Antony Welfare from Ripple on the future of money – tokenising the future of innovation with CBDCs, stablecoins & digital assets

Antony Welfare from Ripple highlights the role of key blockchain use cases like payments and DeFi and the token types in transforming the future of money

Ripple is one of the first companies to talk about the concept of the Internet of Value. Could you please briefly present it? What are the main activities that occur within the Internet of Value, concerning businesses?

Ripple is a crypto solutions company that transforms how the world moves, manages, and tokenises value. Ripple’s business solutions are faster, more transparent, and more cost-effective - solving inefficiencies that have long defined the status quo. And together with partners and the larger developer community, we identify use cases where crypto technology will inspire new business models and create opportunities for more people. With every solution, we’re realising a more sustainable global economy and planet - increasing access to inclusive and scalable financial systems while leveraging carbon-neutral blockchain technology. This is how we deliver on our mission to build crypto solutions for a world without economic borders.

With the Internet of Value, a value transaction such as a foreign currency payment can happen instantly, just as how people have been sharing words, images, and videos online for decades. And it’s not just money. The Internet of Value will enable the exchange of any asset that is of value to someone, including stocks, votes, frequent flyer points, securities, intellectual property, music, scientific discoveries, and more.

Focusing on tokenising, what are tokens and what can we do with them?

We all hear daily references to ‘tokens’ and ‘tokenisation’, which is the representation of a digital asset - we all know the original blockchain ‘token’ of Bitcoin, which has taken several years to grow, adapt and has now become an important part of private, corporate, and government financial systems.

We are in a world where you can literally ‘tokenise anything’ from commodities to financial assets, real estate, wine, cars, art, and many more.

What is a Digital asset: ‘A digital asset can be defined as any representation of information tracked on a blockchain that confers ownership, access rights, representation, voting rights, or utility. Typically, digital assets are referred to as tokens, which are broken down into payment (digital currencies), utility (including governance and access), and security tokens (including equity, debt, and other financial assets). In the context of the enterprise setting, digital asset use cases can relate to tracking of information assets, utilising tokens for payments as stablecoins and transactionally (internally), accessing products and services, paying for them, raising financing, and the tokenised representation of assets.’ You can find more details on UCL: http://blockchain.cs.ucl.ac.uk/enterprise-digital-assets/

The World Economic Forum, for example, projects that 10% of the world’s GDP will be tokenised by 2027. How will businesses and individuals be impacted?

UCL report highlights the following points:

• The report serves as a starting point for an investigation into how enterprises may best apply digital assets.

• Real-work use cases to demonstrate the benefits of tokenisation, De-Fi, and CBDCs.

• How CBDCs have a place within the metaverse, providing an avenue of connection from traditional fiat currencies into the metaverse, with digital purchases having the capacity to be purchased seamlessly through CBDC/metaverse integration.

• The benefits of tokenisation, digital assets and CBDCs in promoting sustainability, fewer carbon emissions and reduced energy consumption.

Now, many are using tokens for exchanging, holding, and spending activities, but how do you envisage their use in the future?

Two of my favourite ‘future’ uses of Tokens involve Time and Expertise. We live in a world where our time is precious and the world we work in is global. We have expertise in many professions and areas, which often are complementary and built together to ‘make the person we are’. In order to get maximum benefit for our time, we need to make sure we can ‘package our time and expertise’ in order to help people understand our skills and expertise. To me this is Tokenisation of Expertise (or time) – in its basic construct, we will allocate a number of ‘Tokens’ of our time and expertise and these can be valued and monetised for services we offer. 

For example, If I am an expert in Blockchain technology, a pro golfer and a great chef, I have differing skills, and these can be charged at differing values – to the people who only want that skill/expertise at that time. This way, we can improve our skills and expertise in any areas we want, and still be able to monetise this to build a career and maintain the living standards we require.

Where do institutions see the most value in crypto?

Institutions see the most value in building trust and liquidity.

For businesses, blockchain technology has been revolutionary in its applications in financial services and beyond. The innovative technology is based on building trust to support industry collaboration and value creation. The technology can be deployed in various industry scenarios including media & entertainment, carbon markets, product provenance, electronic billing, supply chain management, copyright protection and cross-border trade, and remittances.

For Ripple, Crypto is in our DNA: our RippleX business unit is focused on making it easy for developers to build on and with the XRP Ledger, as well as partnering with others in the crypto space on use cases like NFTs and CBDCs (aka tokenised assets).

XRPL was one of the first altchains built with a DEX and native tokenisation abilities.

Ripple is continuing to innovate - for example, with NFTs, CBDCs - helping enterprises and developers prepare and build for a crypto-enabled world.

Ripple has several pilots in the progress for CBDCs, including the Royal Monetary Authority (RMA) of Bhutan and the Republic of Palau.

Could you please name some business applications for NFTs?

Some categories you might have read about include - Media & Entertainment Rights: NFTs to represent ownership (content & IP) of music, film, and other creative avenues. There is a massive industry ripe for disruption through disintermediation and increasing transparency and monetisation opportunities for creators and fans alike.

