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Cointelegraph recently had the opportunity to speak with Pierre-Edouard Wahl, head of the digital blockchain services of PwC Switzerland, on the potential future of blockchain in the country.
Wahl, who noted that PwC Switzerland worked closely with the SIX Swiss Exchange on their announcement of a future digital resource exchange based on the distributed register, based on its belief that cryptography should be used to become widespread to allow people to regain control of their fingerprints.
This interview has been modified and condensed.
Molly Jane: Could you tell us how you got interested in the blockchain and cryptocurrency space?
Pierre -Edouard Wahl: I am an engineer at school. I've been in the blockchain space for several years, and I discovered a Bitcoin community that was very ideologically driven. The community has guided me to technology, not the other way around.
And so I decided to start a Bitcoin B2B exchange and I had some problems, because at that time it was very difficult. There was no clear regulation on exchange transactions and I looked for a big banking partner. Unfortunately, at the time, every time you mentioned Bitcoin, there were doors closed – so it did not work.
But Credit Suisse asked me if I was willing to launch their blockchain department, so I did it happily. I spent three years at Credit Suisse and after that left, I thought I'd be back in the startup world, but I really thought I had an opportunity at PwC to make an even bigger difference than in the startup world. Because we have a reach that is truly amazing – a very high level of established business, executive suites. So, this was the interesting part.
MJ: When did you hear about cryptocurrencies?
PW: The first time I heard about Bitcoin was in 2010 I was delighted with Bitcoin for the first time in 2011, and I entered the space full time in 2012. [19659002] I feel like it's an industry that has so huge potential, and I wish I could spend more time there. But yes, relative to the existence of this sector, I've been there for a while.
MJ: Do you really invest in the industry, do you own Bitcoin?
PW: I am completely invested. I asked my employers to pay me in the crypt, but it still has not worked.
I do not speak only of the path, I try to speak.
MJ: Since you say you have invested in the market for a while, have you ever bought something with Bitcoin? Like a pizza?
PW: I try to spend Bitcoin wherever I can. I see it as a way to spread the cost. So, yes, I spent Bitcoin.
In the meet-up of San Francisco – the SF meet-up of Bitcoin – we organized what we call "Bitcoin bombs". All the participants go to a bar and ask if they can pay in encryption, Bitcoin – and if we could not, we could move on to the next bar, until we find the first one that would accept it.
MJ: So how long did it take you to find a bar that would accept Bitcoin?
PW: San Francisco is quite open, so it usually went pretty quickly. And we were a crowd, so they had a good incentive. And at that moment, there was already BitPay, so if they wanted to get dollars, they could easily get their dollars instead of Bitcoin.
MJ: Are you afraid that in the next 10 years Bitcoin will go to a million and you'll be the guy who spent his Bitcoin in a cocktail?
PW: Well, it will only go to a million if it will be used. So, it's nice if the price goes up to a million, but it's not my priority. In fact, my priority is to try to support a world where people have more sovereignty over their fingerprints, have more sovereignty in terms of freedom of speech, freedom of movement.
And public blockchains need a token to incentivize the various parts, and if one of those tokens reaches a million dollars, it's great for investors and tokens. But the million dollars is not the final goal – the million dollars is only the means to reach the end
MJ: the main stock exchange of Switzerland, SIX, has recently announced that it will launch an exchange of "fully regulated" cryptocurrency next year. Could you talk about the role of PwC Switzerland in the announcement?
PW: We have been involved in this project and we are very proud to be partners in this new adventure for SIX. We hope it will have an impact not only on the Swiss financial center, but also on a global level.
I hope that other jurisdictions will follow, if they do not precede us – it is possible that some jurisdictions will launch on their behalf, I would say, great exchanges, before actually launching ours. But we are really excited. We think it will certainly provide much easier access to institutional investors. And we can not – I can not – Wait to see it happen.
MJ: Do you expect a lot of enthusiasm and energy from the Swiss community for the exchange of SIX digital resources?
PW: This project has grown from the demand of industry. There was a lack of infrastructure in our financial services industry – like big banks, small banks – and a lot of demand from their customers. So it came from the customers themselves who wanted to enter the space.
SIX basically belongs to the banks here in Switzerland, so it would not have happened without their approval – or the announcement would not have happened – without the approval of key stakeholders and major banks in Switzerland.
MJ: Do you think that SIX opening an exchange of digital resources in Switzerland will help the country to embrace more blockchain companies?
PW: Oh, we really hope so. Whether it is or not, I do not know. But it is hoped that banks will be more empowered with more infrastructure to actually start managing these new types of resources. I expect so, but I do not know for sure.
At the moment, I think that regulators need to be clearer enough for banks to start doing so. Banks do not necessarily have the right incentives to jump into space. Some will obviously find the right incentives, but I think banks have to start – rather than think in terms of efficiency gains – thinking in terms of new business models with this technology.
MJ: A report by Moody this spring found that the Swiss banking sector could be damaged by the blockchain, due to the technology's ability to make cross-border transactions faster and cheaper. Do you see a dichotomy in Switzerland that embraces this new technology that has the potential to damage its banking industry?
PW: I think, on the contrary, it can increase the business. Thus, taxes can be whatever tariffs they decide to apply, provided they are fair. And there will be competition between the various parties who want to provide this type of services.
Actually I think it will be an enabling factor. Yes, it could harm their existing businesses, but this is often the case with new technologies: either you adopt them and think differently about how these technologies will actually offer new solutions – as well as improve existing solutions – or just look at the improvements, and we are all falling down, because there are always less margins for everyone.
MJ: Could you tell me what PwC Switzerland does with blockchain?
