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Next gen. Digital Bank

Andy Martin 79 articles Follow
Blockchain is really a governance technology
April 13, 2023
What does the next gen. digital bank look like? The data
driven or digital economy to come of AI/ML/IoT is orders of
magnitude bigger than the economic impact of the internet
so far. We must create a digital version of today's
commercial banks. After all 80% of money today was
created by commercial banks through credit creation by
lending. Source Bank of England.
The data or digital economy requires a new type of digital

bank and a new type of governance for the data fuel to
drive next gen. AI/ML/IoT apps.
Data plus ownership plus incentives based on

permission to buy and sell data to drive next
gen. AI/ML apps gives us web3 as the internet
of ownership
Data economy
The economy of buying and selling access to data is

expanded by writing DeFi smart contracts that we can call
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13/04/2023, 17:17 (7) Next gen. Digital Bank | LinkedIn
Autonomous Economic Agents (AEAs) to leverage the value

of that data across many AI/ML apps at scale by creating
new digital money by growing the GDP of the data or
digital economy.
The Data Economy
The role of a digital bank is this new economy is to
1. Provide risk capital to drive liquidity and credit creation

in AEAs
2. Provide skill in writing AEA’s
3. Provide oversight to the governance of stable coins used

for value exchange in AEA’s
Digital money Governance
Public money CBDC, at the wholesale level, can be used in

the reserve funds by next gen digital banks to provide
overnight to private money stable coins money creation.
Next Gen Digital Bank
Here the value token is a stable coin. It's volatility to fiat is

controlled by a reserve fund that uses wholesale CBDC. This
token can be staked by those looking to their capital to
work. This staking is used in AEAs (smart contracts) to
Provide liquidity
Provide finance
Payments in exchange
The risk and reward is taken by a combination of the staker

(which can be the bank) and the community as a whole as
the fee level (or interest rate) and the exchange rate back to
fiat is defined by the economic value created or lost by the
community or DAO.
The data or digital economy will be driven by

private digital money just as the economy
today is driven by commercial bank money.
This will restrict the use of retail CBDC to edge
use cases (e.g., winter fuel allowances) and will
stop the Chinese style surveillance economy.
The Data Itself
The data itself to drive this new digital economy is never

shared as we employ ZKPs to protect the nuance and
context of the data and only the learnings or analytics
derived by the ML is shared. The value is always in the
nuance and context.
For me the key issue is what data is publicly available? Why

would anyone post valuable data to the internet if it could
be reused at scale by AI/ML without attribution or payment.
Obviously this can also happen today but we choose to
trust the human to at least give attribution to their source
and we know this probably won’t happen at any scale. So
the problem with AI is economic and social. I think that this
problem can be fixed with the internet of ownership or
web3.
Objection handling
I would argue that this is really no different that what we

have today other than this is totally digital. You might say
"how do we regulate DeFi?" I would answer that the DAO is
governed by token holders and there is no reason that
certain decisions can't be limited to a class of token holders
which might be the bank and regulators etc. This might
determine that only smart contracts that are written and

audited by regulated entities can be used.
Really what we ate doing is creating private commercial

bank digital money just as today but it is born purely
digital. I don't buy the argument that this is the Wild West
forever - I think it is just the digital economy to drive AI.
In fact I am writing a book about this that is about the

economics of web3 called "web3 for the enterprise, new
business model for the internet."
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Published by
Andy Martin 79 articles Follow
Published • 9h
The data or digital economy will be driven by private digital money created by next
Gen. Digital Banks, just as the economy today is driven by commercial bank money.
This will restrict the use of retail CBDC to edge use cases (e.g., winter fuel allowances)
and will stop the Chinese style surveillance economy. #blockchainthoughtfortheday
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Andy Martin • 3rd+ 7h

Objection handling
I would argue that this is really no different that what we have today other
than this is totally digital. You might say "how do we regulate DeFi?" I
would answer that the DAO is governed by token holders and there is no
reason that certain decisions can't be limited to a class of token holders
…see more
Like · 1 Reply
Gurinder Dua • 3rd+ 4h

Blockchain and Crypto Advocate
Tldr
1. CBDC doesn't necessarily imply surveillance
2. Digital money accrued through private enterprise could see emergence

of a newer crypto based digital bank which could also be fractional
…seein more
Like · 1 Reply
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13/04/2023, 17:17 (7) Next gen.

Digital Bank | LinkedIn

The Token Economy

Next gen. Digital Bank

April 13, 2023

The data or digital economy requires a new type of digital

Data plus ownership plus incentives based on

The economy of buying and selling access to data is

Autonomous Economic Agents (AEAs) to leverage the value

The Data Economy

The role of a digital bank is this new economy is to

1. Provide risk capital to drive liquidity and credit creation

2. Provide skill in writing AEA’s

3. Provide oversight to the governance of stable coins used

Digital money Governance

Public money CBDC, at the wholesale level, can be used in

Next Gen Digital Bank

Here the value token is a stable coin. It's volatility to fiat is

The risk and reward is taken by a combination of the staker

The data or digital economy will be driven by

The Data Itself

The data itself to drive this new digital economy is never

For me the key issue is what data is publicly available? Why

I would argue that this is really no different that what we

determine that only smart contracts that are written and

Really what we ate doing is creating private commercial

In fact I am writing a book about this that is about the

Like Comment Share 50 5 comments

Andy Martin • 3rd+ 7h

Gurinder Dua • 3rd+ 4h

2. Digital money accrued through private enterprise could see emergence

The Token Economy

More from this newsletter

Blockchain and ESG The Digital Citizen

Andy Martin on LinkedIn Andy Martin on LinkedIn

Digital Money is a Big Deal

Andy Martin on LinkedIn

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