Welcome to the Fear and Greed daily interview. I'm Sean Aylmer. 2022 has been a wild year for cryptocurrencies, defined by volatility in the value of digital tokens, and the multi- billion dollar collapse of trading platform FTX. But behind the scenes, a lot of work's being done to ensure there's a future for digital assets in Australia. Recently in Parliament House in Canberra, the Tech Council of Australia launched a new report on this very subject, declaring that the transition to a digital assets based economy should be underpinned by smart regulation. The sponsors of the report include Afterpay, Finder, and payments platform Zepto. Chris Jewell is the CEO of Zepto. Chris, welcome to Fear and Greed.

Welcome to the Fear and Greed daily interview. I'm Sean Aylmer. 2022 has been a wild year for cryptocurrencies, defined by volatility in the value of digital tokens, and the multi- billion dollar collapse of trading platform FTX. But behind the scenes, a lot of work's being done to ensure there's a future for digital assets in Australia. Recently in Parliament House in Canberra, the Tech Council of Australia launched a new report on this very subject, declaring that the transition to a digital assets based economy should be underpinned by smart regulation. The sponsors of the report include Afterpay, Finder, and payments platform Zepto. Chris Jewell is the CEO of Zepto. Chris, welcome to Fear and Greed.

Thank you, Sean. Great to be here.

Thank you, Sean. Great to be here.

Now, I do want to talk about the report and what regulation is needed for digital assets in Australia, but first, tell me a bit about Zepto, what you do, why you have an interest in this area.

Now, I do want to talk about the report and what regulation is needed for digital assets in Australia, but first, tell me a bit about Zepto, what you do, why you have an interest in this area.

Yeah, absolutely. To understand Zepto, we're merchants at heart. So Zepto formed out of skydiving company, where I think my co- founders were the largest tandem skydiving operation in the world, where you could take a booking at any point of the day, 24/ 7, but the cash flow for that business just took time to come in. So on the back of that, we started to explore what it looked like to innovate over payments, in particular bank account to bank account payments, which are pretty effective and efficient in terms of pricing, and built from there. So we really started with direct entry, and then obviously in Australia we got NPP, and beyond that it started to evolve. And we're now really focused on new payment possibilities, and in part, as you just said, digital assets that will play a big part in that.

Yeah, absolutely. To understand Zepto, we're merchants at heart. So Zepto formed out of skydiving company, where I think my co- founders were the largest tandem skydiving operation in the world, where you could take a booking at any point of the day, 24/ 7, but the cash flow for that business just took time to come in. So on the back of that, we started to explore what it looked like to innovate over payments, in particular bank account to bank account payments, which are pretty effective and efficient in terms of pricing, and built from there. So we really started with direct entry, and then obviously in Australia we got NPP, and beyond that it started to evolve. And we're now really focused on new payment possibilities, and in part, as you just said, digital assets that will play a big part in that.

Okay. So, quite a bit in what you just said there. So skydiving, to begin with, to payments. I'm not sure whether that's like a sexy transition or not, but we'll go with it. In really common parlance, what sort of things are you talking about, making people's lives easier? What is it that you're talking about?

Okay. So, quite a bit in what you just said there. So skydiving, to begin with, to payments. I'm not sure whether that's like a sexy transition or not, but we'll go with it. In really common parlance, what sort of things are you talking about, making people's lives easier? What is it that you're talking about?

I think for us, we don't face consumers, so we power businesses. And what we aim to do is help those businesses differentiate their product or their service through payment innovation. So what we can do, we can make payments at scale, where you can have complex payment experiences, where a merchant might be paying out to a gig economy worker through earned wage access or refunds off a e- commerce platform. It's complicated. We make that seamless and simple at scale. We can work with receivables, where a consumer or business needs to pay our customer that's a business in real time. So we can receive those payments, reconcile them, settle them, and then have the merchant reflect that in a browser in real time. This is all between two bank accounts. And now we can, with PayTo, which is a new payment mechanic coming through the New Payments Platform, or the NPP, we can help those businesses collect payments in real time. So we process just over five million transactions a month for large companies, all the way through to cab companies that are looking to pay their drivers at the end of shift. So we're quite broad in terms of the application, but what's really important to understand is that we bring that technical capability that a lot of these merchants don't find traditionally from their banking partnerships that are more on lending and deposits. We bring that technical capability that really takes payment experiences to the next level.

