Lander Rubio tells us about financing and the importance and uses of blockchain technology within this area of the global economy.
Every Tuesday, the Bit2Me team holds a virtual round table with well-known figures from the cryptographic and financial world. So on this occasion we have the presence of our special guest Lander Rubio, Graduate in Economics and a recognized and appreciated Professor at the Blockchain Seminar at the University of Deusto. In this virtual conference, Lander will tell us about what is financing? And what are the possible uses of blockchain technology within the economic field? You can't miss it.
Also present during this conference were the Commercial Director and CSO of Bit2Me, Javier Pastor, and the Director of Public Relations and Social Networks, Giovanny Montealegre. Both, in conversation with Rubio, give us his perspective on the importance of blockchain within the current financial sector.
Lander Rubio is the founder of the Bitcoin unit in Bilbao and co-author of the book Blockchain Community. In addition, she has a Master's degree in Finance and Strategic Business Management, as well as a specialization in Fintech from the Massachusetts Institute of Technology.
Rubio has held various positions throughout his career and professional life. He began in the world of finance and economics, especially in the development of the banking sector, where he achieved recognition and merits at an international level, such as a qualification as Digital Asset Array (DAA) Manager by Iconomi, a digital asset investment platform.
Likewise, this economist has focused his interest and career on the development of the industry Fintech, where he also achieved merits on an international scale. In this sense, Rubio Lander was certified by the MIT in his Fintech program, a fact that led him to awaken a passionate interest in technology blockchain and for the development of the many applications that it has and will have within the financial sector.
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Beginnings in Bitcoin and Blockchain
Lander Rubio tells us that he heard about Bitcoin for the first time at the end of 2010, when the technology was just beginning its development. By then, Bitcoin did not catch his attention, as he considered it to be a form of money similar to the virtual token known as linden of the famous game Second Life.
Later, in 2013, Rubio heard about blockchain technology, but still decided to remain skeptical of this innovation. Furthermore, he tells us that at that time, there was not enough information available to document what this technology was about, which is why he let it pass without investigating further.
It was not until 2015, when an explosion and notable growth in people's interest in blockchain began, that Rubio became interested in the technology. Therefore, associating it with his work environment (Fintech), Rubio decided to learn and delve deeper into this interesting topic, which was also beginning to penetrate the minds and hearts of society.
“At that time it was very fashionable to talk about blockchain. Blockchain was going to change everything, blockchain was going to change all processes. When you start to investigate a little, blockchain without a consensus between the parties, that is solvent and that is in some way resilient, makes little sense. And that is when you get to Bitcoin”
This is how Rubio expressed himself during the conference, pointing out that it was the form of consensus that this technology used that truly captivated him. The more I researched and learned about blockchain, the more sense Bitcoin made to me.
Since then, Lander Rubio has focused on studying and delving deeper into the development and multiple applications that blockchain has in the financial sector. Likewise, he tells us that although for that year the information about both technologies was still scarce and with little content in Spanish, the wiki at that time that Bit2Me had available for users and interested parties was very helpful to him.
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The perfect time to know and learn about Blockchain and new technologies
Perhaps it is common that many people tend to think that it is a little late to enter the world of blockchain and the development of new technologies, since blockchain is a technology that has been on the market for more than 10 years, just like Bitcoin. . But as Rubio tells us, any time is perfect when you want to learn, especially about something as interesting as blockchain.
“It is always a good time to learn new things and to try to educate yourself on topics that can be so exciting.”
Rubio considers that 2020 is the perfect time to delve deeper into this technological innovation. Bitcoin, from Rubio's point of view, has great value and importance within the current economy. At the same time, he believes that it could become a true form of digital cash.
In this sense, Lander Rubio expressed that although Bitcoin is not seen as a form of money from the legal field, it is a financial asset. An asset that meets the terms necessary to be considered a usable form of money. First of all, Rubio points out that Bitcoin is a medium of value exchange with great properties. Furthermore, he points out that for many users, This cryptocurrency is a great haven of value through which you can protect your money. Likewise, Rubio notes that, as a unit of account, Bitcoin is divisible into many parts.
“Due to the essential characteristics that Bitcoin has, such as its total emission being limited to a maximum of 21 million, it does have certain characteristics so that it can meet the 3 characteristics of money. Both being a store of value and being a medium of exchange. It is an internet-native asset that can travel anywhere in the world without too many limitations. And as a unit of account, in the end it is divisible into one hundred million parts.”
Therefore, he believes that Bitcoin has the capacity to be an excellent form of money in the future; although its growth and development is currently in process.
Lander Rubio: What is the current fiduciary system and what is its importance in our society?
Rubio considers that it is vitally important for society to know how the monetary system in which we currently live works. Thus, he highlights that in the first place it is the central banks that are responsible for issuing the currency of each country, and not the governments as is often thought.
The governments of each country are the ones who spend money and issue debts to finance their nation's own budgets. Debts that in turn are purchased by commercial banks, who use them as collateral to obtain liquidity and request money from central banks.
Likewise, Rubio highlights that central banks operate under their own bases and statutes. In this sense, central banks are responsible for controlling and maintaining moderate inflation within an economy. An inflation that is measured between %1 and 2% annually, Rubio tells us.
