Financialization of Everything With Emmanuel Danie

Hi, my name is San Tito. This is CryptoKid Podcast. I'm going to be talking to you guys about blockchain technology and cryptocurrency. Welcome to CryptoKid Podcast. So today I have a special guest, Mr. Emmanuel. And he is an Arthur of Financial Banking. I'll let him say the actual quote to the book. And he does business here in the United States. He's from Singapore. And he's well-known

in the industry that he's in. And he's very successful. And I'm pleasure to have you, Mr.em. Will. So why don't you give us a brief introduction about yourself and how you got into the DeFi space. Hi, it's sunny. Great to be talking to you today. I'm actually in China, in Beijing, China right now. I spend the time in China. I spend a portion of my time

here. I spend a portion of my time in New York. And I'm from Singapore. That's true. I just published my first book, which is The Great Transition, The Perth Association of Finances here. In fact, I have the book right here, right with me. And if you see on the cover, there's a picture of an ice cube. So what I'm saying to traditional bankers is that, the

finance industry is becoming increasingly personalized. And it's the result of not just, you know, because of banking becoming personalized. It's also, it's actually driven a lot by technology. So I'm also speaking to people in the technology industry, saying to them that the platforms that we now know that you were familiar with are going to disintegrate into greater personalization. And it's driven by all of the stuff

that you cover, study blockchain, crypto currencies, and, you know, and staking and all the activities that take place in decentralized by day. They excellent, excellent. And I'll have the link for those who want to read your book in the description down below. And so with this banking industry and the new technology that's coming out, how many countries have adopted cryptocurrency as illegal tender? Are you there?

Deposit on me? All right. Did you hear my last question? Or did it break up? Okay. Broko. Okay. So since you're like well known in the banking industry, how many countries have adopted cryptocurrency as a legal tender? Well, I think right off, as of now, legally, it's just El Salvador. You know, but in an informal sort of way, a number of countries have started seeing, you

know, Bitcoin as an alternative currency. You know, and I think that the people in traditional finance are wary of countries that friendly, to crypto as a alternative to fiat currency. And, you know, it's a state of play at the moment. It's in a state of play that, you know, every country in the world is looking at how El Salvador will eventually pay its debts, meetings, obligations,

balance is, you know, keeps its balance sheet balance, and so on. But Venezuela is a country which, white people, they're going to be able to do it. It's really accepts, you know, cryptocurrencies. And a lot of work is going into, you know, into putting in place the infrastructure so that people can use crypto on a daily basis. And I think that that's where the general use

of crypto will come into being. You know, already you see a lot of work being done to simplify the process of, you know, exchanging crypto between individuals, the lightning. And so on. And from there, I think that, you know, it's just a matter of time before, you know, crypto is widely regarded by central bankers. In fact, last year in November, and in December, the bank for

international settlement, settlements in in Basel released a paper outlining how central banks will start to hold crypto. So from 2025. So it is becoming an accepted form of assets on the central banks balance sheets. So even if countries don't accept crypto overtly, crypto is starting to become a part of the overall monetary assets of very countries. You know, and it's just a matter of time before

it becomes commonplace. Now, when I remember when back in 2017, and crypto currency was, and was highly like found upon towards central banks and all that. Now, why this rapid change? Why does some of change of heart with banks getting involved with crypto currencies and the defied network? I think that it's from, from my, the way in which I follow the industry. I think it's just

a, it was just a matter of becoming comfortable. So that crypto is here to stay. And it, you know, we've got to deal with it, whether we like it or not. The initial reaction of central banks, if you remember, was to propose central bank digital currencies, CBDCs. And I've, some of the countries were, and spoken with, you know, privately with several of the central bank governors

of the countries that have CBDCs running in their countries. And I actually, you can look, look them up. You know, which ones they are. And, and they essentially are saying to me that CBDCs are not working. You know, that it's so difficult to get it off the ground. And the, and the mechanism of CBDCs is that it actually disintermediates the banks in any case. In other

words, here, the central bank has introduced digital currency. We should buy the central bank. Now it doesn't need the banking system to get it to the end user. And then they scratch their heads and say, and say, well, you know what, we still need to use the banks. You know, and, and, and, and then they ran about in a roundabout way and, and coming to terms

with the fact that I think what we have here is a solution looking for a problem, which is, you know, the technology works. But why would we want central bankers to this, this intermediate commercial banks and the central bankers discovered something which the big digital payment players, you know, always knew, which is to introduce any form of new payments. You've got to do a lot of

