not well worked out, so it was it was difficult to  make it. But, I would have done it if that were a possibility. So anyway, it was just that it was my  desire to go and build and pursue my dream. Then I found a couple of very good friends that  are the best companions that I could have, like Edward and Pete is my co-founder. Also ConsenSys  was very helpful because they provide the seed funding that we needed to get started so that avoided the need to go into months of pitching. As one venture capital told me once, 'having to  kiss a lot of rocks', we didn't have to do that! And also the opportunity, you know blockchain  is a distributed technology and it's good for a combination of institutions to do things together  so we should not belong in one institution. It should be more syndicated and distributed.  So I thought it was a better home to do the type of things we're doing now in building essentially,  technology for banks. So it's not the best way to do it from within a bank so, I sensed that was  an opportunity. It was definitely my desire from the very beginning to do it, it's been there for  years. I've found or I've tried to find ways to do that in different moments within Santander but  in the end you have to respond to the call I suppose. Yeah, yeah. That's what I  did, I don't regret it obviously but yes, I do miss some of my friends there.  John, John is absolutely great. Actually, John is one of the persons that responded  to that little study about bitcoin, well the blockchain, that I commissioned into  2014. I knew him, he was one of the experts that responded to that. Years later, we kept the  relation there and then brought him into Santander and then he became Head of Digital Assets and  Crypto Investment Banking. So it's absolutely great, we had a lot of fun at Santander.  Absolutely. So moving on to Adhara, as you say, you build these solutions looking at the banking  sector but you've got a number of different products spanning like treasury functions,  interbank payments, CBDC's, payment liquidity tracking, is there a common theme or problem  that these solutions collectively address? Because, of course, there's got to be a fair bit  of commonality between parts of the technology or parts of the solution there rather than building  up lots of different silos of products, right? So I'd be interested to hear more about what  it is that ties these things together. It makes sense to have these different product offers.  Yeah, well first of all it's important to recognize that these things that we are doing are  fairly specific and they're fairly focused or specialized in wholesale banking topics.  And often we get quotes and requests and things like that from people trying to do retail CBDCs or  crypto wars or things like that, and I say 'look we're very specialized'. Specialized  in a very boring thing which is also banking, the bowels of the large bank treasuries and  financial markets and cross currency payments. So, there's people for everything as we say in  Spanish! So it's quite about that. The common theme, as you said, is the use of digital assets,  particularly tokenized cache as a key enabling factor for a new operating model at treasuries.  That's really the thing. You see when you get into a bank, even commercial banks, all banks need to  manage their treasuries for example, when they do payments on behalf of people like clients. They  have to have some accounts in some special systems like in correspondent banks or in RTTS systems  in order to be able to process payments and the same when they have to process  and they have to settle transactions in the capital markets on behalf of clients.  For example, if I have a bank, you have a bank and I have a client and you need to do a payment  from my client to your client. Essentially I will take the money from him and I need to pay you as  a bank. So you need to have money in one account, either in your bank or in an RTGS system or in a  corresponding bank where we both have a an account somewhere. I need to settle with you to give you  money so that means that I have to have some pot of money, some some liquidity in order to be able  to do that. Now today, the problem is that that pot of money, the trading instruction,  the payment instruction, all these things are completely separated and they don't really  work in real time. So I send you a message, you queue that message then you have to reconcile.  Then later on you'll find out how much money I owe you or you owe me. You see, all these processes  are not well weaved together. They're all separated, they work for messages and that leads  to inefficiencies. First of all, I end up having a lot of those accounts where I have  to put a lot of money. So I need a lot of liquidity to make my bank work and that's  very costly because the opportunity cost of money is high. Second, that money doesn't move quickly  because I never know how much money I need to sell until one day or two days later, after I  do all these reconciliations and all that. Because of the lack of ability to actually move that money  quickly and also know in real time what's going on, again I need higher levels of  liquidity profoundly in those accounts to make the whole thing work. So it's quite inefficient. Instead of that, if I could have those accounts just built with tokenized money, which is a  digital asset, something that inherently works in real time. Now we can put together payments  processes, we can do trading processes and we can build them as well on top of blockchain.  That means that the process themselves are coupled with the tokenized assets so then everything  suddenly works in real time so I don't need to pre-fund all this money. I can just fund whatever  I need, when I need it and therefore I can reduce a lot of the levels of liquidity that I need  in order to run my bank. That can make me save hundreds of millions every year in internal costs.  