The Unified Ledger

Central Bank Digital Currencies (CBDCs) and the tokenization of private money deposits could revolutionize the financial system. Agustin Carstens suggests a unified digital ledger for both public and private digital money, enabling efficiencies like smart contracts and instant settlements. This approach could extend to tokenizing various assets, transforming governance by embedding compliance within transactions.

The Micropayment Alternative

Advertising became the business model of the internet because we did not implement micropayments. However advertising has created perverse incentives and it is time we returned to the original idea of the founders of the World Wide Web and build micropayments solutions for the internet.

The CBDC Alternative

Bitcoin should not be treated as a currency. But at the same time it should not be banned. Cryptocurrencies are permissionless systems that operate without intermediaries. As a result central banks cannot implement macro-economic measures in the event of a financial crisis. However, they are programable and can be incorporated into smart contracts offering a number of opportunities for digital financial inclusion. CBDCs are the best of both worlds combining the programability of bitcoin with the stability of fiat currency.

The Underbelly of Digital Lending

Just as data can be used to democratise credit, these technologies are easily misused. Today [[digital lending]] companies prey on the poor by offering high interest loans to advertising targetted to popup when they are vulnerable. Regulating this will call for coordination between the telecom department (for anti-spam regulations) and MeITy to regulate (in-app advertising).

Derived KYC

The cost of KYC is an impediment to lending below a certain ticket size. If we can permit lenders to use [[Derived KYC]] ensuring that it is only deployed in a digital context with all the required guardrails we will be able to radically reduce the cost of KYC opening up lending to the masses.