I think for us, we don't face consumers, so we power businesses. And what we aim to do is help those businesses differentiate their product or their service through payment innovation. So what we can do, we can make payments at scale, where you can have complex payment experiences, where a merchant might be paying out to a gig economy worker through earned wage access or refunds off a e- commerce platform. It's complicated. We make that seamless and simple at scale. We can work with receivables, where a consumer or business needs to pay our customer that's a business in real time. So we can receive those payments, reconcile them, settle them, and then have the merchant reflect that in a browser in real time. This is all between two bank accounts. And now we can, with PayTo, which is a new payment mechanic coming through the New Payments Platform, or the NPP, we can help those businesses collect payments in real time. So we process just over five million transactions a month for large companies, all the way through to cab companies that are looking to pay their drivers at the end of shift. So we're quite broad in terms of the application, but what's really important to understand is that we bring that technical capability that a lot of these merchants don't find traditionally from their banking partnerships that are more on lending and deposits. We bring that technical capability that really takes payment experiences to the next level.

Okay. So the report into digital assets, it was launched by financial services minister Stephen Jones. Firstly, what does digital assets cover? I mean, it's more than cryptocurrencies.

Okay. So the report into digital assets, it was launched by financial services minister Stephen Jones. Firstly, what does digital assets cover? I mean, it's more than cryptocurrencies.

Yeah, absolutely. Even just putting aside the asset class, the technology itself goes much deeper, and that's where we've come in. Our vision is simply just a better way to pay. A better way to pay for businesses and consumers. But ultimately why we're so passionate about digital assets is the ability to transfer all value. So if you're a merchant or a consumer, in a future state, you should be able to transfer and engage on wherever you store value. And so for us, it's about working with the technology and the infrastructure that supports digital assets. So it's not about (inaudible) coin or Dogecoin, it is really about the protocols that support a digital asset infrastructure that help enable transfer of value in a secure, seamless fashion.

Yeah, absolutely. Even just putting aside the asset class, the technology itself goes much deeper, and that's where we've come in. Our vision is simply just a better way to pay. A better way to pay for businesses and consumers. But ultimately why we're so passionate about digital assets is the ability to transfer all value. So if you're a merchant or a consumer, in a future state, you should be able to transfer and engage on wherever you store value. And so for us, it's about working with the technology and the infrastructure that supports digital assets. So it's not about (inaudible) coin or Dogecoin, it is really about the protocols that support a digital asset infrastructure that help enable transfer of value in a secure, seamless fashion.

Okay. So on that basis, I can understand the need for regulation, because you want a fair market where one side thinks there's value and another side thinks there's value, and there's a way to transact that digitally. And you really do need governance around that.

Okay. So on that basis, I can understand the need for regulation, because you want a fair market where one side thinks there's value and another side thinks there's value, and there's a way to transact that digitally. And you really do need governance around that.

100%. I think if we don't have trust in the framework, then everything falls away. And we've got a philosophy at Zepto where we're meeting merchants where they're at today. So right now, merchants and consumers feel comfortable and confident transacting on bank account transfers, not on shooting crypto to each other. But equally, we're committed to creating these new payment possibilities where that trust framework is absolutely core and key. And I think when you look deeper into the digital asset space, you've got decentralized finance where the principles of that is self custody, but equally transparency around cost, where your funds are, what are the conditions in which transfers happen. And it's all very... It is new, but at the same time it can unlock incredible value for businesses and consumers over the long term. But 100%, and this is where we worked really closely with the government and the Tech Council of Australia, is around getting behind an alignment of what we need in terms of a responsible regulatory framework to drive trust, so that ultimately we can unlock value back for businesses and consumers.

100%. I think if we don't have trust in the framework, then everything falls away. And we've got a philosophy at Zepto where we're meeting merchants where they're at today. So right now, merchants and consumers feel comfortable and confident transacting on bank account transfers, not on shooting crypto to each other. But equally, we're committed to creating these new payment possibilities where that trust framework is absolutely core and key. And I think when you look deeper into the digital asset space, you've got decentralized finance where the principles of that is self custody, but equally transparency around cost, where your funds are, what are the conditions in which transfers happen. And it's all very... It is new, but at the same time it can unlock incredible value for businesses and consumers over the long term. But 100%, and this is where we worked really closely with the government and the Tech Council of Australia, is around getting behind an alignment of what we need in terms of a responsible regulatory framework to drive trust, so that ultimately we can unlock value back for businesses and consumers.

Stay with me, Chris. We'll be back in a minute. My guest today is Chris Jewell, CEO of Zepto. So when you were talking there, it just took me back to... Hundreds of years ago, there were barter systems. So it wasn't about cash, or it wasn't about money, it was just actually about the rules in which those assets were traded. And that's really what matters. And it's not actually that much different here, in that you're not so worried about the assets, so long as there's a market for it and there are proper rules around it.