So in Adhara, what we do is really the solution that banks would need in order to  make the best use of digital assets and really transition into a real-time operating model  that is not based on messages. It's not based on a forecasting cycle in the morning then I don't  know anything until the end of the day when I have to settle whatever I have to settle because if I  do it in real time I'm able to really optimize a lot more than all these liquidity levels and  all that. So, yes, we have solutions to build a digital asset for example, that's what we  do. You can do that for central banks and all that, but the real business is the pieces that  the banks need in order to connect to these things and to make use of these things and  put together a new target operating model that works in real time and is a lot more  efficient. I mean, for large banks they already have quite substantial operations in treasury  weaved with all kinds of messaging layers and it's a big, big mess so this can be a very  interesting transformation opportunity and would be a really huge project that could make them save  a lot of money. For tier two banks, so banks that have some regional complexity and some  operations in different currencies, in different countries and so on, this is actually a very good  opportunity for them to go into an operating model that is the good one just from the  beginning because they don't have all this mess and make them really save a lot of money. Also  it enables them to put together new payments processes that are much, much better. They're  even similar to really big banks. Many of the tier two banks will not have good corporate payments  capabilities or cash pooling or things like that so it's a great opportunity to catch up and  be able to reap very, very interesting benefits. So that's mostly what we do. I think the main  motive for the whole thing is the use of these license and particularly tokenized money. Yes, we  build these facilities but the really interesting part is the tools that are used by the banks to  better manage all this liquidity, to fund this liquidity, to make use of that and also use it in  cross currency and international payments which is a big, big pain point today in the industry.  And given the complexity of these banking systems and the fact it's a new technological paradigm  that they need to move towards, you must be looking at fairly significant time horizons  in terms of you're going to be working with people for a long time initially just to prove the stuff  out. But then where it's actually going to become a core piece of the infrastructure,  do you have ideas in your heads in terms of you think there'll be good progress - in  the next five years or maybe it's more like 10 years - because it's very complex infrastructure  as you were saying earlier. These are systems almost built in safes within  these banks so it's like you've got to dig the safes up, you've got to open them up and then  convince everyone that we know it's secure but they need to be convinced it is as well. Yeah,  I guess the answer depends on the exact institutions or the type of institutions  we're talking about. Really large banks, yes, this will take time because of they've invested  a lot of money into trying to cope with all that complexity. Smaller banks that don't have  that mess, I don't see a reason for waiting like five years or ten years to actually adopting that  new way of doing things like that new operating model. In terms of readiness of the technology,  well this is getting better and better every month for every quarter, right? The evolution  that we've seen in enterprise grade blockchain technology, I think it's been phenomenal so  this actually is never really a consideration in all the conversations we're having.  So I think this is already beyond any reasonable doubt. So people are not,  three years ago yes, they would say 'but this isn't matured, it's not scalable,  you cannot support privacy, it's very difficult to do permissioned networks with the adequate  level of security', but now I think many of these topics have been addressed. I know we  have mechanisms for all of these. Definitely permissioning is very simple to do these days. Now we have interoperability mechanisms as well, maybe not the final ones but  at least we have good enough ones to be able to do atomic swaps between different chains,  even different chains of different flavours or different technologies. So  I don't think that's going to be the major battle at least for the use cases that we are  focused on which are linked again to wholesale banking. We're not talking about doing merchant  payments or card payments or something like that on blockchain, not yet, but also markets,  definitely everything related to CBDC's things like that. To my knowledge it's  more than ready or more than capable, let's say, to cope with that sort of complexity.  Most of the, let's say, potential objections or things that need to get addressed  are more about on the accounting side for example, so making sure that's tokenized money.  It can be treated really as yet another regulated liability like a bank account or  something like that. There's a quite interesting short paper written by Tony Mclaughlin, from Citi,  that talks about the regulated liabilities and he's displaying that there are only four types  of money in the world, either cash, central bank reserves, bank money or electronic money. The last  three of those are regulated liabilities, it's just money that the banks create  on their balance sheets. If they do it against credit, that's bad money. If they do it by the  central bank discounting assets or whatever that is RTGS money. If they use an omnibus account and  crypto card or whatever it is, then that is electronic money. But actually using  a smart contract to record those regulated liabilities, it's just a technology choice.  We're not doing anything new, it's not a new asset, it's just another database instead of using  the core banking system database which is using a smart contract. So if that is true then the  accounting treatment of that should be that of a normal regulated liability like any other current  account. Well, that's something that people will need to understand and accept and that's,  for example, one of the topics that I think will need acceptance in order for this to go forward.  So, I don't know, based on the conversations we're having, I don't think it's a matter of five years.  