Strong democratic institutions are necessary to balance innovation and consumer protection, ensure healthy market competition, and operate digital public infrastructure. We help policy makers and market regulators understand the opportunities and evaluate solutions for improving the financial health of their citizens.
When people can spend their money using a digital payment method instead of withdrawing cash, their money stays deposited in their bank account until spent. This allows people to earn interest, track their expenses, and build a income history that can be used by lenders to evaluate their risk of default.
Carrying cash involves risk of physical harm for individuals, merchants, and other handlers. Digital payments make theft more difficult and recovery of stolen funds easier.
Digital payments empower women in patriarchal societies where access to cash is controlled by men by requiring individuals to have their own accounts and devices.
Digital payments provide additional economic incentives for governments to prioritize investment in literacy, Internet infrastructure, and digital identity infrastructure.
Real-time gross settlement and instant payment systems operated by central banks provide a neutral public utility for national money movement. They give smaller community banks the same speed, cost-efficiency, and reliability for payments once exclusive to large banks. Building these systems with free and open software standards and implementations ensures technology costs are not a barrier to adoption.
Finance is a heavily regulated industry due to its criticality to civilization and its long history of preventable harm. Industry incumbents benefited from having grown alongside the increased regulation. Regulatory sandboxes enable new financial services to enter the market with supervision, gradually increasing permitted activities and volumes as the newcomer demonstrates competency. Regulators can permit potentially disruptive experiments while learning alongside the innovators to refine rules that balance consumer benefit and protection. Successful graduates then force incumbent institutions to adapt and improve their offerings to retain customers.
Money can provide an incentive for someone to harm another person. The ability to gather such evidence aids prosecution of crime and potentially deters some criminal action. Any increase in surveillance capability must be balanced with functional protections of the human rights to privacy and liberty.
We advocate for policy and technical implementations that fully protect the privacy of the payer and provide as-necessary auditability of received payments. Payer privacy enables fraud victims to voluntarily provide evidence, banks to identify unusual income patterns as a first line of defense, and law enforcement to obtain evidence of income related to suspected crime. Furthermore, we believe levying of taxes is beneficial to society and that fair taxation requires governments to have knowledge of income.
Digital payments require Internet connectivity at some point to complete. Methods to make digital payments work temporarily offline have tradeoffs that can negate the benefits of digital payments. Instead of elaborate workarounds at the payment layer, we work to solve the underlying problem: ensuring Internet access is a resilient utility reaching every corner of the planet.
Digital identity systems allow people to prove who they are using cryptographic credentials instead of physical papers. This reduces the cost and risk associated with verifying customer identities remotely, which excludes people in remote areas and those without traditional documentation. Digital identity systems can also reduce fraud risk by creating auditable logs, which then gives regulators confidence in broadening availability of services.
Cash serves a purpose today and tomorrow. While the use of cash should diminish over time as more people are able to benefit from the advantages of digital payments, it shouldn't disappear. Multiple legal tenders provide resiliency during personal and widespread crises.