1 00:00:04,019 --> 00:00:06,480 Sean: Welcome to the Fear and Greed daily interview. I'm Sean 2 00:00:06,510 --> 00:00:11,730 Sean: Aylmer. 2022 has been a wild year for cryptocurrencies, defined 3 00:00:11,730 --> 00:00:15,210 Sean: by volatility in the value of digital tokens, and the multi- 4 00:00:15,210 --> 00:00:19,349 Sean: billion dollar collapse of trading platform FTX. But behind the 5 00:00:19,350 --> 00:00:21,630 Sean: scenes, a lot of work's being done to ensure there's 6 00:00:21,630 --> 00:00:25,350 Sean: a future for digital assets in Australia. Recently in Parliament 7 00:00:25,350 --> 00:00:28,560 Sean: House in Canberra, the Tech Council of Australia launched a 8 00:00:28,560 --> 00:00:31,620 Sean: new report on this very subject, declaring that the transition 9 00:00:31,620 --> 00:00:34,920 Sean: to a digital assets based economy should be underpinned by 10 00:00:34,920 --> 00:00:39,720 Sean: smart regulation. The sponsors of the report include Afterpay, Finder, 11 00:00:39,930 --> 00:00:43,620 Sean: and payments platform Zepto. Chris Jewell is the CEO of 12 00:00:43,620 --> 00:00:45,420 Sean: Zepto. Chris, welcome to Fear and Greed. 13 00:00:45,900 --> 00:00:47,370 Chris: Thank you, Sean. Great to be here. 14 00:00:48,060 --> 00:00:49,650 Sean: Now, I do want to talk about the report and 15 00:00:49,650 --> 00:00:53,640 Sean: what regulation is needed for digital assets in Australia, but 16 00:00:53,640 --> 00:00:57,090 Sean: first, tell me a bit about Zepto, what you do, 17 00:00:57,300 --> 00:00:58,890 Sean: why you have an interest in this area. 18 00:00:59,490 --> 00:01:03,900 Chris: Yeah, absolutely. To understand Zepto, we're merchants at heart. So 19 00:01:04,110 --> 00:01:08,280 Chris: Zepto formed out of skydiving company, where I think my co- 20 00:01:08,280 --> 00:01:12,300 Chris: founders were the largest tandem skydiving operation in the world, 21 00:01:12,300 --> 00:01:14,490 Chris: where you could take a booking at any point of 22 00:01:14,490 --> 00:01:17,009 Chris: the day, 24/ 7, but the cash flow for that 23 00:01:17,010 --> 00:01:20,520 Chris: business just took time to come in. So on the 24 00:01:20,520 --> 00:01:22,920 Chris: back of that, we started to explore what it looked 25 00:01:22,920 --> 00:01:27,300 Chris: like to innovate over payments, in particular bank account to 26 00:01:27,300 --> 00:01:30,540 Chris: bank account payments, which are pretty effective and efficient in 27 00:01:30,540 --> 00:01:33,900 Chris: terms of pricing, and built from there. So we really 28 00:01:34,170 --> 00:01:36,990 Chris: started with direct entry, and then obviously in Australia we 29 00:01:36,990 --> 00:01:40,560 Chris: got NPP, and beyond that it started to evolve. And 30 00:01:40,920 --> 00:01:44,580 Chris: we're now really focused on new payment possibilities, and in 31 00:01:44,580 --> 00:01:47,550 Chris: part, as you just said, digital assets that will play a 32 00:01:47,550 --> 00:01:48,270 Chris: big part in that. 33 00:01:48,930 --> 00:01:51,480 Sean: Okay. So, quite a bit in what you just said 34 00:01:51,480 --> 00:01:56,550 Sean: there. So skydiving, to begin with, to payments. I'm not 35 00:01:56,550 --> 00:01:58,860 Sean: sure whether that's like a sexy transition or not, but 36 00:01:58,860 --> 00:02:03,600 Sean: we'll go with it. In really common parlance, what sort 37 00:02:03,600 --> 00:02:06,660 Sean: of things are you talking about, making people's lives easier? 38 00:02:07,770 --> 00:02:08,341 Sean: What is it that you're talking about? 