push. You've got to spend a lot of money, you know, making all that use to it and creating critical mass. So the central banks went through a process learning all of this. And as they were learning crypto currencies were becoming increasingly better. And if you look at what central banks are doing right now on the central bank digital currency front, they just playing catch up. They're

trying to keep up with the technology that's being developed on crypto into operability, staking and, you know, the ability to, to, to have assets, you know, push from one token to another and so on. Now, and all of these developments on the crypto front are being done on open source platforms. In other words, hundreds of thousands of programmers, you know, playing around with different tokens and

coming up with applications. And central bank digital currencies just can't match. So I think that's what resulted in the BIS and actually the bank for international settlements, which is like the organization that holds all the central banks in the world. They decided that, you know, what we better start providing guidelines in terms of how, you know, we can start co-opting, you know, crypto currencies into what

we do on payments in the different central banks around the world. So that was the paper that they released in December last year, which is very important because that's the signal that they're getting comfortable with crypto currencies. You know, the funny thing about crypto currencies is this that it's not that Bitcoin went up to $65,000 and, you know, and that, and then if you hold your

crypto, the right crypto, you know, for a long enough time, you become rich. The magic of crypto currencies is that every one of us and introduce our own crypto. You can, I can, anyone can. And that's a feature of crypto, which I think that many of the policy makers in the world have not figured out yet that, you know, that that's what they need to deal

with, which is, you know, what are the rules by which the asset created or the value created in a crypto. If you issue the crypto, what is it? What about your crypto makes it valuable for your friends to want to accept it, you know, and so on. And so all the cryptos that are being created in the world, whether it's FTX or, you know, Luna or

whatever. They go to the market and they're going to be able to do that. They go through the same process. You know, so the governance structure, the ability to, you know, to discern which cryptos work and what which don't. That's the stall for the, you know, 20 or 30 years down the line. I concur. I completely because we need more, we need more accountability. And I

think more regulations will help that and keep things on a level of playing field. Now, I think that's a good thing. So you brought up FTX and Luna, do you have any recommendations for financial institutions that see its customers use their big accounts for purchasing cryptos. I think the question you're asking is based on, you know, the the market value of crypto. Now, so when it

comes to the market valuations of crypto. So if you ask the same question about securities about shares, you know, do you see that, you know, governments should protect their citizens from owning shares because it's volatile. It goes up and down. Well, we know the answer to that today. You know, you buyer beware. That is, you know, you, you have to do your own research and come

to understand what the underlining value of a of a security is. So, so long as we treat crypto as a security, we will have all these concerns. But crypto is on a journey. You know, it's, it's going through the phase where, you know, it's being traded and, and, you know, in a very speculative manner. But you know, come through eventually to a point where the utility

is greater than the speculative value of crypto. And that's where that's where the value of crypto is. That's what we need to get to. I really don't care, you know, what the price of Bitcoin or a theory about any of the of the cryptos in the market right now. You know, and, and as for crypto as a, as an asset. I think that Bitcoin has proved

itself to become the digital gold. As well, because, you know, it's immutable. It's, you know, it's a big deal. It's reliable as a technology and so on. You know, if it ever gets broken, then the story is totally different. But there is a need for gold as a, you know, asset of last resort to go digital. And I think that Bitcoin has, you know, answered that

question. Now as to all of the other cryptos, you know, they, they are benchmarked against, you know, the, the, the function of Bitcoin. And as a digital crypto and as against their utility, which is what are they created for? What problem are they created and solve? You know, and so we are in a bit of a, you know, intertidal zone here. You know, there, there is,

there's a reason to look at crypto as a investable asset. But there's also a reason to look at crypto as a utility. And I think that as it becomes clearer what exactly crypto is. You know, the market. So start to stabilize eventually. Oh, for sure, for sure. Now, how can you mitigate the risk associated with crypto currencies and cross border transaction? One of the, one of

the risks associated with between, for, which are mean for cryptocurrencies and cross border transactions. They are far more reliable than making a transaction through the interbank channel. And much far. And you know, arguably much cheaper, I mean, except for gas fees and so on. I think the problem with inter, you know, cross border transactions is, is the concerns that regulators have. Or, you know, I see,

know your customer. And to know that, that the two parties, transacting are not using it for illegal reasons. I think that's the only. And most, and if there are other reasons. This is the most single most important issue that we face for cross border transactions. You know, and, and I think that increasingly it's becoming clear that even where transactions are between anonymous individuals. The technology is

