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Cryptocurrencies are not widely used for payments due to their high volatility. However, this is expected to change as the logic of economics suggests that volatility will decrease. Giants like Bank of America and JPMorgan are starting to recognize the potential of these technologies and the need to adopt them to remain relevant. Established companies do not want the technology industry to dominate finance, and Ripple's XRP Ledger is positioned at the convergence of DeFi technologies and institutional adoption. Ripple focuses on solving specific problems like sanction screening that institutions will need to be part of this ecosystem.

Our financial systems are antiquated. We're unable to track trillions of dollars in transactions. Information sharing is severely limited by outdated and incompatible technological systems.

Technology is important, so let's discuss hash functions and asymmetric cryptography from a business perspective. Digital currency has been around for a while, starting with the telegraph in the 19th century.

We're excited about the math-based currency movement, which we believe could be a huge game changer in finance. Our currency supports a global payment system open to everyone. We focus on utility, ensuring a multicurrency payment system by solving the double spend problem with a global ledger and consensus process. This allows any currency, like bitcoin or dollars, to be used. The potential is incredible. Translation: We are enthusiastic about the math-based currency movement, seeing it as a significant innovation in finance. Our currency enables a global payment system that is accessible to all, with a focus on utility and the ability to support multiple currencies. By addressing the double spend issue through a global ledger and consensus process, we can incorporate various currencies like bitcoin and dollars. The potential for growth is immense.

The speaker, who has 20 years of experience with SWIFT, explains that SWIFT is the dominant messaging system in the financial industry. They mention that SWIFT is upgrading its network to enable real-time transactions. Additionally, they suggest that Ripple's SRP could potentially be used as a currency on the SWIFT network, particularly for foreign exchange purposes. The focus is on complementing SWIFT rather than replacing it.

There is a significant difference between cash and Central Bank Digital Currency (CBDC). With cash, we don't know who is using specific bills, but with CBDC, the Central Bank will have complete control over the rules and regulations governing its use. They will also have the technology to enforce these rules. These differences make CBDC distinct from cash.

The discussion centers on the main payments system, referred to as PAM, described as the “payments computer” and commonly called PAM by everyone. PAM is responsible for almost $5,000,000,000,000 in payments per year, which equates to roughly a billion dollars every hour. The speakers indicate that, upon their arrival, they observed what they describe as a severe lack of payment metadata: payments could be processed with no payment categorization code and no description, effectively creating payments that were “untraceable blank checks.” The speakers contrast this situation with how such conduct would be viewed in the private sector, stating that if this were a public company, the company would be immediately delisted and the executive team would be thrown in prison. They emphasize that, in the context they are discussing, this kind of exposure is considered normal within the government. The overall point is that the payments system operates with extremely little traceability or descriptive data attached to transactions, creating a scenario they characterize as highly problematic and unacceptable in the private sector but commonplace in the government.

Blockchain is becoming a permanent fixture, expanding beyond commerce to NFTs, real estate, and financial ledgers. The financial system needs an overhaul to eliminate inefficiencies that benefit intermediaries. Technology exists for global financial institutions to settle transactions in seconds for minimal cost. Crypto aims to shift control from banks to users. Ripple's extensive partnerships aim to revolutionize remittance services globally. Ripple's goal is to revolutionize remittance services or fade away.

Speaker 0 says the biggest question for central banks is the role of tokenization and digitization, including how quickly they should digitize their own currency and what that means for the role of the dollar, bank payments, and payment companies like Mastercard and Visa. They note that while much discussion centers on AI, not enough attention is paid to how quickly every financial asset will be tokenized and the opportunity to use a digital wallet to move assets such as ETFs. They believe this will happen worldwide very rapidly and that most countries are ill prepared for it, with an underappreciation of how technology is changing this, not unlike how technology is changing AI. It will change the technology around the plumbing of finance.

We've seen revolutions in how we deliver goods, like with the shipping container, and information, like with the internet. But what will be the next big thing for money? What's the "TCP/IP" or the "shipping container" of value going to be? It's coming, and it will bring big changes, including drastically smaller payment sizes. Right now, you get paid bi-weekly and pay bills monthly because payments are expensive and slow. But if payments were cheap and simple, those frequencies could increase. Money could be streamed to you as you work, or streamed to your landlord. These ideas might sound silly, but think about email in the late '90s. Could you have predicted how it's used today? Or Netflix, when bandwidth seemed too expensive? The internet drove bandwidth costs down. If payment costs go to zero, the world will change in ways we can't fully imagine yet.

The speaker, who has experience in banking, discusses the future of cash and the shift towards digital payments. They mention that some countries are already moving away from cash, and the pandemic has accelerated this trend. The speaker believes that there will be a major global financial shift, but they cannot provide proof due to their position as an employee. They hint at the potential role of Ripple in revolutionizing global payments and addressing the communication issues between banks. The speaker expresses their belief that Ripple will be the entity to take over global payments. They emphasize the significance of this development and their desire to spread awareness about it.