Stay with me, Chris. We'll be back in a minute. My guest today is Chris Jewell, CEO of Zepto. So when you were talking there, it just took me back to... Hundreds of years ago, there were barter systems. So it wasn't about cash, or it wasn't about money, it was just actually about the rules in which those assets were traded. And that's really what matters. And it's not actually that much different here, in that you're not so worried about the assets, so long as there's a market for it and there are proper rules around it.

Exactly. And if you think about the application of some of these digital assets, right now it's hard, because quite often I say our awareness of what is possible is anchored to what has been possible, like you just said (inaudible) . But what we're creating is new possibilities. So you think about cross- border transactions at the moment, maybe using stablecoins, which are pegged to an underlying fiat. That's great, but you've still got the regulation around who's transferring cross- border, what are the regulations that follow those transactions, to ensure that bad actors are not enabled through that technology. But you've also got central bank digital currencies emerging that are programmable. And our headquarters based in Byron Bay, and Lismore recently had the big floods up there, and I was talking to someone just the other day about, imagine we had a CBDC that could be put by the central bank, could stimulate our postcode. So you could send out a CBDC to people who live in that area or more broadly, that can only be used at businesses within a postcode to help stimulate and support that regional economy. Or maybe, to your point around the bartering, maybe it's smart contracts that help on supply chain. So right now, I guess they're the ones that we see right in front of us. But there's equally a commitment in the community around digital assets that go well beyond use cases that we see today, to really creating new possibilities that unlock value in the future that we can't even start to think about today. But this infrastructure, digital asset regulated infrastructure, combined with... We're super passionate about open banking and the consumer data right and the NPP and real time payments. Those core infrastructure components together really deliver an outstanding, innovative environment for emerging technology companies in Australia to dominate on a global stage.

Exactly. And if you think about the application of some of these digital assets, right now it's hard, because quite often I say our awareness of what is possible is anchored to what has been possible, like you just said (inaudible) . But what we're creating is new possibilities. So you think about cross- border transactions at the moment, maybe using stablecoins, which are pegged to an underlying fiat. That's great, but you've still got the regulation around who's transferring cross- border, what are the regulations that follow those transactions, to ensure that bad actors are not enabled through that technology. But you've also got central bank digital currencies emerging that are programmable. And our headquarters based in Byron Bay, and Lismore recently had the big floods up there, and I was talking to someone just the other day about, imagine we had a CBDC that could be put by the central bank, could stimulate our postcode. So you could send out a CBDC to people who live in that area or more broadly, that can only be used at businesses within a postcode to help stimulate and support that regional economy. Or maybe, to your point around the bartering, maybe it's smart contracts that help on supply chain. So right now, I guess they're the ones that we see right in front of us. But there's equally a commitment in the community around digital assets that go well beyond use cases that we see today, to really creating new possibilities that unlock value in the future that we can't even start to think about today. But this infrastructure, digital asset regulated infrastructure, combined with... We're super passionate about open banking and the consumer data right and the NPP and real time payments. Those core infrastructure components together really deliver an outstanding, innovative environment for emerging technology companies in Australia to dominate on a global stage.

It's very hard though for regulators to keep up. Many, many years ago I worked at the Reserve Bank in an area which is now known as APRA, the Australian Prudential Regulation Authority, and I remember back then securitization was in its infancy. And the regulator, which was the Reserve Bank at the time, was really struggling to catch up with what Macquarie Group was doing, or Macquarie Bank back then was doing. What you're talking about, I kind of see the theory of it, but it must be hard for regulators to even have the vision to see it.

It's very hard though for regulators to keep up. Many, many years ago I worked at the Reserve Bank in an area which is now known as APRA, the Australian Prudential Regulation Authority, and I remember back then securitization was in its infancy. And the regulator, which was the Reserve Bank at the time, was really struggling to catch up with what Macquarie Group was doing, or Macquarie Bank back then was doing. What you're talking about, I kind of see the theory of it, but it must be hard for regulators to even have the vision to see it.

Yeah. Exactly. And one of the things I think we need to as a tech community is embrace that and align with the regulators. We're not here to fight regulation. We need it. We need to (inaudible) shape it. And I think for us, we don't need to over- regulate, we've got some really strong governance protocols within real time payments as it exists today. We're building out a consumer data right framework with regulation to support open banking. And to an extent what's happening in digital assets, we absolutely need to bring the trust. We need custody, we need regulation at certain areas. But collectively we don't need to over- regulate areas that have already been regulated, so we can complement these different regulators coming together. And I think that's the challenge in itself. The regulators understand the boundaries and where they can rely on other regulatory bodies, rather than having to recreate the wheel themselves. And that's where I think the tech community really needs to engage, to support the regulators with the right outcomes, because we're all aligned to ultimately wanting to do the right thing to unlock that value back for our community.