so well developed. That you're regulators are only just two steps away from identifying. You know, the, the parties in the transaction. And many of the platforms. Today insists that they, they need to do the KYC before the, let you all vote. They're platform to do a transaction in the first place. So I think that the KYC issue is a non issue today. In fact, if you

think about it. You know, a lot of the criminal activities and the, and, and the stolen cryptos in the last three to five years have been recovered. You know, and that's because it is possible to trace transactions. Now, I'm not aware of any other forms of technology limitations for cross border transactions. In fact, crypto is proven to be far more reliable than that any banking system

can provide in terms of cross border. Okay. Okay. I'm glad you shared that. Now does a global regulate regulatory framework exists for cryptos and digital assets already. We are not very getting there. You must read the BIS paper in December last issue, the December last year. And it demonstrated that the, there's a central bankers are fully cognizant of what they're dealing with. You know, they're not

like just trashing it or, you know, not applying their mind around all of the different issues that people in the crypto industry also need to be mindful of liquidity, you know, identity. And, and, and the governance structure for the different different cryptos and so on. And also the Wales, the role of the, the big players and the ability to move markets and so on. I think

that the regulatory regime now is the global regulatory community already quite, you know, conversant with what they're dealing with. And the BIS, the bank for international settlement. That's the, that's the global body that we, we keep our eyes on to see how, you know, crypto is becoming more mainstream. They're getting huge. It's, it's once the bull market keeps going up and Bitcoin, you'll start seeing, you've

seen it before Bitcoin going on the news and everything and people start taking a serious. But that I, in my opinion, I think that's just a hype. I think the real players are the ones that stick to it. And, and bear market. Now, what challenges do regulatory agencies face today? The most important challenge is, as I said, know your customer, the KYC issue and they insist

that any crypto being issued today. That wants to be on short in the different, in the different countries need to make sure that, that they know what they're doing. They know who's holding the cryptos and who the party side, the transaction. The second is really the, the issuers themselves, you know, the governance structures that they have in place to make sure that they are not defrauding

the market, which was the case of FTX where they issued a crypto. Anyone can issue a crypto. Anyone can even say what the price of the crypto is should be. And if the market believes that, you know, the market is not going to be on the market. So, there's no problem with that. And there's nothing holding on to that price. You are, you are walking, walking

towards the edge of the cliff. So, you know, and that's what happened in the FTX case. The issue of crypto gave it a prize, you know, had buyers. And, and then because people were buying it at that price, I think it's 180 bucks. And, and they use that that valuation to go out and borrow money from their own bank in, in this instance. And then they

use that, and then they use that, that valuation to go out and borrow money from their own bank in this instance. You know, another crypto provider could go and borrow money from another bank. And so the regulators want to make sure that, that, that the valuation of cryptos is not arbitrary or, you know, like anyone can, can provide that valuation on their own. So, so these

are some of the, you know, rules that they are putting in place with every fraud. The rules are getting better. You know, and, and I think that, you know, eventually, we'll have all the rules in place. And anyone issuing a crypto outside of these rules will just not find, you know, you know, people who want to trade with them or, or, or work with them on

their cryptos. And also, and you think about stablecoins. When, when a asset like a stablecoin is, is priced at say $1 of the low, $1. The local currency, the central banks are putting in place regulation, which requires them to demonstrate that they actually have the asset to back that $1. And that they have the accounting statements and the auditing process, and so on, in place, that

that makes sure that, that backup assets in place. So, these, these are works that are being done by all of the major. around the world. And I'm confident that as they get these rules in place, the funny thing is, as they get these rules in place, it will be the banks themselves that would want to hold cryptos and even issue stablecoins eventually. Wow, wow. Now, what

are the crypto policy goals for both financial services and crypto industries? Crypto policy goals. You know, the most important policy goal is to make sure that there is no one player that can that can, you know, dictate terms and act independent of the market. I think that that's the single most important goal. Whether it is on the basis of the market, the value issues that are

given to cryptos or even the liquidity in the marketplace that there will not be whales that that can act fraudulently or in their self interest and the expense of the rest of the market. And just like for any security, it's transparency and accountability. These are just the two most important goals. Excellent. Excellent. So what's next for you, man? Well, you know, the interesting thing about this

book that I've written is that as I was writing it, I really came to the realization that when I think about the future of money, I'm actually thinking about the future of society as a whole. So, you know, and and then when I talked about the past of money, the past of the banking system, the best about the banking system was built on the back of

stable societies. You know, so and I say this at a very, very profound level. When you look at a commercial bank, for example, the best run commercial banks are the ones which had the cheapest form of funding and the banks that have had the cheapest form of funding deposit funding with the ones that were closest to the local community. In the old days, it was because