I think it's much less than that. At least for the initial use cases, particularly the ones in the  wholesale markets. I think those are a lot easier because they have a lot less complexity in terms  of the last mile with the user and the security and the usability and what we do with the keys and  that sort of complexity which is always a lot of fun. But at the institutional level, I think we're  going to see a huge progress in the following months. And, no doubt  from a cost-saving perspective as well, there's some very big numbers that could be demonstrated  to these organizations when they cut out these reconciliations and all this data that they've  got to exchange right now with independent other participants they're dealing with  yeah? Yeah, I agree. Again, you can see that all throughout the industry,  it's not like the industry is broken or is not working, it's just that all these systems were  built with another purpose in mind and also they were built where we would not have all the  widespread connectivity we have today. At the time, when I started building all the systems,  everything was about point-to-point connections. It was about messages, it was about some  instructions peer-to-peer but they didn't have the internet. They didn't have a big decentralized  communications capabilities. So it only took 20 years to develop the distributed way of  restoring value, intersecting with values. We're just digesting and trying to find the  first ways for that, the first uses for that. But, it's a new tool and this could be a good  cornerstone to actually tackle the transformation of the industry. That's what we always thought.  Yeah and then certainly with all of the interest there is right now with different  monetary authorities with central banks with respect to central bank digital currencies,  it certainly seems like there's a very positive response from governments and so on about the  transformative potential of this. It seems that there aren't really any know major central banks  not interested in the technology so to speak and you have those who have really kind of been  jumped ahead like the Bahamas with their Sand Coin which they've actually put out there. China was  actually trialing some within Beijing and the Bank of England as well, they've kind of got their participants who are advising them. So that's an area of course, that Adhara and you  have got a lot of interest in from the wholesale perspective as you say. But I'm interested as well  to think about where we're going to in terms of the future. I guess it's a given that blockchain  and decentralized ledger technology will simplify the landscape for these organizations,  and so there's those tangible benefits that I think are pretty clear. But then there's  this other stuff that's happening in the the public domain where you've got what started off  with ICOs and all the tokens and utility tokens and so on and then sort of evolved, and you've  got everything that's happening here with NFTs and DeFi. I think where it becomes quite fascinating  is that once you could argue that when you've got a jurisdiction say offering a retail CBDC then  people could potentially treat that retail CBDC kind of like they treat a  utility token right now or a crypto asset by bitcoin or Ethereum or whatever else.  I often wonder is there going to be a bit of a divergence down the line where  the retail CBDC's, people start to look at them almost fungibly with crypto assets in that they'll  have some money tied in with these retail CBDC's because they want to get all of the benefits that  come with being invested in that currency being domiciled in that country, getting public services  because they're paying tax. And then you'd still have these other utility pieces where  it's much more about the cryptocurrencies. I'm curious if you see this world spinning up where  you've almost got these retail CBDC's almost start becoming a bit like cryptocurrencies  are now because they're underpinning them is the same technology but instead of it being  like a project team that's created, it's a governmental central bank controlling them. Well, so first of all, I'm a really bad futurist so you should not trust me!  I'm keen to hear though, I think you're closer to the ground than most people on the wholesale part.  Yeah, i'm very bad! One thing I would say is that the wholesale world is very different.  So something I don't believe in is that repurposing retail CBDC or even crypto  assets for the use in a wholesale context. No. The same way retail people cannot have  deposits at the central banks and they cannot trade directly with that large institution.  Sorry, this is separate worlds and that's why we have a fraction system and with new roles for  banks and central banks and people. I think it's quite frankly quite separate and quite different.  I think in terms of wholesale CBDCs, the driver is that. It's getting efficiency in the use of  equality and being able to settle transactions, move collateral fund accounts,  manage bank assets, what you do - activity on behalf of clients, and be able to do that more  efficiently. So that's a whole thing and also you can use that to put together new  products and services. Meaning better prices, faster payments,  more information, real-time processes, real-time knowledge of what's going on, which is mostly  what corporate treasurers want. They just want to know rather than really move money in a matter of  seconds like in the movies. I think it's a much more boring topic than the other one!  In terms of retail CBDC's and the convergence or divergence from crypto,  I think the debate is a little bit too noisy at the moment. On one hand, I can't see...so  you know what is the point, right? The point is providing better usability and programmability  to money so people can access the money and can plug applications and we can innovate  and do things. 95% of the money in the world is bank money and that is already digital.  That already exists in a detailed system, it's a number in a database in a banking system somewhere  in a data center. That's 95% of the money. The thing is that that piece of data in that database,  it's not accessible to you. Not to you, not to anyone, not to cyber criminals,  obviously. So you have to go through bank APIs and banks who are not going to open the API.  