Speaker 0: The United States just lost a war it didn't even know it was fighting. While Washington celebrates military victories and economic growth numbers, the real battlefield has shifted to the global payment system. This week, something unprecedented happened in the shadows of international finance. Brazil quietly activated the Brixbridge system. For the first time in eighty years, major economies completed cross-border transactions without touching a single US bank. The American media is not reporting this story, but I can tell you, as someone who spent decades inside the system, this is not just another trade deal. This is the financial equivalent of splitting the atom, and the explosion is coming. The United States has enjoyed what we call monetary imperialism for nearly a century. Every time you buy oil, coffee, or electronics anywhere in the world, those transactions flow through New York banks. Washington collects a tax on every trade, every investment, every breath of the global economy, but that monopoly just ended, and most people don't even realize it happened. My name is Paulo Nogueira Batista junior. I served as executive director at the International Monetary Fund. I sat across the table from finance ministers of collapsing nations. I know how empires fall. They don't collapse from outside invasions. They collapse when their money stops working. And the American money is about to stop working. And the explanation of what happened this week in Brazil: President Lula signed an executive order that sounds boring to most people, but this order just declared independence from The US financial system. Brazil can now trade directly with Russia, China, India, and South Africa using our own central bank digital currencies. No dollars. No swift system. No permission from Washington. Think about what our country has achieved. Every international bank transfer in the world flows through this Belgian company controlled by the US Treasury until now. Till the BRICS Bridge is not just an alternative to SWIFT. It is a declaration of war against monetary colonialism, and it's working. In November 2024, Russia and China settled $20,000,000,000 in bilateral trade using this new system. In December, India and Brazil completed energy transactions worth $15,000,000,000. By January 2025, South Africa joined the network. The numbers are still small compared to the global economy, but remember, every revolution starts with small numbers. The Internet started with a few university computers.

Our financial systems are outdated, making it difficult to track trillions of dollars in transactions. Additionally, the lack of compatibility between different technological systems prevents us from sharing information within this building.

Consensus believes that blockchain technology will play a crucial role in transforming the global payments infrastructure. They are partnering with central banks, retail banks, fintech institutions, and blockchain innovators to develop central bank digital currencies (CBDCs). CBDCs are a reimagined way for currency to operate on a fully digital infrastructure, where central banks issue money directly to individuals through e-wallets. The current financial systems are complex and inefficient, with settlement delays and increased transaction costs due to third-party involvement. CBDCs utilize smart contracts to instantly perform functions currently done by third parties, enabling central banks to drive monetary policy and offer innovative products and services. Consensus, as a leader in blockchain software, bridges the gap between the blockchain ecosystem and financial institutions, making them well-positioned to help embrace this new open financial system.

There is a significant difference between cash and central bank digital currency (CBDC). With cash, we don't know who is using specific bills, but with CBDC, the central bank has complete control over the rules and regulations governing its use. Additionally, the central bank has the technology to enforce these rules. These differences make CBDC distinct from cash.

There is a significant difference between cash and central bank digital currency (CBDC). With cash, we don't know who is using specific bills, but with CBDC, the central bank has complete control over the rules and regulations governing its use. Additionally, the central bank has the technology to enforce these rules. These differences make CBDC distinct from cash.

The speaker explains that there is a significant difference between cash and Central Bank Digital Currency (CBDC). With cash, it is unknown who is using specific bills. However, with CBDC, the Central Bank will have complete control over the rules and regulations governing its use, and the technology to enforce them. This distinction is crucial and sets CBDC apart from cash.

The speaker discusses the issue of staking centralization and suggests that the current system needs redesigning. They explain the concept of a UTXO payment system, where transactions are like virtual coins that can be broken up and combined. This system ensures that when receiving a payment, a new transaction is created and none of the existing transactions can be changed without consent. In contrast, a balance-based system allows for changes to be made to someone's balance without their consent. The speaker emphasizes the importance of consent in financial transactions.