they had branches and all the right places because the bank was run by someone that people trusted and so on. Now, these are the values in banking that are being carried into the digital world today. You know, and and when I think about digital banks, for example, there are banks that can that will be able to say that, oh, you know, because we have gone digital,

we are able to capture a lot more deposits than all our competitors put together. But because they don't have the social, you know, the social fiber that ties them to their depositor base, they're also totally capable of losing that that customer base that they're able to acquire quickly when the next competitor comes along and provides a higher rate, then you realize it wasn't because they had

the back of a coupon, which is carried on a blockchain. You know, and then in countries like the Philippines, I came across entire families that were earning an income to play to earn. And, you know, and examples like that. So I think that when we understand what banking is supposed to play as a role in the community, and then we extend that to what crypto and

digital finance is providing in terms of innovations. And the main thesis of my book, which is that, you know, finance is a very important thing. finance is becoming personalized. In other words, you and I can interact with each other directly. Now, that calls into question, what's going to happen to the institutions? You know, what's going to happen to the intermediation business and so on. And so

there are lots of questions that we're going to be asking at a community or social level, which today seems to be just a finance question. So I'm very, very interested. I travel around the world. I've been to more than 100 countries. I, I, I plan to see even more to understand, you know, where finance can play a role, you know, to advance local communities wherever they

are. And even in the most depressed countries, if you think about, you know, where the innovation and payments are taking place today, they're not taking place in the US. They're taking place in, you know, in Africa, where payments is being reduced to, you know, a transaction between two mobile phones. And that's it, you know, and it works. And people can create an entire bank around their

mobile device. You know, so, so this is what I'm applying myself to. And, you know, it'll be very interesting to see how society itself involves because of the innovations in finance. It's changing the world. It already has in so many ways and so many ways. So where can people find you and reach out to you if they have any more questions about, about banking and financial

institutions? Well, very simple. Immanuel Daniels.com. My, my book is listed there. And, and then I keep writing on my blog to, you know, improve on everything that I'm seeing. So not just the book, but the new ideas that are coming on. Okay. Is there going to be any events that you're going to be stopping by at? Well, I'll be back in the US, you know, in

April onwards. So, not not, not, well, I've got a couple of events in Berlin and, and so on. And in Vietnam coming up next month. So, so I'll be all over the place. But several events in the US in October. Okay. Okay. I'll be at the Bitcoin conference. You should, you should definitely stop by there. I think I should be, I will be at the Bitcoin

conference. Yes. Oh, hey. Thanks. You mind me about that? Yes. Yeah. Hey, we should catch up. And I'm looking forward to meeting a person. And, um, do you feel like there's anything that we didn't go over that you want to give a brief, brief talk about? I think, I think we've covered good ground. You know, it's so. I've said essentially what I want to say. I

love your work. I, I see that you'd speak to some very technical people as well. You know, and lots going on in the blockchain world. So, this conversation was with somebody who's not from the blockchain world, but, you know, from the traditional finance industry, looking into the blockchain world and, and, and then understanding where we're hidden. I'm so glad that you're making the push for this.

And one last question. How can I explain to somebody about cryptocurrency that's not backed by anything or cannot be backed? I think my cryptocurrency started with Bitcoin being immutable. It is the currency for the network world. You cannot use Fiat in the network world. And therefore, the network world needed a token that had a value that could be transmitted in the network world. And, and society

itself is becoming increasingly network. A lot of what we do today is not physical anymore. It's not between you and me. Meeting each other. We interact thousands of miles away from each other. And we need a token with which we can, we can, you know, transmit value to each other. Now that token is going to become even more complex as our own lives start to be

partially physical and partially metaphysical, which is, you know, the metaphors. And why that is. It's because the metaphors is a always on reality. It's not playing games. It's, it's an alternative universe that we can, you know, that we can switch into and switch out. And eventually, our lives are going to be partially physical and partially metaphors. Right. And, and for, for trans and in other words,

our friends are also going to be partially physical and partially metaphors. And so because I'm not going to be a person, I'm not going to be a person, I'm not going to be a person. And also the need to flip in and out between different realities, you know, physical cash just doesn't do it. So it's interesting that this technology has come to being a just the

time when human society itself is evolving that way. I appreciate you, man. I will definitely take that advice to heart. And I wish you the best with your endeavors and have a great, have a great night. I know it's like one o'clock. I really appreciate your time, man. I know you're busy and you're doing great work. And it's an honor to have this conversation with you.

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