39 00:02:08,341 --> 00:02:15,330 Chris: I think for us, we don't face consumers, so we power businesses. And what we aim 40 00:02:15,330 --> 00:02:18,690 Chris: to do is help those businesses differentiate their product or 41 00:02:18,690 --> 00:02:22,200 Chris: their service through payment innovation. So what we can do, 42 00:02:22,200 --> 00:02:24,960 Chris: we can make payments at scale, where you can have 43 00:02:24,960 --> 00:02:28,350 Chris: complex payment experiences, where a merchant might be paying out 44 00:02:28,350 --> 00:02:31,770 Chris: to a gig economy worker through earned wage access or 45 00:02:31,770 --> 00:02:35,220 Chris: refunds off a e- commerce platform. It's complicated. We make 46 00:02:35,220 --> 00:02:39,480 Chris: that seamless and simple at scale. We can work with 47 00:02:39,480 --> 00:02:42,870 Chris: receivables, where a consumer or business needs to pay our 48 00:02:42,870 --> 00:02:45,240 Chris: customer that's a business in real time. So we can 49 00:02:45,750 --> 00:02:49,440 Chris: receive those payments, reconcile them, settle them, and then have 50 00:02:49,440 --> 00:02:52,169 Chris: the merchant reflect that in a browser in real time. 51 00:02:53,400 --> 00:02:55,560 Chris: This is all between two bank accounts. And now we 52 00:02:55,560 --> 00:02:59,160 Chris: can, with PayTo, which is a new payment mechanic coming through 53 00:02:59,160 --> 00:03:01,410 Chris: the New Payments Platform, or the NPP, we can help 54 00:03:01,410 --> 00:03:05,940 Chris: those businesses collect payments in real time. So we process 55 00:03:06,780 --> 00:03:10,590 Chris: just over five million transactions a month for large companies, 56 00:03:10,650 --> 00:03:13,080 Chris: all the way through to cab companies that are looking 57 00:03:13,080 --> 00:03:15,480 Chris: to pay their drivers at the end of shift. So 58 00:03:15,660 --> 00:03:18,870 Chris: we're quite broad in terms of the application, but what's 59 00:03:18,870 --> 00:03:22,440 Chris: really important to understand is that we bring that technical 60 00:03:22,620 --> 00:03:25,679 Chris: capability that a lot of these merchants don't find traditionally 61 00:03:25,680 --> 00:03:29,430 Chris: from their banking partnerships that are more on lending and deposits. 62 00:03:29,430 --> 00:03:34,560 Chris: We bring that technical capability that really takes payment experiences 63 00:03:34,560 --> 00:03:35,310 Chris: to the next level. 64 00:03:36,090 --> 00:03:39,270 Sean: Okay. So the report into digital assets, it was launched 65 00:03:39,270 --> 00:03:43,290 Sean: by financial services minister Stephen Jones. Firstly, what does digital 66 00:03:43,290 --> 00:03:46,050 Sean: assets cover? I mean, it's more than cryptocurrencies. 67 00:03:46,440 --> 00:03:50,370 Chris: Yeah, absolutely. Even just putting aside the asset class, the 68 00:03:50,370 --> 00:03:54,360 Chris: technology itself goes much deeper, and that's where we've come 69 00:03:54,450 --> 00:03:57,930 Chris: in. Our vision is simply just a better way to 70 00:03:57,930 --> 00:04:00,450 Chris: pay. A better way to pay for businesses and consumers. 71 00:04:00,450 --> 00:04:04,800 Chris: But ultimately why we're so passionate about digital assets is the 72 00:04:04,800 --> 00:04:07,620 Chris: ability to transfer all value. So if you're a merchant 73 00:04:07,620 --> 00:04:09,960 Chris: or a consumer, in a future state, you should be 74 00:04:09,960 --> 00:04:13,290 Chris: able to transfer and engage on wherever you store value. 