World Economic Forum's Sheila Warren: Smart Contracts Won't 'Upend Legal Sector'

  • World Economic Forum's head of blockchain efforts, Sheila Warren has said that central bank digitial currencies (CBDCs) could have legitimate use cases.
  • She also thinks blockchain technology will be integrated into the core stack of technologies in the next 10 years.

Sheila Warren, the head of blockchain and distributed ledger technology (DLT) efforts at the World Economic Forum (WEF), a Switzerland-based non-profit organization “committed to improving the state of the world,” recently shared her views and insights with CryptoGlobe regarding central bank digital currencies (CBDCs).

Warren, a Harvard law school graduate, said that the WEF “believes there is a use case for CBDCs.” She remarked:

We are actively tracking CBDC experiments worldwide. We have painstakingly created a trusted community of (approximately) 40 central banks from [throughout the world], including frontier and G7 economies, that are sharing learnings and findings, and we will be shortly be issuing a whitepaper related to this work. Threshold issues include know-your-customer (KYC) and anti-money laundering (AML) [requirements].

She added that the WEF was “following e-KYC efforts to see how they might support CDBC issuance.” Warren further noted that the WEF aims to “surface principles that could guide responsible development of CBDCs.”

Interestingly, Warren believes there’s also “a different use case for cryptocurrency, and we should not underestimate its importance even as we acknowledge the importance of CBDC experimentation.”

When asked about what role, if any, smart contracts would have in the foreseeable future, Warren remarked: “I do not think that smart contracts will upend the legal sector, for the record, but I do think they will enable efficiencies in markets like insurance and travel (as examples).”

Blockchain Use Cases: Supply Chain, ID Verification, Document Authentication

In response to a question regarding the potential role of DLT in future economies, Warren stated that supply chain management processes could be handled more efficiently on a distributed ledger-based software system. According to the former VP of alliances and development at TechSoup, other potential use cases for DLT such as ID verification may not be so simple to implement. She explained:

I think there are additional considerations around beneficial ownership of data that make the ID verification space very complicated, but I do think DLT can help address some concerns of the responsible data community once the tech is a bit further along. The same applies to document authentication, with zero knowledge proofs potentially providing an enhanced privacy layer that has been missing.

Elaborating on the role organizations like the World Economic Forum can play in the responsible advancement and adoption of DLT, Warren said: 

Our goal is to focus on the development of policy that can shepherd responsible use of DLT, mitigating risks while amplifying opportunities. In many cases, the technical build itself is not hugely complicated; it’s consideration of the accompanying policies that serves as the barrier to wider adoption. In addition, as a truly neutral and objective participant in the ecosystem, the Forum can help bridge gaps in understanding that can pave the way for broader comfort, which can lead to adoption by large players such as governments or entire sectors.

She continued: “our view is that DLT is a foundational technology that when considered alongside other [4th Industrial Revolution] technologies like artificial intelligence (AI)/ machine learning (ML) or Internet of Things (IoT), can transform entire sectors in ways that benefit society.”

"Blockchain Is A Team Sport"

However, Warren believes emerging technologies might not be able to integrate into existing technological infrastructure “without a neutral shepherd focused on developing sector-wide cooperation.” She added: “As I often say, blockchain is a team sport, and the Forum is uniquely situated to facilitate the development of cooperative models of engagement that can realize the full potential of DLT."

When questioned about the potential impact of blockchain technology in the next 10 years, Warren said:

I think by then we will have stopped talking about blockchain technology, and it will be part of a tech stack that delivers a distributed, secure transaction record. I also think we will have sorted out smart contracts and they will be fairly ubiquitous, enabling efficiencies across many sectors. My hope is that we will have re-imagined economic and business models in a way that emphasizes stakeholder engagement rather than shareholder extraction, creating a more sustainable and balanced economic system for all.

Coinbase Commerce Now Lets Merchants Accept USD Coin (USDC)

On Monday (May 20), Coinbase announced that "Coinbase Commerce", which provides non-custodial cryptocurrency payment solutions, now allows businesses to accept fully dollar-collateralized stablecoin USDC.

History of USDC

As CryptoGlobe reported on 26 September 2018, "USDC Coin" (USDC for short) was launched on that day by Goldman-funded FinTech startup Circle Internet Financial (better known as "Circle"). This is a regulated fully-collateralized dollar-backed stablecoin that was originally announced on 16 May 2018. USDC is based on an open source fiat stablecoin framework developed and governed by the CENTRE project.

Circle said at the time that the problems with existing fiat-backed solutions (such as Tether's USDT) were that they "have lacked financial and operational transparency, have operated in unregulated jurisdictions with unknown banking and audit partners, and have been built as closed-loop ecosystems and closed proprietary technologies."

In contrast, Circle's USDC stablecoin deals with these issues by "providing detailed financial and operational transparency" and "operating within the regulated framework of US money transmission laws, reinforced by established banking partners and auditors." USDC tokens are ERC-20 compatible (meaning that they run on the Ethereum blockchain); they are minted, issued, and burnt/redeemed based on network rules defined by CENTRE. 

Coinbase's Previous Involvement With USDC

On 23 October 2018, Circle announced that Coinbase (another member of the CENTRE consortium) was making USDC available to its customers on Coinbase Consumer and Coinbase Pro, and that customers could "tokenize dollars into USDC and redeem USDC into dollars through both Circle and Coinbase."

Then, on May 14, Coinbase said via a blog post titled "Expanding USDC crypto trading globally" that:

  • It was making USDC trading available on Coinbase Consumer and Coinbase Pro in 85 countries.

  • It was doing this to help "accelerate the global adoption of crypto trading" and to provide wider access to "a stable store of value."

  • There are more than 300 million USDC tokens currently in circulation today, and that USDC is supported by 100+ ecosystem partners.

  • Stablecoins "have the potential to materially improve the lives of people in countries where inflation is eroding wealth." 

  • Coinbase serves customers in 103 jurisdictions.

Coinbase Commerce and USDC

Coinbase Commerce was launched on 14 February 2018. Coinbase described Coinbase Commerce as a new service that "enables merchants to accept multiple cryptocurrencies directly into a user-controlled wallet," and that in contrast to its previous merchant products, it was "not a hosted service, so merchants have full control of their own digital currency." Four cryptocurrencies were supported back then: Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), and Litecoin (LTC).

Coinbase Commerce can be "directly integrated into a merchant’s checkout flow or added as a payment option on an e-commerce platform." Initially, the only e-commerce platform supported was Shopify, but on 6 August 2018, support for WooCommerce was added.

Yesterday's blog post said that now Coinbase Commerce has added support for stablecoin USDC, thereby allowing "businesses to accept payments online in the same way they’re able to accept cash in-store." 

Here are a few things to note about Coinbase Commerce:

  • "Coinbase Commerce doesn’t charge any fees to process payments."
  • "Coinbase Commerce accounts are completely separate from Coinbase accounts."
  • "You can use the withdraw functionality to send cryptocurrency to an address associated with your Coinbase account."

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