Mario and Jeff discuss what the current geopolitical and monetary environment means for gold, the US dollar, and the broader system that underpins global finance. - Gold and asset roles - Gold is a portfolio asset that does not compete with the dollar; it competes with the stock market and tends to rise when people are concerned about risky assets. It is a “safe haven store value” rather than a monetary instrument aimed at replacing the dollar. - Historically, gold did not reliably hedge inflation in 2021–2022 when the economy seemed to be recovering; in downturns, gold becomes more attractive as a store of value. Recent moves up in gold price over the last two months are viewed as pricing in multiple factors, including potential economic downturn and questionable macro conditions. - The dollar and de-dollarization - The eurodollar system is a vast, largely ledger-based network of US-dollar balances held offshore, allowing near-instantaneous movement of funds. It is not simply “the euro,” and it predates and outlived any single country’s policy. Replacing it would be like recreating the Internet from scratch. - De-dollarization discussions are driven more by political narratives than monetary mechanics. Central banks selling dollar assets during shortages is a liquidity management response, not a repudiation of the dollar. - The dollar’s dominance remains intact because there is no ready substitute meeting all its functions. Replacing the dollar would require replacing the entire set of dollar functions across global settlement, payments, and liquidity provisioning. - Bank reserves, reserves composition, and the size of the eurodollar market - The share of US dollars in foreign reserves has declined, but this is not seen as a meaningful signal about the system’s functionality or dominance; the real issue is the level of settlement and liquidity, which remains heavily dollar-based. - The eurodollar market is enormous and largely offshore, with little public reporting. It is described as a “black hole” that drives movements in the system and is extremely hard to measure precisely. - Current dynamics: debt, safety, and liquidity - The debt ceiling and growing US debt are acknowledged as concerns, but the view presented is that debt dynamics do not destabilize the Treasury market as long as demand for safety and liquidity remains high. In a depression-like environment, US Treasuries are still viewed as the safest and most liquid form of debt, which sustains their price and keeps yields relatively contained. - Gold is safe but not highly liquid as collateral; Treasuries provide liquidity. Central banks use gold to diversify reserves and stabilize currencies (e.g., yuan), but Treasuries remain central to collateral needs in a broad financial system. - China, the US, and global growth - China’s economy faces deflationary pressures, with ten consecutive quarters of deflation in the Chinese GDP deflator, raising questions about domestic demand. Attempts to stimulate have had limited success; overproduction and rebalancing efforts aim to reduce supply to match demand, potentially increasing unemployment and lowering investment. - The US faces a weakening labor market; recent job shedding and rising delinquencies in consumer and corporate credit markets heighten uncertainty about the credit system. This underpins gold’s appeal as a store of value. - China remains heavily dependent on the US consumer; despite decoupling rhetoric, demand for Chinese goods and the global supply chain ties keep the US-China relationship central to global dynamics. The prospect of a Chinese-led fourth industrial revolution (AI, quantum computing) is viewed skeptically as unlikely to overcome structural inefficiencies of a centralized planning model. - Gold, Bitcoin, and alternative systems - Bitcoin is described as a Nasdaq-stock-like store of value tied to tech equities; it is not seen as a robust currency or a wide-scale payment system based on liquidity. It could, in theory, be a superior version of gold someday, but today it behaves like other speculative assets. - The conversation weighs the potential for a shift away from the eurodollar toward private digital currencies or a mix of public-private digital currencies. The idea that a completely decentralized system could replace the eurodollar is acknowledged as a long-term possibility, but currently, stablecoins are evolving toward stand-alone viability rather than a wholesale replacement. - The broader arc and forecast - The trade war is seen as a redistribution of productive capacity rather than a definitive win for either side; macroeconomic outcomes in the 2020s are shaped by monetary conditions and the eurodollar system’s functioning more than by policy interventions alone. - The speakers foresee a future with multipolarity and a gradually evolving monetary regime, possibly moving from the eurodollar toward a suite of digital currencies—some private, some public—while gold remains a key store of value in times of systemic risk. - Argentina, Russia, and Europe - Argentina’s crisis is framed as an outcome of eurodollar malfunctioning; IMF interventions offer only temporary stabilization in the face of ongoing liquidity and deflationary pressures. - Russia remains integrated with global finance through channels like the eurodollar system, even after sanctions; the resilience of energy sectors and external support from partners like China helps it endure. - Europe is acknowledged as facing a difficult, depressing outlook, reinforcing the broader narrative of a challenging global macro environment. Overall, gold is framed as a prudent hedge within a complex, interconnected, and evolving eurodollar system, with no imminent replacement of the dollar in sight, while the path toward a multi-currency or digital-currency future remains uncertain and gradual.

Our financial systems are outdated, hindering our progress. It is estimated that we are unable to trace $2.3 trillion in transactions. Additionally, the lack of compatibility between various technological systems prevents us from sharing information within this building.

"We move into this digital currency era where the banks are issuing these stable coins, these deposit tokens that are programmable money." "They're going to be sharing this data in the same database that the CIA and any other intelligence agency can access whenever they want without a warrant." "No more secret FISA courts or you don't need any of that infrastructure anymore. It is the new system." "Retail CBDC is not nearly as common today as wholesale CBDC." "Wholesale CBDC works as this two tier system." "the CBDC really only serves as a means of interbank settlement and isn't public facing at all." "FedNow, for example, of the Federal Reserve, that was launched solely as a means of interbank settlement, really." "When you have people like Trump and Ron DeSantis say no CBDC, they mean no public facing CBDC. They don't mean no wholesale CBDC."

In the future, everything of value in the world will be represented by tokens on a blockchain, not physical items. This shift will eliminate the need for paper transactions and traditional financial institutions like DTCC. All transactions will occur in digital assets, leading to significant wealth creation opportunities.