75 00:04:13,560 --> 00:04:16,110 Chris: And so for us, it's about working with the technology 76 00:04:16,110 --> 00:04:19,050 Chris: and the infrastructure that supports digital assets. So it's not 77 00:04:19,290 --> 00:04:23,580 Chris: about (inaudible) coin or Dogecoin, it is really about 78 00:04:23,580 --> 00:04:27,660 Chris: the protocols that support a digital asset infrastructure that help 79 00:04:27,660 --> 00:04:32,400 Chris: enable transfer of value in a secure, seamless fashion. 80 00:04:32,850 --> 00:04:36,180 Sean: Okay. So on that basis, I can understand the need 81 00:04:36,450 --> 00:04:39,690 Sean: for regulation, because you want a fair market where one 82 00:04:39,690 --> 00:04:42,029 Sean: side thinks there's value and another side thinks there's value, 83 00:04:42,300 --> 00:04:45,720 Sean: and there's a way to transact that digitally. And you 84 00:04:45,720 --> 00:04:47,190 Sean: really do need governance around that. 85 00:04:48,630 --> 00:04:51,299 Chris: 100%. I think if we don't have trust in the 86 00:04:51,300 --> 00:04:55,140 Chris: framework, then everything falls away. And we've got a philosophy 87 00:04:55,140 --> 00:04:58,110 Chris: at Zepto where we're meeting merchants where they're at today. 88 00:04:58,110 --> 00:05:01,529 Chris: So right now, merchants and consumers feel comfortable and confident 89 00:05:01,529 --> 00:05:05,460 Chris: transacting on bank account transfers, not on shooting crypto to 90 00:05:05,460 --> 00:05:08,820 Chris: each other. But equally, we're committed to creating these new 91 00:05:08,820 --> 00:05:13,020 Chris: payment possibilities where that trust framework is absolutely core and 92 00:05:13,020 --> 00:05:15,960 Chris: key. And I think when you look deeper into the 93 00:05:15,960 --> 00:05:19,500 Chris: digital asset space, you've got decentralized finance where the principles 94 00:05:19,500 --> 00:05:23,400 Chris: of that is self custody, but equally transparency around cost, 95 00:05:23,670 --> 00:05:26,880 Chris: where your funds are, what are the conditions in which 96 00:05:26,910 --> 00:05:31,560 Chris: transfers happen. And it's all very... It is new, but 97 00:05:31,560 --> 00:05:34,859 Chris: at the same time it can unlock incredible value for 98 00:05:34,860 --> 00:05:38,490 Chris: businesses and consumers over the long term. But 100%, and this is where 99 00:05:38,490 --> 00:05:41,190 Chris: we worked really closely with the government and the Tech 100 00:05:41,190 --> 00:05:44,820 Chris: Council of Australia, is around getting behind an alignment of 101 00:05:44,820 --> 00:05:48,630 Chris: what we need in terms of a responsible regulatory framework 102 00:05:48,810 --> 00:05:52,200 Chris: to drive trust, so that ultimately we can unlock value 103 00:05:52,200 --> 00:05:54,030 Chris: back for businesses and consumers. 104 00:05:54,390 --> 00:05:56,039 Sean: Stay with me, Chris. We'll be back in a minute. 105 00:06:02,490 --> 00:06:07,140 Sean: My guest today is Chris Jewell, CEO of Zepto. So 106 00:06:07,140 --> 00:06:08,970 Sean: when you were talking there, it just took me back 107 00:06:08,970 --> 00:06:12,750 Sean: to... Hundreds of years ago, there were barter systems. So 108 00:06:12,750 --> 00:06:14,850 Sean: it wasn't about cash, or it wasn't about money, it 109 00:06:14,850 --> 00:06:18,390 Sean: was just actually about the rules in which those assets 110 00:06:18,660 --> 00:06:20,940 Sean: were traded. And that's really what matters. And it's not 111 00:06:20,940 --> 00:06:25,109 Sean: actually that much different here, in that you're not so 112 00:06:25,110 --> 00:06:26,820 