Highlights from Point Zero Forum
Last week we met some of you at Point Zero Forum in Zurich, Switzerland, for an engaging event packed with thought-provoking discussions and insightful networking.
While many of the large-scale events on the cross-border payments calendar are targeted around the commercial aspects of the industry, Point Zero is far more focused on regulation and policy, having been organised by Elevandi in partnership with the BIS Innovation Hub, the Monetary Authority of Singapore and the Swiss National Bank. The result was a much longer-term focus than is generally the case at industry events, concerning how cross-border payments will develop over the next decade and beyond.
With no stands and multiple streams of roundtables, talks and workshops, this was a space designed to foster in-depth discussion across industry leaders, central banks, academics and innovators. There were a wide range of focuses as part of the event, but here are some of the key takeaways:
- Project Nexus, the BIS’s instant cross-border payments project, launched its next phase at the start of the event and was a key focus of discussion across Point Zero. We heard from experts at the BIS, as well as central bank stakeholders and industry commentators, on the potential of the initiative, and there is clear enthusiasm for its prospective significant impact for the industry. Much more to come on this from both the industry and ourselves.
- Cost, transparency and speed were the watchwords of the cross-border payments discussion across a host of different panels and conversations. But with so many different thoughts on how to solve these, it’s clear that the industry is only going to become more complex as sophistication builds.
- Blockchain and stablecoins are very firmly part of the conversation, driven both by interest from policymakers and regulators, but perhaps more crucially from industry representatives. Key players in this space, in particular Circle and to a lesser extent Paxos, were highly present at the conference as they continue to work to build connections with the central banks. For many, the focus is on finding a mix between fiat and crypto solutions where appropriate, rather than exclusively pushing one over the other.
- CBDCs continued to be a strong focus for central banks, but were discussed alongside public-private partnerships and entirely commercial solutions.
- AI was a key focus of conversation, but the energy around this topic is quite different than at the commercial-led conferences. While at other events there has been a strong sense of urgency around artificial intelligence, a clear sense of the technology’s potential was here combined with a stronger focus on the need for regulatory scrutiny and guardrails.
- Other longer-term topics were also frequent on the agenda, most notably quantum computing, which poses significant potential challenges for encryption and security. While this is unlikely to be a notable concern in the near or even medium-term for the cross-border payments space, its presence speaks volumes about the mindset of the conference.
Highlights from ‘Evolution of cross-border payments: Next-gen solutions’
As part of the conference, I had the pleasure of joining the panel ‘Evolution of cross-border payments: Next-gen solutions’ to discuss the development of the industry within the context of a potential partial shift from Web 2.0 to Web 3.0. Led by an introductory talk from our Head of Content & Editor-in-Chief Lucy Ingham, and moderated by Arjun Vir Singh, Partner & Global Co-Head of Fintech at Arthur D. Little, this saw me joined onstage by Livia Benisty, Chief External Affairs Officer at Banking Circle, alongside Milind Sanghavi, Co-Founder & CEO at XWeave.io, and Varun Paul, Business Lead for CBDC, FMI & Blockchains at Fireblocks.
The lively conversation covered a wide range of areas against the backdrop of a rapidly changing market in which the focus continues to be speed, cost and transparency, but where there are myriad ways to address each issue. Key points covered include:
- Adoption is critical to any solution, which means meeting users where they are, rather than expecting them to change habits in response to new technology. There also needs to be coordination both on a global and regional basis, which may be a challenge in regions with increasing tension and protectionist policies.
- What works for one market may not work for another, particularly when it comes to Web 2.0 versus Web 3.0, and in some less developed markets blockchain has the potential to play a greater role than in more long-developed regions. Each corridor is likely to be a unique mix, and it is not a matter of one or the other.
- Interoperability is a necessity but is not cheap, and the involvement of banks is vital to making it a success. Generally, interoperability is better solved within Web 3.0 than it is between Web 2.0 and Web 3.0.
- Stablecoins have a role to play, but retail stablecoin acceptance is still a long way off, and much further behind than was predicted a few years ago – there remain significant inclusivity challenges. Nevertheless, there is considerable money on chain and in some markets it does have the potential to shorten connections.
- Smartphone technology is key, but here inclusivity still remains a challenge in some markets, meaning that, for some, less technologically advanced solutions are going to provide more effective results.
- On regulation, the biggest challenge is on the consumer side, because this is where most innovation starts. In some cases, the best approach may be to adapt existing regulations to keep up with the pace of change.
- As the industry continues to develop, there is no silver bullet, and the right technology needs to be used for the right use case. This continues the long-standing focus on partnerships in cross-border payments, and also highlights the importance of taking small pieces of the pie, rather than trying a one-size fits all approach.
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