Interview with Dr. Daniel Diemers, blockchain expert at PwC’s Strategy&, about the Swiss crypto-franc and how blockchain can keep up with the government.
Blockchain technology is predicted to have a great future in Switzerland. What does this mean for the labor market, what does the Swiss government think about this technology and what does blockchain need in order to be adopted by the people? Cointelegraph discussed these questions with expert Dr. Daniel Diemers at BlockShow in Berlin.
Daniel Diemers worked as an entrepreneur for several years in the field of internet-based early warning systems. He has been a partner at PwC Strategy& since 2005, where he advises banks and regulators in Europe and the Middle East on digitalization, fintech and blockchain. Daniel Diemers is also a co-founder and board member of the Swiss Finance + Technology Association (Swiss Fintech) and a fintech investor himself.
About PwC and blockchain
Cointelegraph: As early as mid-May, there were reports that PwC's Strategy& was working on blockchain in the logistics sphere. What does PwC’s work with this new technology look like?
Daniel Diemers: We have our own global blockchain team. For example, I’m head of the blockchain department in Europe and the Middle East. We have many employees who are well familiar with the subject and we are not only working on the use of blockchain in logistics but are also on implementing blockchain in the banking and agricultural sectors. I am a strategist, and I have to clarify various questions regarding blockchain: coding, protocol, cybersecurity, taxes, accounting and how blockchain can be used in this sphere.
About using blockchain and its impact on the job market
CT: In your opinion, what fields need blockchain technology the most?
DD: That's a very good question. We are discussing banking, insurance and ICOs — as well as financial services — a lot. I see a particularly huge need for this technology right here. But if you look at how the blockchain will develop and where it will be used, according to statistics, you will see a lot of services and applications outside of the financial world. For example, the energy sector, agriculture, healthcare, but also logistics [and the] Internet of Things (IoT).
We expect that the blockchain will be used in 80 percent of the industry. Administration, voting, banking, insurance — these are the first steps.
CT: Many politicians and heads of major financial institutions are critical of cryptocurrencies, but have positive things to say about blockchain technology. Commerzbank reportedly already has a ”DLT Lab.“ What do you think is the reason for that?
DD: That was the case last year. I believe that their opinions are slowly changing. Now there are more and more banks that are also dealing with cryptocurrencies, having their first projects. There are also banks, now, that accept cryptocurrencies as a means of payment. I am sure we are in a very exciting process right now. The entire financial services industry, banks and insurance companies will be dealing with cryptocurrencies.
CT: Are you not worried that blockchain might replace many jobs in the financial sphere?
DD: I don't understand this fear, yet. Mostly we are discussing artificial intelligence and robotics. Blockchain can have a similar impact, of course, because it can actually increase productivity in an efficient way. Some things I had to do before — such as bringing different data systems together — I may not have to do with the help of blockchain anymore. But I don't feel like blockchain is a so-called job killer. But if we look at this technology in connection with artificial intelligence then yes, then a lot of jobs could disappear.
CT: Are you saying that blockchain and artificial intelligence could replace you?
DD: I’d do some reflecting here. I don't want to think that these two technologies and robots can replace me — and I don't recommend thinking that way. I think the next five to 10 years will be very exciting and we’re going to have to expect many changes. You don't have to be afraid of such changes — and when people are a little afraid, it's just a human reaction to new things. Like, I hear about cryptocurrencies for the first time, I don't like them, so Bitcoin is not good. But soon that will change. Now, the next generation is coming up. Young people growing up with smartphones. They are like, my bank is my smartphone. They don't even get to see any plastic cards — they’re shopping online. And they think cryptocurrencies are normal or even cool.
About “Crypto Valley” and Swiss e-franc
CT: How popular is crypto in Switzerland? When will the Swiss people be using cryptocurrencies as a means of payment?
DD: Crypto Valley in Switzerland has not existed for long — it’s less than two years [old], but it has grown enormously. Two or three years ago, there were perhaps 10-15 companies, while today, there are around 300-400 companies that already have a branch in the Swiss Crypto Valley — and all of them are involved in the crypto sphere: ICOs, blockchain startups. The Swiss people are also aware of these developments because there are a lot of media reports about them, people read and talk about them. The Swiss government is also trying hard to understand it.
The Swiss Federal Council has established a blockchain task force to promote its adoption in the country. I was also allowed to have a seat there, which was so exciting because we were 35-40 experts from all over Switzerland, from different fields and with different experiences. Together we pondered questions about what our citizens are interested in, what is positive and negative, what the state yet has to do and, yes, whether the state has to do anything at all.
I believe that in most European countries, compared to Switzerland, the general population has not yet dealt with crypto and blockchain. If we just randomly select 10 people on the streets of Berlin and ask them about blockchain, ICOs and cryptocurrencies, we’d find that they are not very familiar with the topic. Adoption of new technologies requires more education.
CT: Switzerland has plans to launch its own state cryptocurrency. Do you think this is a good idea?
DD: Correction: that has not yet been decided. We have a very decentralized and democratic governance in Switzerland, and all new ideas will be welcomed and discussed.
Right now, we are discussing whether we want a national cryptocurrency — e-franc or crypto-franc — in Parliament. There are also different people from the crypto community who deal with this matter and give us [the] first ideas — and we discuss it all together. I think that's very good about Switzerland.
I don't think that's a bad idea. When I’m travelling, I’m using local currency in other countries. In some cities, I’m using Bitcoin and other cryptocurrencies. Why, then, shouldn't I use a cryptocurrency, perhaps issued by the Swiss government, which is legally supported by the government and the Swiss National Bank?
CT: And what are your thoughts on the new FINMA ICO regulations? Do they actually provide more clarity?
DD: Yes, absolutely. The government, investors and even entrepreneurs who want to launch ICOs in our country need some regulatory certainty.
Nobody wants to invest money in an ICO, lose it all after six months, and the court not knowing how to deal with scams like these under existing laws.
A healthy regulation is necessary, and Swiss investors consider these FINMA rules to be very important. This is different in Asia — some countries do not want to work with ICOs, so they simply ban them.
About three things that blockchain needs
CT: You mentioned that Swiss media reports are positive when it comes to blockchain and cryptocurrencies. In your opinion, do people tend to overestimate their knowledge of the opportunities and risks of cryptocurrencies as an investment due to intensive reporting?
DD: Yes, I think so. First of all, you need quality journalism and very good journalists who go in-depth and who do not randomly throw in superficial topics. Secondly, there is also a need for good, reasonable regulation that offers certain protective measures and educates people about the risks. You shouldn’t just say that this and that is bad and speculative, but also give advice on how to invest in which currencies [and] in the best way possible. And lastly, there is a need for a lot more information and education: children should have to learn what blockchain is and about its advantages and disadvantages at school.
There is a lack of educational opportunities for adults and there are only few people who can really teach this topic. I believe there is a great challenge ahead of us, and all teachers have to think of good ways to explain what blockchain and cryptocurrencies are and how to deal with them reasonably.