Sean: worried about the assets, so long as there's a market 113 00:06:26,820 --> 00:06:28,290 Sean: for it and there are proper rules around it. 114 00:06:28,680 --> 00:06:31,320 Chris: Exactly. And if you think about the application of some of 115 00:06:31,320 --> 00:06:34,529 Chris: these digital assets, right now it's hard, because quite often 116 00:06:34,529 --> 00:06:37,200 Chris: I say our awareness of what is possible is anchored 117 00:06:37,200 --> 00:06:39,001 Chris: to what has been possible, like you just said (inaudible) 118 00:06:39,001 --> 00:06:43,320 Chris: . But what we're creating is new possibilities. So you 119 00:06:43,320 --> 00:06:46,080 Chris: think about cross- border transactions at the moment, maybe using 120 00:06:46,080 --> 00:06:50,640 Chris: stablecoins, which are pegged to an underlying fiat. That's great, 121 00:06:50,640 --> 00:06:53,549 Chris: but you've still got the regulation around who's transferring cross- 122 00:06:53,550 --> 00:06:56,820 Chris: border, what are the regulations that follow those transactions, to 123 00:06:57,300 --> 00:07:01,200 Chris: ensure that bad actors are not enabled through that technology. 124 00:07:01,440 --> 00:07:04,200 Chris: But you've also got central bank digital currencies emerging that 125 00:07:04,200 --> 00:07:08,280 Chris: are programmable. And our headquarters based in Byron Bay, and 126 00:07:08,520 --> 00:07:10,830 Chris: Lismore recently had the big floods up there, and I 127 00:07:10,830 --> 00:07:13,560 Chris: was talking to someone just the other day about, imagine 128 00:07:13,770 --> 00:07:16,290 Chris: we had a CBDC that could be put by the 129 00:07:16,290 --> 00:07:20,640 Chris: central bank, could stimulate our postcode. So you could send 130 00:07:20,640 --> 00:07:24,150 Chris: out a CBDC to people who live in that area or 131 00:07:24,150 --> 00:07:27,180 Chris: more broadly, that can only be used at businesses within 132 00:07:27,180 --> 00:07:31,050 Chris: a postcode to help stimulate and support that regional economy. 133 00:07:31,260 --> 00:07:34,260 Chris: Or maybe, to your point around the bartering, maybe it's 134 00:07:34,440 --> 00:07:37,860 Chris: smart contracts that help on supply chain. So right now, 135 00:07:38,010 --> 00:07:39,810 Chris: I guess they're the ones that we see right in 136 00:07:39,810 --> 00:07:42,119 Chris: front of us. But there's equally a commitment in the 137 00:07:42,120 --> 00:07:45,480 Chris: community around digital assets that go well beyond use cases 138 00:07:45,480 --> 00:07:48,690 Chris: that we see today, to really creating new possibilities that 139 00:07:48,690 --> 00:07:52,200 Chris: unlock value in the future that we can't even start 140 00:07:52,200 --> 00:07:56,790 Chris: to think about today. But this infrastructure, digital asset regulated 141 00:07:56,880 --> 00:08:01,260 Chris: infrastructure, combined with... We're super passionate about open banking and 142 00:08:01,260 --> 00:08:03,930 Chris: the consumer data right and the NPP and real time 143 00:08:03,930 --> 00:08:09,990 Chris: payments. Those core infrastructure components together really deliver an outstanding, 144 00:08:10,080 --> 00:08:14,730 Chris: innovative environment for emerging technology companies in Australia to dominate 145 00:08:15,000 --> 00:08:15,930 Chris: on a global stage. 