Switching Lanes
Stuart Jones, Jr.

The current pandemic is advancing technology adoption faster than anyone could have imagined. In January of this year, what seemed to be five-to-seven years away is now being discussed at board meetings around the world. It seems institutions can’t move faster to say goodbye to the past and embrace a tech-driven future.

Case-in-point the financial services industry.

Financial institutions (FIs) must now increasingly meet their clients where they are. When was the last time you went to a bank branch? Hopefully it has been a while because either your digital experience is great or you are social distancing. Hopefully both.

For FIs, urgent rethinking is needed around onboarding and client experience, as well as how they can meet ongoing compliance expectations. The challenges associated with this shift become more pronounced when you move beyond the ease of business in America or Western Europe and service trade and payment obligations for counterparties around the world, issues we touched upon as part of Sigma’s recent webinar which you can re-cap here.

But, perhaps this is also a big moment for crypto too.

As populations increasingly go online and seek more direct and less expensive ways to move value (e.g, remittances), pay (e.g., retail and B2B) and hedge (e.g., holding crypto vs. fiat currency), crypto increasingly seems to make sense in our day-to-day lives. Jack Dorsey's Square certainly thinks so, as the recent patent holder of a crypto-to-fiat (or vice-a-versus) payment network. Imagine paying in dollars and the recipient receiving euros - or in the this case - Ether.

Among the most ambitious projects that seek to ultimately make crypto payments ubiquitous is Libra, which describes itself as ‘a new global payment system’. While Libra has had its regulatory challenges and naysayers since launch, this month saw the Facebook-backed crypto project appoint two important leaders in Stuart Levey, the Chief Legal Officer of HSBC and the former Undersecretary of Terrorism and Fiancial Intelligence at the U.S. Treasury Department and Robert “Bob” Werner who served as a senior U.S. Treasury official, global head of compliance at HSBC and as an advisor to Sigma Ratings among other things. They will serve as CEO and General Counsel respectively.

This move is important for crypto-watchers, because it signals a new, high-calibre approach by the Libra-project; one that will likely include deep work by the organization to both understand and work with governments to bring to life an ambitious project that has as its mission ‘empowering billions of people’. The addition of Messrs. Levey and Werner may also bring financial institutions back into the fray who left the Libra project, but that remains to be seen and will take time. Libra spells out its commitment to user privacy and AML on its website, though it is what will happen behind the scenes that will matter most. Afterall, what you say is less important than what you do.

In sum, we wish them both well and tremendous luck in pushing forward a bold agenda. With nearly 2 billion people without access to formal financial services (including many in the United States alone), perhaps some good can come out of this pandemic. Things like a “more inclusive economy” that is more honest and thoughtful about the risks to both its users and its infrastructure. And perhaps a more compliant one as well. In the case of Libra at least, its new senior-level hires bring tremendous experience, commitment and a track record for doing what’s right.

Let’s hope they thrive. To the future.


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