Yeah. Exactly. And one of the things I think we need to as a tech community is embrace that and align with the regulators. We're not here to fight regulation. We need it. We need to (inaudible) shape it. And I think for us, we don't need to over- regulate, we've got some really strong governance protocols within real time payments as it exists today. We're building out a consumer data right framework with regulation to support open banking. And to an extent what's happening in digital assets, we absolutely need to bring the trust. We need custody, we need regulation at certain areas. But collectively we don't need to over- regulate areas that have already been regulated, so we can complement these different regulators coming together. And I think that's the challenge in itself. The regulators understand the boundaries and where they can rely on other regulatory bodies, rather than having to recreate the wheel themselves. And that's where I think the tech community really needs to engage, to support the regulators with the right outcomes, because we're all aligned to ultimately wanting to do the right thing to unlock that value back for our community.

How close are we to getting to a framework that allows that to happen? I'm sure things like FTX and that can't help, and certainly it doesn't help in the court of public opinion. Regulators I'm sure would be more across it, but how close are we to getting a regulatory system that works for you?

How close are we to getting to a framework that allows that to happen? I'm sure things like FTX and that can't help, and certainly it doesn't help in the court of public opinion. Regulators I'm sure would be more across it, but how close are we to getting a regulatory system that works for you?

I think, again, it's not going to happen overnight. I see it as an evolution. I think to be able to regulate and fight another FTX happening, that should be pretty straightforward in terms of regulation around custody, et cetera, et cetera. But as we go deeper into it, it's just going to take time. And I think that's where we really need to lean into what those use cases that are emerging are, and have really active voices in doing that. So you're right, it's not going to be overnight, it will take time. But that's where the commitment... And we're seeing that already with the central bank at the moment. They've put out this pilot around central bank digital currencies, to really understand... Want to work with the market to say, " We'll make an environment available to use cases that are submitted, and we'll work with those merchants and a platform, a digital asset provider, plus the regulators, to observe and see what comes of it, so that we can refine and ensure we've got the proper structure going forward." But all of this will take years, not months.

I think, again, it's not going to happen overnight. I see it as an evolution. I think to be able to regulate and fight another FTX happening, that should be pretty straightforward in terms of regulation around custody, et cetera, et cetera. But as we go deeper into it, it's just going to take time. And I think that's where we really need to lean into what those use cases that are emerging are, and have really active voices in doing that. So you're right, it's not going to be overnight, it will take time. But that's where the commitment... And we're seeing that already with the central bank at the moment. They've put out this pilot around central bank digital currencies, to really understand... Want to work with the market to say, " We'll make an environment available to use cases that are submitted, and we'll work with those merchants and a platform, a digital asset provider, plus the regulators, to observe and see what comes of it, so that we can refine and ensure we've got the proper structure going forward." But all of this will take years, not months.

I always find when I talk to someone about this stuff, it's really hard to understand. And I'm not a visionary by any stretch, so there's concepts here which I'm trying to get my head around. But incredibly exciting, because it does actually make a more, maybe not a frictionless, but a far less friction payments system, which should make transactions, whether that's with my local supplier or someone overseas, a lot easier and cheaper.

I always find when I talk to someone about this stuff, it's really hard to understand. And I'm not a visionary by any stretch, so there's concepts here which I'm trying to get my head around. But incredibly exciting, because it does actually make a more, maybe not a frictionless, but a far less friction payments system, which should make transactions, whether that's with my local supplier or someone overseas, a lot easier and cheaper.

Exactly. And I like to think I am a bit of a visionary, but at the same time, I think it's more of a pioneer. I cannot help but feel so overwhelmingly excited when you look forward, thinking about what we can create, what we can do, that ultimately unlocks what you just said, value back for businesses and consumers in this country, that otherwise is stuck in traditional payment channels or traditional ways of doing business that need to evolve. Exactly.

Exactly. And I like to think I am a bit of a visionary, but at the same time, I think it's more of a pioneer. I cannot help but feel so overwhelmingly excited when you look forward, thinking about what we can create, what we can do, that ultimately unlocks what you just said, value back for businesses and consumers in this country, that otherwise is stuck in traditional payment channels or traditional ways of doing business that need to evolve. Exactly.

Chris, thank you for talking to Fear and Greed.

Chris, thank you for talking to Fear and Greed.

Sean, it's been a pleasure.

Sean, it's been a pleasure.

That was Chris Jewell, CEO of Zepto. This is the Fear and Greed daily interview. Join us every morning for the full episode of Fear and Greed, Australia's most popular business podcast. I'm Sean Aylmer. Enjoy your day.

That was Chris Jewell, CEO of Zepto. This is the Fear and Greed daily interview. Join us every morning for the full episode of Fear and Greed, Australia's most popular business podcast. I'm Sean Aylmer. Enjoy your day.