146 00:08:16,380 --> 00:08:19,650 Sean: It's very hard though for regulators to keep up. Many, 147 00:08:19,650 --> 00:08:21,989 Sean: many years ago I worked at the Reserve Bank in 148 00:08:22,470 --> 00:08:25,920 Sean: an area which is now known as APRA, the Australian Prudential Regulation Authority, and 149 00:08:25,920 --> 00:08:30,060 Sean: I remember back then securitization was in its infancy. And 150 00:08:30,120 --> 00:08:32,400 Sean: the regulator, which was the Reserve Bank at the time, 151 00:08:32,400 --> 00:08:35,580 Sean: was really struggling to catch up with what Macquarie Group 152 00:08:35,580 --> 00:08:38,700 Sean: was doing, or Macquarie Bank back then was doing. What 153 00:08:38,700 --> 00:08:41,460 Sean: you're talking about, I kind of see the theory of 154 00:08:41,460 --> 00:08:44,670 Sean: it, but it must be hard for regulators to even 155 00:08:44,790 --> 00:08:46,679 Sean: have the vision to see it. 156 00:08:47,340 --> 00:08:50,309 Chris: Yeah. Exactly. And one of the things I think we need 157 00:08:50,309 --> 00:08:53,610 Chris: to as a tech community is embrace that and align 158 00:08:53,610 --> 00:08:57,000 Chris: with the regulators. We're not here to fight regulation. We 159 00:08:57,000 --> 00:09:02,309 Chris: need it. We need to (inaudible) shape it. And I think for us, we don't 160 00:09:02,309 --> 00:09:04,829 Chris: need to over- regulate, we've got some really strong governance 161 00:09:04,830 --> 00:09:08,490 Chris: protocols within real time payments as it exists today. We're 162 00:09:08,490 --> 00:09:11,490 Chris: building out a consumer data right framework with regulation to 163 00:09:11,490 --> 00:09:15,090 Chris: support open banking. And to an extent what's happening in 164 00:09:15,090 --> 00:09:18,030 Chris: digital assets, we absolutely need to bring the trust. We 165 00:09:18,030 --> 00:09:22,530 Chris: need custody, we need regulation at certain areas. But collectively 166 00:09:22,620 --> 00:09:25,020 Chris: we don't need to over- regulate areas that have already 167 00:09:25,020 --> 00:09:28,470 Chris: been regulated, so we can complement these different regulators coming 168 00:09:28,470 --> 00:09:32,490 Chris: together. And I think that's the challenge in itself. The 169 00:09:32,490 --> 00:09:35,490 Chris: regulators understand the boundaries and where they can rely on 170 00:09:35,490 --> 00:09:39,000 Chris: other regulatory bodies, rather than having to recreate the wheel 171 00:09:39,000 --> 00:09:41,370 Chris: themselves. And that's where I think the tech community really 172 00:09:41,370 --> 00:09:45,179 Chris: needs to engage, to support the regulators with the right 173 00:09:45,179 --> 00:09:48,720 Chris: outcomes, because we're all aligned to ultimately wanting to do 174 00:09:48,720 --> 00:09:52,380 Chris: the right thing to unlock that value back for our community. 175 00:09:53,460 --> 00:09:59,429 Sean: How close are we to getting to a framework that allows that 176 00:09:59,429 --> 00:10:02,250 Sean: to happen? I'm sure things like FTX and that can't 177 00:10:02,520 --> 00:10:06,150 Sean: help, and certainly it doesn't help in the court of 178 00:10:06,150 --> 00:10:09,989 Sean: public opinion. Regulators I'm sure would be more across it, 179 00:10:09,990 --> 00:10:13,830 Sean: but how close are we to getting a regulatory system 180 00:10:13,830 --> 00:10:15,120 Sean: that works for you? 181 00:10:16,080 --> 00:10:19,140 Chris: I think, again, it's not going to happen overnight. I 182 00:10:19,140 --> 00:10:21,599 Chris: see it as an evolution. I think to be able 183 00:10:21,600 --> 00:10:26,340 Chris: to regulate and fight another FTX happening, that should be pretty 184 00:10:26,340 --> 00:10:29,939 Chris: straightforward in terms of