So you have to go through the banking applications or the portals for the  mobile banking application, whatever it is. So you cannot really make use of the deeds or money  even though it's digital because they cannot open the interface to you, you're not free to use it.  But if we create bank money using token contracts, just using the blockchain as if it were a database, just a smart contract instead of a conventional database then suddenly  you could open it for use by the people. Imagine, it's a completely hypothetical and critical case,  but imagine that my bank account in my bank is going to be implemented on a  smart contract on top of the public Ethereum ledger. It's still controlled by the bank,  so you can still do KYC and everything to qualify people but suddenly I can just join the network.  I can start to transact with my money and pay and or pledge or whatever I want to do. So that's a very interesting thing, but the purpose is giving people access to the  money without having to go through the banks. That doesn't change anything, it only fosters  innovation and the possibilities to the couple, the bank systems or the bank channels from the  money itself. You could start using, I don't know, MetaMask to operate your bank account for example.  But that sort of thing, you could be doing. So that's one purpose. I find it absolutely  fascinating and it has a lot of possibilities but that is different from starting to create  money by the central banks for the people because that's not the way money is created today.  Money today is created against credit. You go ask for a mortgage, the bank will  annotate your mortgage and will create the money for you in your account and you will pay the money  someone else and that's how money is is created. So if instead of doing that you are going to be  doing it from the central bank then the question is who gives the credit right? Is it the central  bank? Are we going to create a big central bank that's going to manage the whole economy?  That's changing absolutely everything, including removing the role for banks.  The point is marginalizing the use of physical cash and attributing identity to that. So putting  in more controls from that because cash is a problem. It's inefficient, it's expensive and most  importantly it's very bad, it's very problematic for counter terrorism financing measures. So if the point is marginalizing cash, that is fine, but then (and yes you  can do it through a retail CBDC) you have to decide what level of control you want to do,  in the case of China for example, the control is huge. In the case of others,  maybe less. Even with thresholds for example, you would have some thresholds for anonymous cash  versus others that need to go through okay with the processes and that sort of thing.  But if that is going to lead into a situation where the two or three percent that physical cash  represents today grows into 30% or 40% or 50% then you're changing the whole system again you see.  Banks are not going to be happy and central banks are not going to be happy as well because  they will have to do KYC, they will have to create credits. The whole economy is going to change. So,  I don't know if there are ways to do this in a sensible manner. I think that's what many of the  central banks are exploring right now. It's not really a technology,  it's more about the monetary implications and the broader implications for the economny in the end. The answer is 'I don't know, I frankly don't know'. I don't think we have still  enough information. I don't think people have devised yet a system by which that can be done.  So I don't know. At least in the wholesale world it's very simple and it's very clear, it's very  ring fenced and that's it. Retail CBDCs, we'll see and all that again I think is separate from  crypto. Crypto is... bitcoin is great as a digital goal, it's another asset, right? It's a new asset  that is like gold, something that is scarce, it's anonymous, it's not controlled by anyone,  fine it can be used as that. Frankly, I personally don't find many reasons  to use something like bitcoin as the new money to change the financial system. Why?  What is the problem with today's money? The problem is the accessibility because of all  these bank APIs and all this disconnection and fragmentation of ledgers and all that.  We can solve that with regulated liabilities on a tokenized basis using smart contracts on blockchain. So if that is the point let's use the technology and that's  it. We don't need to change the nature of the asset because that's not the problem. If that  is the problem, then the conversation is different because if the point is making  a financial system that is not controllable by central banks or multilateral organizations then the implications are just staggering. So anyway, I don't think I have the answer but that's what I'm  observing in the industry and I'm very keen to see how it plays out. In general Adhara are not  too much focused or concerned with retail CBDCs. If they become somehow a reality then yes, banks  will have to work with them and we will be there obviously to provide them with all the technology  that they need in order to use it. That's another digital asset, like financial assets,  like positive CBDC's, like bank coins, which is what we really do for a living. But we're not  really pushing that agenda proactively. Well, while you claim not to be a futurist as such,  at the same time I think your understanding though of the realities of how the wholesale markets work  and how they fit into the retail markets is quite key for being able to see how this can progress,  given there's good reasons why it is the way it is, so to speak, and it's taken  hundreds of years to get to this point. Yeah, particularly around anti-money laundering and  terrorism financing. We collectively as an industry, we haven't spent a lot of  money in making it very hard for criminals to do all that so it's something that cannot just go away. We're going to innovate in order to reduce our ability  to stop those things. Frankly, this is not gonna go far and if the point is avoiding taxes then  it's not going to be sustainable. I don't know, maybe I'm too conservative or too old now, but... Absolutely, with the the regulation, as you say, this is such a crucial point and  like with the default industry right now and crypto more broadly, there's still  a lot that needs to come into place. We're still in the early days there and  when that is in place, the landscape could change significantly off the back of it as well.  