Reflections on Paris Blockchain Week and the Web3 landscape
Over the course of the week, I was fortunate to attend a number of ‘side events’ happening in parallel, including ‘Circle Form Paris’, ‘Tokenisation et Tonic’ with Fireblocks and Polygon, ‘Web3 Success Stories’ by DFNS, and ‘Treasury in the Digital Money Era’ by Paris Blockchain Society and Accenture.
Paris Blockchain Week came hard on the heels of BlackRock unveiling its first tokenised money market fund, BUIDL, on public network Ethereum. The launch of the tokenised fund – whilst by no means an industry first – was unanimously greeted as a watershed moment for the industry. It seemed to validate the potential of blockchain technology to seamlessly integrate with traditional finance systems and revolutionise a seemingly staid asset management industry.
Accordingly, ‘real world asset tokenisation’ was the preeminent talking point of Paris Blockchain Week, with the overwhelming sense of the industry being at a tipping point.
We were pleased to hear that more and more PoCs are moving into pilot phase and even into production. Here are some of my key tokenisation takeaways:
- Public or private blockchain? Some of the world’s largest banking service providers have built mature blockchain offerings on private blockchain networks. For example, HSBC’s digital asset platform, Orion, serves as the foundation for its retail gold token, whilst JP Morgan’s Onyx network processes intrabank transactions with JPM Coin. However, a network is only as powerful as the number of participants using it, which is impelling a shift towards cross-chain interoperability protocols and ‘co-opetitive’ operating models (cf JPM Coin going live on Partior’s interbank network). At the same time, technological standardisation on public blockchains, like Ethereum, makes for a compelling alternative to so-called ‘walled garden’ approaches.
- Custody is a key enabler to the mass adoption of tokenised real world assets, allowing users to securely store, manage and interact with tokens and decentralised applications. Indeed, the maturation of the custody landscape was laid bare in Paris – where we gleaned how Fireblocks, DFNS, Metaco, Zodia Custody and others are partnering with Tradfi to integrate custody and wallet solutions. As a corollary, fewer financial institutionsare opting to build tokenisation and custody platforms in-house for cost, security and performance reasons – and to better focus on their core business lines.
- Potential far exceeds financial services. A personal highlight of PBW was to learn how start-ups are disrupting non-financial industries such as supply chain. Take Arianee, a leading provider of digital product passports (DPPs), which connects physical products (watches, fashion, wine, appliances) to their digital identity, offering key information on origin, history, ownership and carbon footprint. One trend driving adoption of the solution is the EU Digital Product Passport Regulation – which aims to make Digital Product Passports (DPPs) mandatory for every product in the EU by 2025.
Payments in focus
One area frequently cited as ripe for disruption is payments. At PBW, we learnt how Ripple, Circle and other PSPs are realising the ‘internet of value’ – whereby value is exchanged as quickly as we share words, images and videos online today. Although data moves around the world instantly, a single payment from one country to another is slow, expensive and unreliable. With the blockchain-enabled ‘internet of value’, a cross-border FX transaction can settle instantly and simultaneously.
Panellists were unanimous in their belief that cryptocurrencies will not displace or dismantle traditional payments infrastructure, but rather co-exist and integrate with it. In part, this is because cryptocurrencies do not enjoy the same consumer and fraud protections that govern FIAT currencies today. Rather, the focus is on identifying and testing discrete use cases where legacy payment processes can be improved using blockchain technology.
Worldpay's integration of stablecoins into their payment processes demonstrates how innovative solutions can streamline traditional methods. By allowing merchants to receive settlement in stablecoins, they not only expedite the payment process but also ensure 24/7/365 availability, a significant improvement over the delays of traditional banking systems. This is an increasingly important consideration in today’s high interest rate environment – with businesses looking for new ways to drive capital efficiencies.
Another area where stablecoins are taking root is in high-frequency, low-value payments, such as those made by TikTok and X (formerly Twitter) to content creators. Here, the cost to transact becomes prohibitively expensive due to the the number of intermediaries in the payments value chain – each actor taking a % sum. Stablecoins offer a unique opportunity to reduce these costs while maintaining efficiency and reliability. This illustrates how stablecoins are not only useful for traditional retail transactions but also for emerging digital economies where microtransactions are prevalent.
France emerges as a blockchain hub
Over the course of the week, it became clear that France is emerging as a leading hub of European Web3 development. The introduction of the Markets in Crypto Assets (MiCA) regulation has brought cohesive direction to the European digital assets industry – and France is clearly benefiting from this regulatory clarity. Added to this a vibrant Web3 community (Circle, Binance and Crypto.com all made Paris their European base), collaborative national regulators, a massive talent pool and a favourable funding environment, I’m excited to see how the industry evolves over the next year. Paris Blockchain Week, see you in 2025!