PW: We have a fairly broad service offering. We work with start-ups, we work with consolidated companies. We offer – I would not say full to full, yet, because there is still, once again, a lack of clarity – but we offer the first inspections to ensure that things have been done correctly. And we hope that this allows us to do audits, if the regulators will allow us to do so by the end of the year.
We also work at the infrastructure level, we work with many global ICOs who want to come to Switzerland, from customers all over the world. I think we have a fairly broad offer: we offer services of legal fees, insurance services, engineering services, some kind of code review – I do not like the word audit there, because the audit makes it seem like it's bulletproof, which is not. It is just revised by another pair of eyes. And we are trying to grow our services.
MJ: I have heard that Switzerland has increased the regulation for ICOs to make it more difficult to own one in Switzerland. What do you think are the benefits that ICOs bring to the blockchain space?
PW: So you're definitely right. Increasing, yes.
When it starts from nothing, it will increase.
I think there is very little regulation in Switzerland, but there are guidelines that are good – I think they are not big yet, personally. I think there is a lot of confusion between utility tokens and payment tokens.
For me, the difference is that utility tokens with sufficient liquidity can become payment tokens. But there is clarity between asset-backed tokens and the other kind of tokens, and I think there will be more and more ICOs using asset-backed classification
I think it's excellent for the & # 39; industry – the blockchain industry – but also for the existing industry. It is much more efficient to make an ICO with a security token instead of an IPO – or as a way to raise funds in a VC round or seed round.
Unfortunately, there was a lot of publicity. The space is not yet mature and requires much more collaboration among the various developers to set standards so as to have new experiments in the ICO space.
I think a large part of the fund's distribution should not take place immediately after the ICO, but there should be some kind of thing or possibility of smart-contract to enable some kind of cliff for fund delivery, based on achievements. Vitalik [Buterin] proposed the DAICO – I think it goes in the right direction – it's not absolutely perfect, but I think it's in the right direction, for sure. I think there's a lot more to do in the ICO space to be right.
MJ: Could you expand more on how DAICO works?
PW: The DAICO concept is – on a very, very basic level – that allows token holders to vote for the release of funds in order to regain control of investors. And if they are not happy, they can vote against the release of funds and recover whatever Ether has been blocked in the smart contract.
MJ: Zug recently held a municipal vote on the blockchain. Do you think the voting blockchain will become more widespread in the future?
PW: I think, conceptually, that it is an interesting experiment. I'm still not convinced that blockchain is the right platform for voting. I think there's something really interesting about voting on blockchains, but I think the exciting parts are really cryptography, the kind of pseudo-anonymity you have.
But I think you need to be able to analyze the votes of your constituents. So I see the vote on the blockchain more like a kind of vote than a small-scale board meeting, rather than a national way of voting. I would expect more hard-proof boxes, black boxes to register votes, using some sort of encryption from all the participants and at least you can do a lot of research on the data – because you want to know who is happy, who is unhappy and categorizes your voters in order to better categorize how to respond.
MJ: As someone who has been in space for almost 10 years, you said that moving from regulation to some guidelines is already a step. How else have you seen the changes in the rules in general?
PW: I could have a very distorted version of things, because I was in San Francisco in the early days, but I feel like a lot of people have been waiting for New York to go out with some guidelines because they are so important on the international markets. And I think it was Ben Lawsky who went out with BitLicense and things just passed. There were more open jurisdictions on blockchain-based tokens, but they were rather shy – I would say, not very clear in public about their position. So, I would say that BitLicense was probably the beginning of the fall of the dominoes, or the beginning of the chain effect
MJ: Do you think that other countries will take the cue from BitLicense?
PW: Well, I think that countries that are afraid can always use BitLicense as a reference, and the countries that are embracing more can do better. But surely I think it can serve as a point of reference, unfortunately. New York has such a huge weight in the global financial sector that people must take into account what the United States says.
MJ: What would be your example of the right kind of regulation for cryptocurrencies?
PW: The right kind of regulation? I think it's early to say what's right and what's wrong. I think the right approach, rather than the right regulation, would be to embrace the community.
I greatly admire the Swiss regulators, who did a road show – I had never seen it before. And I would encourage many other regulators around the world to participate in a road show, talk to community members, try to understand as much as possible, what's happening not just with tokens, but with smart contracts – because most the regulation right now is around tokens.
The real novelty, I think, is more the smart contracts, the immutability: the tokens have existed forever: the dollar with gold was not gold, was supported by & # 39; gold. The actions are supported by the companies. So these are all some form of tokens, so tokens are not new. The novelty is that with blockchain: they are easy to publish and are very divisible, very transparent and have many new properties.
So I would like to push regulators to look a little closer at the current code, because we are building a jurisdiction where the code is law, and these jurisdictions in cyberspace will live and survive in any physical jurisdiction. And regulators will have to regulate the interactions of those entities incorporated into the cyber within their jurisdiction. And I think we are still a long way from this mentality when it comes to regulators – where we are only looking at what is in front of us – that is, tokens.
MJ: A lot of people think that the extraction of cryptocurrency has a negative environmental impact due to the amount of energy it uses. Does PwC Switzerland need to think about the energy aspect of blockchain promotion?
PW: At PwC, we are independent of the blockchain. A consensus mechanism is a consensus mechanism – and we do not really care, we only worry about it being safe. And so I agree that there is an impact on the environment, and this is an undeniable fact.
Now, I really do not think it's a waste of energy. I think this energy is put to guarantee immutability. I am anxious to see better consensus mechanisms. The only thing I like with proof-of-work is that it uses energy as part of the consensus mechanism and, therefore, you can participate in the consent mechanism wherever you are. It's independent of your stake, you can go to the North Pole and have access to energy, and you can go to the Sahara desert and still have access to energy. I think it's an interesting approach to keep it as decentralized as possible.
MJ: Thanks!
PW: Thank you.
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