Does safe DeFi require CBDCs?

Conference hosted by the BIS Innovation Hub and the Swiss National Bank, 4 April, 2022, Zurich, Switzerland. 

This conference aims to establish a common understanding on how DeFi-based markets might evolve from their current state, what role central banks might have, and the potential interaction with Central Bank Digital Currencies. 

Introduction: views on money and finance

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Opening speech by BIS General Manager Agustín Carstens

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Remarks by Thomas Jordan, Chairman of the Governing Board, Swiss National Bank

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Fabian Schär is a Professor of Blockchain and Fintech, Faculty of Business and Economics, University of Basel.

Session 1: DeFi – present and future

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While many call DeFi a black box or parallel system, the ecosystem has been growing strongly. What are the key drivers for innovation on the supply side? How has demand for DeFi products shaped the ecosystem?

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DeFi is sometimes said to be the next big thing in finance. Yet beyond stablecoins using official units of account, links with real-world assets are limited. What is the prospect of DeFi becoming useful for real world assets? How could scalability of underlying blockchains be overcome? How could the legal limits be overcome? Could DeFi become systemically important to financial markets?

Session 2: DeFi – from stablecoins to CBDCs?

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Stablecoins, typically denominated in US dollars, are the dominant settlement asset in the DeFi ecosystem. How did they affect this ecosystem's development? What are the opportunities and risks of stablecoins? If central banks were to allow CBDCs to be used in DeFi, what would be the potential challenges of a hybrid stablecoin/CBDC model?

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DeFi and CBDCs seem worlds apart. But with the DeFi ecosystem maturing, the space of common interest could increase. What would the DeFi environment look like if it were to adopt CBDCs as a main settlement instrument? What are the considerations for central banks in allowing or not CBDCs to be used in this way? What other challenges would this ecosystem pose for central banks?

Closing remarks

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A conference wrap-up by Andréa M Maechler, Member of the Governing Board, Swiss National Bank

(all times are in CEST)

09:00 – 09:30 Registration and coffee

Introduction: views on money and finance

09:30 – 09:40

Welcome address
Agustín Carstens, General Manager, Bank for International Settlements

09:40 – 09:50

Introductory remarks
Thomas Jordan, Chairman of the Governing Board, Swiss National Bank

09:50 – 10:15

Presentation: What is DeFi?
Fabian Schär, Professor of Blockchain and Fintech, Faculty of Business and Economics, University of Basel


Session 1: DeFi – present and future

10:15 – 11:30

Latest developments in DeFi

While many call DeFi a black box or parallel system, the ecosystem has been growing strongly. What are the key drivers for innovation on the supply side? How has demand for DeFi products shaped the ecosystem?

Moderation: Camila Russo, The Defiant

Panel: 
-        Robert Lauko, Liquity
-        Wenqian Huang, Bank for International Settlements
-        Michael Egorov, Curve Finance
-        Roger Wattenhofer, ETH Zürich

11:30 – 11:45

Break

11:45 – 13:00

The role of DeFi in future financial markets

DeFi is sometimes said to be the next big thing in finance. Yet beyond stablecoins using official units of account, links with real-world assets are limited. What is the prospect of DeFi becoming useful for real world assets? How could scalability of underlying blockchains be overcome? How could the legal limits be overcome? Could DeFi become systemically important to financial markets?

Moderation: Hyun Song Shin, Bank for International Settlements

Panel:
-        Thomas Eichenberger, Sygnum
-        Iota Nassr, Organisation for Economic Co-operation and Development
-        Jan Brzezek, Crypto Finance
-        Evan Van Ness, Starbloom Ventures


13:00 – 14:15 Lunch

Session 2: DeFi – from stablecoins to CBDCs?

14:15 – 15:30

DeFi and stablecoins

Stablecoins, typically denominated in US dollars, are the dominant settlement asset in the DeFi ecosystem. How did they affect this ecosystem's development? What are the opportunities and risks of stablecoins? If central banks were to allow CBDCs to be used in DeFi, what would be the potential challenges of a hybrid stablecoin/CBDC model?

Moderation: Robert Sams, Clearmatics

Panel: 
-        Aleksander Berentsen, University of Basel
-        David Puth, Centre
-        Ekaterina Anthony, Crypto Valley Association
-        David Newns, SDX

15:30 – 15:45

Break

15:45 – 17:00

The road ahead: challenges and opportunities for DeFi and CBDCs

DeFi and CBDCs seem worlds apart. But with the DeFi ecosystem maturing, the space of common interest could increase. What would the DeFi environment look like if it were to adopt CBDCs as a main settlement instrument? What are the considerations for central banks in allowing or not CBDCs to be used in this way? What other challenges would this ecosystem pose for central banks?

Moderation: Thomas Moser, Swiss National Bank

Panel:
-        Amit Chaudhary, Polygon
-        Andreas Glarner, MME
-        Morten Bech, Bank for International Settlements
-        Lex Sokolin, Consensys


Closing remarks

17:00 – 17:15

Andréa Maechler, Member of the Governing Board, Swiss National Bank