Another interesting example is Real Estate - leveraging blockchain for title provenance and real estate based DeFi: lower barriers to entry to the asset class, increased economic opportunity for many.

Finally, there’s Carbon Credits - carbon markets have serious problems today regarding efficiency (amidst surging demand), transparency, and tracking (double-spend problem) which NFTs can solve.

Provenance/Ensuring the Authenticity of Products - for example, NFTs can help solve fraudulent food products by tracking and tracing food products, artworks, fashions, and more on the blockchain.

Some see stablecoins as boosting the settlement function of cross-border payments. In your view, how are stablecoins reimagining the banks' infrastructure?

From my perspective, stablecoins are a critical part of the new payment system. Exactly what a stablecoin is and how it works is a whole separate interview! If we assume, for this article, that a stablecoin is a ‘digital representation of the sovereign nations currency’, then we can look at how these help provide a quicker, more secure and more transparent payment system.

Once a stablecoin is in use by a country, it can facilitate quick B2B, P2P and other types of payments for business and citizens. It can then be used to quickly settle cross-border payments – assuming the receiving country accepts your stablecoin.

Assuming the stablecoin is based on a payment focussed DLT, such are the XRP Ledger, you can then utilise the built-in speed and near-instant settlement that these ledgers bring. No current system is anywhere close to settling transactions – WITH finality – in the seconds it takes on the XRP ledger.  This is where the transformation and innovation begin. Once you can use stablecoins and CBDCs to make quick and small transactions, you open the country to significant new opportunities and innovations.

In your survey, the number of digital banking/fintechs expressed less interest in CBDCs' potential use cases such as intrabank/branch transfers, interbank payments, customer payments, etc. compared to other institution types such as retail and commercial banking, money transmitter or payment provider, payment aggregator, and investment banker/broker. How do you interpret it?

To me, the whole concept of a CBDC is still ‘under-defined’ – after working with Central Banks and the financial sector for a while, my personal view is that there is a lot of misunderstanding of what a CBDC is – which makes sense as CBDCs are not really defined yet - what I mean is there is no consensus of what a CBDC is and what it will/can be used for.

In my view, a CBDC is ‘a digital currency, issued by a central bank/sovereign nation’ – its use is to simplify the payments systems for a country. This means it should be able to be used by all people and have the same access and value for all. It should be used for all types of transactions (commercial and retail - using existing terminology).

What are the trends in crypto that you are personally excited about?

I have been in the crypto world since 2016 and seen many ups and downs of the crypto markets and many players come and go. The underlying technology is the key – DLT and Blockchain technology. The number of real-life uses of Blockchain technology grows daily; from payments to product tracking, to fitness app staking, to refugee tracking, to charity payments disbursement, to real estate contracts, and rights, to DeFi lending, to NFTs – both physical and digital.

The opportunities in this world are unlimited – as I mention in my book ‘Commercializing Blockchain’ – Within the Blockchain community, there is no old-school stereotypical majority and ownership. The fact that this is a new and innovative technology, which appeals to innovators, academics, entrepreneurs as well as the people who want a decentralised world, has led to an exciting and beautiful mix of people. The ability to see the foundations of a technology that allows more control for each person improves trust and allows more direct relationships (fewer intermediaries) has brought together everyone from every sphere of life.

Anybody with access to the internet can join the public blockchains and start to build solutions and apps. They can benefit from fast, cheap, and secure transactions and can start to ‘own’ their own futures and dreams.

The most exciting crypto trend is the development of a new payment system/s, which will allow anyone to be part of the system and allow everyone to benefit from what is a complex and privileged system. Once we enable micro-payments, we can pay fractions of money to creative people, to authors to artists – small amounts for one person becomes a worthwhile career for a budding artist.

Imagine, your favourite athlete with NFTs of them training, or competing, and sold to you as a fan and student of theirs – they can continue to build their career, and you can enjoy their career and learn from it, whilst owning an asset from them.

The crypto world is enabling innovation at a scale we have never seen before – the current lull in the markets is a great time to ‘clear out the trash’ and to see the winners starting to appear. Back in the .com boom was when the current winners emerged – we are at the same point in time with Blockchain technology – exciting times ahead.

This interview has been held during the pilot edition of Banking 4.0, held on May 30 and 31, in Bucharest, Romania. For the first time in Romania, central bankers discussed the future of finance in the new era of digital money.

About Antony Welfare

Antony Welfare is Senior Advisor, CBDC Europe and Global Partnerships, at Ripple. Antony has over 25 years’ experience in Retail and Consumer tech, followed by nearly a decade in blockchain technology. He is dedicated to building a world-class partner ecosystem to support the growth of Ripple’s connected CBDC platform through CBDC engagements in Europe and developing global partnerships. Antony co-founded the Retail Blockchain Consortium alongside University College London’s (UCL) Centre for Blockchain Technology, Oracle and MonoChain, to drive blockchain adoption across the retail value chain, and is the author of ‘Commercializing Blockchain: Strategic Applications in the Real World’, which was published in 2019 by Wiley.