regulation around custody, et cetera, et 185 00:10:29,940 --> 00:10:32,880 Chris: cetera. But as we go deeper into it, it's just 186 00:10:32,880 --> 00:10:34,590 Chris: going to take time. And I think that's where we really need 187 00:10:35,280 --> 00:10:37,620 Chris: to lean into what those use cases that are emerging 188 00:10:37,620 --> 00:10:40,350 Chris: are, and have really active voices in doing that. So 189 00:10:40,740 --> 00:10:42,840 Chris: you're right, it's not going to be overnight, it will 190 00:10:42,840 --> 00:10:45,240 Chris: take time. But that's where the commitment... And we're seeing 191 00:10:45,240 --> 00:10:47,880 Chris: that already with the central bank at the moment. They've 192 00:10:47,880 --> 00:10:51,090 Chris: put out this pilot around central bank digital currencies, to 193 00:10:51,090 --> 00:10:54,059 Chris: really understand... Want to work with the market to say, " 194 00:10:54,059 --> 00:10:59,160 Chris: We'll make an environment available to use cases that are submitted, 195 00:10:59,160 --> 00:11:02,610 Chris: and we'll work with those merchants and a platform, a 196 00:11:02,610 --> 00:11:07,080 Chris: digital asset provider, plus the regulators, to observe and see 197 00:11:07,440 --> 00:11:09,839 Chris: what comes of it, so that we can refine and 198 00:11:09,840 --> 00:11:12,630 Chris: ensure we've got the proper structure going forward." But all 199 00:11:12,630 --> 00:11:15,600 Chris: of this will take years, not months. 200 00:11:16,200 --> 00:11:18,000 Sean: I always find when I talk to someone about this 201 00:11:18,000 --> 00:11:20,339 Sean: stuff, it's really hard to understand. And I'm not a 202 00:11:20,340 --> 00:11:23,610 Sean: visionary by any stretch, so there's concepts here which I'm 203 00:11:23,610 --> 00:11:26,100 Sean: trying to get my head around. But incredibly exciting, because 204 00:11:26,100 --> 00:11:29,100 Sean: it does actually make a more, maybe not a frictionless, 205 00:11:29,100 --> 00:11:34,050 Sean: but a far less friction payments system, which should make 206 00:11:34,050 --> 00:11:39,090 Sean: transactions, whether that's with my local supplier or someone overseas, 207 00:11:39,150 --> 00:11:40,740 Sean: a lot easier and cheaper. 208 00:11:42,150 --> 00:11:45,449 Chris: Exactly. And I like to think I am a bit 209 00:11:45,450 --> 00:11:47,040 Chris: of a visionary, but at the same time, I think it's 210 00:11:47,040 --> 00:11:50,220 Chris: more of a pioneer. I cannot help but feel so 211 00:11:50,580 --> 00:11:54,630 Chris: overwhelmingly excited when you look forward, thinking about what we 212 00:11:54,630 --> 00:11:58,260 Chris: can create, what we can do, that ultimately unlocks what 213 00:11:58,260 --> 00:12:01,740 Chris: you just said, value back for businesses and consumers in 214 00:12:01,740 --> 00:12:06,270 Chris: this country, that otherwise is stuck in traditional payment channels 215 00:12:06,270 --> 00:12:10,470 Chris: or traditional ways of doing business that need to evolve. Exactly. 216 00:12:11,190 --> 00:12:12,900 Sean: Chris, thank you for talking to Fear and Greed. 217 00:12:13,290 --> 00:12:14,280 Chris: Sean, it's been a pleasure. 218 00:12:14,940 --> 00:12:17,760 Sean: That was Chris Jewell, CEO of Zepto. This is the 219 00:12:17,760 --> 00:12:19,980 Sean: Fear and Greed daily interview. Join us every morning for 220 00:12:19,980 --> 00:12:22,740 Sean: the full episode of Fear and Greed, Australia's most popular 221 00:12:22,740 --> 00:12:25,590 Sean: business podcast. I'm Sean Aylmer. Enjoy your day.