Central banks also have the responsibility of preventing inflation from falling into negative values. Therefore, it stands out that these banks have the autonomy to decide how much money they should issue and when they should do it, in order to comply with their statutes.
“Limits, given what we have seen, there are no limits beyond those that its own governance decides. That is, if they decide to emit more, they can emit more.”
For his part, Rubio points out that right now central banks are avoiding the possible risk of negative inflation, also known as deflation. That is, there is no drop in the prices of products, goods and services. Since this fact would cause serious havoc in the world economy; such as the paralysis of the economy, the reduction of jobs, reduction in production levels, and much more.
Current economic measures
Currently, new financial measures are being taken as a way to cope with and minimize the risks of the current economic crisis on the population. Referring to this, our Commercial Director, Javier Pastor, highlights that the Federal Reserve System (FED) of the United States is granting stimulus checks worth $1.200 to millions of American families. A measure that may be a good idea in principle, but that in reality can have negative effects within the economic system.
The economics specialist explains to us that if the measure of granting money is carried out temporarily, its effects may be null within the economic sphere of the country. While if it is a constant event or one that will be done frequently, then it can have effects. For example, Rubio points out that productive investments make much more sense to help raise a nation's economy than the fact of indiscriminately granting or transmitting liquidity to society.
In this sense, Lander Rubio believes that:
“In the specific case of the United States, I think it has a lot to do with politics; It is not such an economical fact. But it has to do with the own politics of the people who are leading the country.”
Disruptive technologies: cryptocurrencies, tokens and new central bank digital currencies
The current progress and acceptance of blockchain technology is giving rise to the creation of new technologies, which go far beyond cryptocurrencies. At the time, and still today, cryptocurrencies represent a disruptive and transformative change for our society. However, with the development and advancement that currently exists, these changes are increasingly significant and visible in other areas.
Today central banks around the world are considering creating their own digital currencies. In this sense, the Central Bank of China announced the launch of the digital yuan, a digital currency known as CBDC. Likewise, the United States and the European Union are working on the development of their own digital currencies.
All of these transformative changes are possible thanks to blockchain technology. That opened the doors to the creation of cryptocurrencies, and now it is implemented and adopted to cover multiple areas of society.
In reference to this, our expert Lander Rubio considers that the adaptation of blockchain by banks and governments is a significant step to improve everyday life.
Likewise, the influence that Bitcoin has had and maintains on these new implementations is evident. In this sense, Rubio considers that Bitcoin has had an influence that has helped bring about a change and a considerable improvement in the efficiency of the system, although it does not necessarily mean a change in the system itself. So far, Bitcoin allows users to use their money independently without the need for trusted intermediaries. That is, the money can be managed by the owner without having to use a bank or some other entity.
Adaptation of the current financial economic scenario with cryptocurrencies
The current financial scenario regarding cryptocurrencies has great analogy with the adaptation phases explained by the renowned speaker Andreas M. Antonopoulos, who refers to the fact that in the face of a technological innovation such as Bitcoin and cryptocurrencies, people and the system tend to express rejection in the first instance. At first, they remain incredulous, then they begin to formulate attacks and criticisms, to create competition and finally they end up adapting to the changes.
Thus, Lander Rubio considers that although criticism of cryptocurrency and blockchain systems continues, they have diminished compared to the beginnings of these technologies. Therefore, banks and governments are beginning to adapt to the development of new technologies and take advantage of the advantages and benefits that they offer for society.
“I don't think Bitcoin will come to replace everything... Or at least I doubt that I will see it in the years I have left of life... But I do believe that Bitcoin is an alternative... In fact I think that the adoption of cryptocurrencies by “Companies are going to come due to pressure from consumers themselves.”
For his part, Javier Pastor also expresses that the adoption of Bitcoin will be something generational, that it will be better with the passing of new generations, just as happened with the Internet at the time, which began to be adopted by several people, in various parts of the world and for totally different reasons. But today they have made the Internet an indispensable tool in everyone's life.
The role of exchanges versus traditional banks
Currently, exchanges and banks work in a very similar way, considers Rubio. To the point of pointing out that the only difference that he notices between both entities is size and solvency, but that in general they are very similar businesses.
Exchanges currently offer custody, exchange, and lending services. So traditional banks and these cryptocurrency exchanges can be considered as competitors with each other.
“The exchanges themselves have more possibilities of growing enough to become traditional banks, having banking licenses. In fact, CoinDesk bought a bank, 1 or 2 years ago… So, if you buy a bank, you can now operate as a bank.”
Likewise, our expert believes that the Fintech industry will be the first to adopt cryptocurrencies as such. For his part, at the point where cryptocurrencies and blockchain technology are adopted on a massive scale, Rubio points out that the way the financial system works with new technologies will be perfectly compatible.
The basis is currently being created for both systems to function in perfect symbiosis. Loans and investments in cryptographic systems are currently made thanks to ecosystems DeFi.
In DeFi, a user can request a loan and place their bitcoins or other cryptographic tokens as collateral.
So, based on all the aspects presented above, Rubio considers that a competition scenario may occur between currencies and existing crypto assets. There will be inflationary currencies and deflationary currencies, like Bitcoin. Even within the cryptocurrency ecosystem, Bitcoin will not be the only cryptocurrency available. There may be other cryptocurrencies that function as a value exchange and even tokens that represent value within other types of assets.
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