Yeah, yeah, definitely it could. Well all I wish is that when it comes to regulation, we  really distinguish between what is the use of a new technology to support an existing asset and  existing regulatory constraints versus regulating the use, the possession and the storage  of new assets that do not come from that world and therefore they're not subject to  the same relatives really, like cryptocurrencies or like utility tokens or whatever the next thing  they come up with are! Because it's different. I mean, the first thing is just a matter of  when we use this technology or not whether we're happy enough or not with the security model  based on public key cryptography, like in smart contracts or even cryptocurrency trading  and whether we are happy with the resiliency and  general technical features and cyber security constraints of blockchain related technology as an  alternative against the conventional technology. I understand it can be difficult to believe that a  blockchain enabled ledger made completely transparent to clients so you have your own  mobile banking application, your web application, whatever it is,  just connect it to a blockchain ledger, that that thing can be as secure as reliant or even more  than a conventional banking system but it costs like a hundredth of that, right?  There should be no problem using this and achieving the benefits. That's really what we are  testing and proposing and building around. So I just just hope that when we go into  more concrete regulatory actions and all that, we distinguish well between those things. First, it's  really about the technology adoption and about the possibility and also the effect that it will have  on the underlying business processes like, for example, being able to move money in seconds  without doing reconciliations or batches. That has some policy implications like, for example,  you cannot revert to transaction, you just settle. If you want to undo it you have to  do another transaction to revert the effect of the transaction but you cannot erase it. So it would  be really surprising that regulation forces you to be able to erase the transaction if you make  a mistake or to stop a transaction from happening just in case someone has a second thought  and says 'Oh no, there was a fat finger!' I mean there may be some legitimate constraints about  not the use of the technology, but the change or the speeding up of some of these business  processes. But in any case, all these things are completely different versus regulating the use and  the possession of completely different new assets like crypto, ICOs, NFTs, who knows what... Yeah,  fingers crossed that the regulation as you say, will be kind of appropriate for the technology  in that regard in terms of treating things like commutability as first-class citizens.  Yeah, I think they're doing a great job, it's not for me to judge them obviously, but  I've been involved with education dissemination efforts and education efforts for the likes of  some of those central banks and regulatory bodies and I think they've come a very, very long way.  The quality of the discussion right now is a lot better. In the beginning it was like completely  far away topics for them and it was very difficult to weed out the different subjects that we were  treating - are we talking about the asset? Are we're talking about the security model? Are we  talking about resiliency? Are we talking about the mobility aspects with the access?  Everything was changed, you would talk about programmability and they would tell you about  energy consumption because of mining - No! It has nothing to do with it, a permission network is  not energy inefficient it's not a problem, this is ConsenSys, why are we even talking about this? So  I think they've come a very long way and they're much better informed in  these times. I think they're doing a fairly good job, I would say, it's very arrogant for me to  say that, but at least that's what I'm seeing. I'm seeing a very high quality in the dialogue. Take  a look at the Bank of England for example, the announcement of the policy for omnibus accounts  that is going to enable things like finality, so well written, right? So advanced in thinking so  people really understand. They understand, they're really looking for all the implications and  thinking very hard on that so it's not high level chatter it's actually very specific about it. As you say,  with the people who are defining these and help them there and it means that you get the  right sort of rules and perspectives in place and certainly comforting as well to know that you have  Adhara yourself and the rest of the team there as well helping really drive this industry forward.  It's what you want to hear of the people building these new platforms and so on because  it's bringing the right expertise to the table. Well, it's a grain of sand, right? Yeah, we love  to contribute but yes, it's quite exciting to see the industry collectively working towards this. So  Julio, just before we finish up here, if people want to  follow what's happening with Adhara or reach out to yourself, are there specific places  where you're active like LinkedIn or Twitter or if there's much content going out with Adhara?  Yeah, happy to, you can reach me very easily is julio@adhara.io so quite quite simple  and yes we'll be doing more communication dissemination efforts over the course of  the next months. We've not been particularly active. We were very busy building things.  I used to do a lot of that as you know Conor, when you live in a startup you need to sell to get this going! So yeah, there is a website and it will have more and more information over  the course of the next months but anyway very happy to be reached through email or LinkedIn. Wonderful! Well, Julio, it's been an absolute pleasure to host you today and I look forward to  seeing Adhara going from strength to strength and creating that new fabric of the wholesale market  on DLT. Yeah, it's very, very exciting. Thanks a lot, it's been a pleasure to be with you Conor.