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.

Zuckerberg Says Libra Can Boost Facebook's Ad Revenue, China Sees It as a Much Bigger Deal

Facebook CEO Mark Zuckerberg has, during a shareholder meeting, explained how the Libra cryptocurrency project will help the social media giant make money. China, on the other hand, published a book addressing the challenges Libra poses, arguing it could become the future of world currency.

In a transcript posted by Thomson Reuters, we can read Zuckerberg replied to a question asked by a shareholder on how Facebook will be making money off of the Libra cryptocurrency project. Zuckerberg responded by going into Libra’s potential impact on e-commerce on Facebook, and its potential impact on advertising revenue.

According to the social media giant’s CEO, Facebook does not charge a set price for ads and instead works with a bidding system, where every business trying to advertise will bid to compete for ad space. The system, Zuckerberg said, allows them to get the “lowest possible price.”

He added that combining ads with an effective payment tool such as Libra can benefit businesses further as it could make commerce more efficient:

If we can make commerce be more effective for businesses if when they run an ad, somebody who clicks on that ad is now going to be more likely to buy something because they actually have a form of payment that works that’s on file.

Advertising on Facebook, as such, becomes more worthwhile for businesses, which could in turn see them bid higher on ads and increase overall ad prices. This would effectively boost Facebook’s 0s advertising revenue.

Zuckerberg also reiterated other advantages of Libra, pointing out the payments infrastructure “hasn’t been updated in a very long time.” China, which has plans to launch its own digital currency called DCEP, sees Libra as more than a way for Facebook to make money.

Libra Could Hit China’s Efforts to Increase Yuan Influence

In a book published by the Central Party School of China to educate government officials on digital currency and propose policy measures to deal with emerging challenges like the Libra project, experts argue the latter is an excellent example of a public-private partnership and has the potential to become the future of world currency.

This would mean, according to the book titled “Discussing Digital Currency with Leading Officials,” that Libra could get in the way of the Chinese government’s attempt to increase the influence of the yuan.

Hongzhang Wang, former chairman of the China Construction Bank and one of the authors on the book’s preface, said in a recent article:

China originally relied on mobile payment to get ahead, but now Libra has the potential to change the game again.

Wang added that this would allow companies in the U.S. to build a digital currency system that could “threaten or even surpass” Alipay and WeChat Pay using blockchain technology.

Featured image via Unsplash.