The world has experienced outages that have paused payments of all types. Power outages that can impact entire countries. Cyberattacks, or run-of-the-mill (but massive) software glitches. The attack against Iran has led to the risk of data centers and energy infrastructure being struck by missiles.
These are classic black-swan events, that few take seriously but which have devastating ramifications should they come about.
Central banks and regulators of digital infrastructure are debating ways to address the payments aspect of a potential, comprehensive loss of electricity. Because even if the lights go out, there can be ways to enable some degree of economic activity to continue.
The old-fashioned way is to use physical cash. It’s a good idea to keep a stash around! But this is the digital age. We have moved too much of our commerce and daily needs online to think that some paper banknotes are the only or optimal solution.
Debating this with Jame DiBiasio is Joachim Samuelsson, CEO of Crunchfish, a Malmö-based startup that has its own solutions to enabling digital money to work offline. He served as its chairman when the company was established in 2012, and has founded or led multiple tech- and security businesses in Sweden.
Timecodes:
0:00 - Joachim Samuelsson, Crunchfish
1:38 - How big a problem do outages present in real life? Building for resilience.
4:04 - Is redundancy the best way to manage risk, rather than building bespoke solutions? The need for better solutions.
7:35 - What does ‘digital cash offline’ mean? Why not just rely on banknotes? Different approaches by central banks.
10:00 - Making physical cash work digitally, versus making digital cash work offline; questions of hardware security (mobiles).
14:33 - New solutions that don’t bring their own systemic risks.
18:54 - What Crunchfish is providing to India’s NPCI
21:09 - The challenge of getting lots of people to lock up money persistently. The impact of outages on individuals versus merchants, issues of scale.
28:30 - Central bank concerns: device security.
31:48 - Central bank concerns: double-spending and consumer confusion.
