April 4-Day 2 of the 2019 Fintech & Financing Conference in Toronto at the Bram and Bluma Appel Salon in downtown Toronto. Alan Wunsche, CEO, Tokenfunder talks about the potential for Stablecoins like the DAI, a hot trend in digital assets and crypto markets, to disrupt the central banks. As technology advances and companies jockey for position, there's one thing for sure, there's never a dull moment in the world of decentralized finance. Links https://www.tokenfunder.com/ https://fintechandfunding.com/ https://ncfacanada.org/

1. STABLECOINS:
“Will Central Banks Manage the Disruption of Decentralized Finance?”
April 4, 2019
Alan Wunsche
CEO, TokenFunder.com
@alanwunsche
@TokenFunder

2. “The ‘something’ that
connects the two transactions
is called money, and it has
taken innumerable physical
forms — from stones to
feathers to tobacco to shells
to copper, silver, and gold to
pieces of paper and entries in
ledger books. Who knows
what will be the future
incarnations of money?
Computer bytes?”
Milton Friedman, Money
Mischief: Episodes in
Monetary History 1994
“The one thing that’s
missing, but that will soon
be developed, it’s a reliable
e-cash. A method where
buying on the Internet you
can transfer funds from A to
B, without A knowing B or B
knowing A.”
Milton Friedman, Interview
with the National Taxpayers
Union March 1999

3. Decentralized Finance (DeFi)
Blockchain technology, cryptocurrencies and fractional tokens are enablers of
Decentralized Finance and Decentralized Applications
ü Capital raise (Regulatory-compliant
Security Token Offerings) -- startups,
scaleups, mature private companies
ü Asset-backed micro-shares
(e.g. Real Estate)
ü Micro-share Exchange (future)

4. Central Banks Manage Currency
Global Forex
Trading Volume
$5.1 T / day
Today, Central Banks maintain national monetary policy through
money supply and interest rates

5. DeFi Cryptocurrency Pairs
Cryptocurrency pairs are forming a parallel,
decentralized finance system.

6. A New World of Cryptocurrencies
•Volatility à is the new normal
•Manipulation à whale watching is in season
•Payment Rails à need price stability
Mass adoption may arrive when these
and other issues are solved.

7. Bitcoin
Volatility is the new normal

8. Ethereum Volatility
Volatility is a challenge for adoption as payment currency

9. 1. The changing nature of money
and the fintech revolution
• Money itself is changing. Micropayments. Cashless
• Cryptocurrencies such as Bitcoin, Ethereum, and Ripple are vying for a spot in
the cashless world

10. 2. A case for Central Bank Digital
Currencies
• A digital currency would be a liability of the state, like cash today, not of a
private firm.
• Security and consumer protection. Without cash, too much power could fall into
the hands of a small number of outsized private payment providers.
• Privacy… fully anonymous digital currency? Certainly not. Doing so would be a
bonanza for criminals.

11. 3. Downsides of Bank Digital
Currencies
• Risks to financial integrity. Tradeoff between privacy and financial integrity
• Risks to financial stability. CBDC could exacerbate the pressure on bank
deposits.
• Risks to innovation. the central bank focuses on its comparative advantage—
back-end settlement—and financial institutions and start-ups are free to focus
on what they do best—client interface and innovation

12. Growth of Stablecoins
3 Types of Collateralized Stablecoins:
1.Fiat-backed, 2. Commodity-backed, 3. Crypto-backed

13. Tether : Fiat-backed Stablecoin
The dominant stablecoin created with Bitfinex. Experienced controversy over
how much centralized fiat collateral exists in custody.

15. USD Coin: US dollar-backed Stablecoin

16. MakerDAO : Dai/USD Stablecoin
Dai is a Crypto-backed stablecoin with a decentralized mechanism
to maintain stability.

17. Maker CDP* Overview
Dai smart contract holders function together like a Decentralized Central Bank
* Collateralized Debt Position

18. Dai Stability
Regardless of ETH/USD, Dai/USD
has maintained ~$1/Dai

19. Example: Pay with DAI at xDAI.io
Burner Wallet applications are making onboarding
Demo: Point Phone camera
at this Private Key QR Code
to load this Burner Wallet.
Wallet Address

20. DAI Used for Real World Payment

21. Maker Collateralized Debt Position
•A CDP is an Ethereum smart contract that
enables the generation of Dai stablecoins against
the collateral that you lock up in the CDP until
you pay back the Dai you generated.
•Dai can be spent like USD (wallet to wallet)
•CDP has a stability fee to the network of 7.5%

22. Conclusions and Crystal Ball
1. Stablecoins will grow in adoption as crypto payment
option.
2. Central Banks will release nation-state stablecoins,
and IMF will have digital SDR (e.g. SAGA)
3. More private crypto-stablecoins will be launched (e.g.
JPM Coin)
4. Regulators…. may yet deem non CB crypto-backed
stablecoins (e.g. Basis) as securities, paving way for
more (2).

23. Thank you!
@alanwunsche
alan@tokenfunder.com
Find this presentation:
https://github.com/alanwunsche/bio