It’s always a pleasure to talk with my dear friend Paolo Sironi!
In this episode of Paolo’s Bankers’ Bookshelf, we discuss how CBDCs are poised to change our world.
To keep it relevant for bankers, we examine the opportunities and threats CBDCs pose to banks and the profound societal changes they could bring.
Now, to show how cashless China is and what a good friend Paolo is, the last time we were in China together in 2020, Paolo didn’t have WeChat Pay, so I had to pay for everything, and he paid me back in cash from an ATM!
👉TRUTHBOMBS (selected highlights)
6:27 Some people, some listeners, may be saying China isn’t relevant, it’s too far away, it’s too different. My answer to these people who think that China is a decade ahead of the West in payments and shows the West’s future.
7:18 The biggest trend that we have to watch on a global level is real-time payments. Note that I didn’t just say CBDC, which is what people might expect. I also love India’s UPI and Brazil’s PIX account-to-account (A2A) payment systems.
12:44 There are people out there who say that CBDCs are a solution looking for a problem, to which the reply is that the problem has been found long ago if you’re willing to acknowledge it. The problem is that the United States pays annually 2.3% of its entire GDP to Banks for payment services, and the European Union pays 1.4%
15:47 One of the things that should stick out in European bankers’ Minds is that 60 plus percent of European payments are handled by American-controlled payment systems Visa and MasterCard.
16:15 It doesn’t seem to make the news, but it should when the ECB says we need our own cash transfer system or digital payment transfer system so that we cannot be sanctioned.
19:27 People don’t understand how little privacy you have now, and I will state upfront that the digital Euro, the digital RMB, the digital rupee in India, and the digital real in Brazil all will have higher degrees of privacy than the credit cards and plastic debit cards that you are currently using.
24:12 The good news for the banking system is, of course, that CBDC will not destabilize or break the bank. It will not cause it to fail. The bad thing is that the payment system revenue, particularly that tied to Exchange fees from debit and credit cards, will be reduced.
32:30 Do not pine or weep for cash. Remember, China serves as an example of this; crime statistics went down tremendously once China went cashless. People don’t carry cash, so there’s no reason to rob you or stores.
Podcast Links to this episode:
Apple Podcasts: HERE
Spotify: HERE
Bankers’ Bookshelf Website: HERE
Youtube Link: HERE
