The hosts discuss the life cycle of a transaction, including the payment and settlement processes. They explain that payments can vary depending on the type of transaction, such as retail, remittances, or e-commerce. Settlements can be done through ACH or RTGS systems, with the latter involving real-time gross settlement in central bank money. The hosts also touch on the trust issues between banks and the potential risks of bankruptcy. They clarify that money doesn't disappear when a bank goes bankrupt, but rather the government steps in to ensure orderly repayment. The conversation concludes with a discussion on the structure of a bank's balance sheet and the distinction between illiquid assets and liabilities. The conversation delves into the complexities of the life cycle of a transaction, including the role of commercial banks, central banks, and payment infrastructures. It explores the concept of liquidity and the challenges banks face in maintaining sufficient liquidity to meet customer demands. The conversation also touches on the importance of standardization and security in payment systems, with a focus on the role of Swift in facilitating communication between banks. The discussion highlights the need for coordination and cooperation among various actors in the financial system to ensure smooth and efficient transactions. The conversation explores the tension between Swift and Russia, the role of Swift in the global financial system, and the relationship between Swift, Visa, and Mastercard. It also delves into the concepts of clearing and settlement, the potential of cryptocurrencies and stablecoins, and the perception of traditional finance (TradFi) towards crypto. The discussion highlights the need for collaboration and adaptation between traditional finance and crypto technologies. The conversation explores the topics of stablecoins, central bank digital currencies (CBDCs), and the challenges and opportunities they present. It discusses the differences between stablecoins and traditional banks, the potential of stablecoins to disrupt the payment system, and the failures of previous attempts by Facebook to create a payment system. The conversation also delves into the motivations behind the development of CBDCs, the different components of CBDCs, and the potential impact on retail and wholesale payment systems. The challenges of regulating cryptocurrencies and ensuring the security and stability of the financial system are also discussed. keywords: transaction life cycle, payment, settlement, retail, remittances, ACH, RTGS, bankruptcy, trust, money circulation, balance sheet, transaction life cycle, commercial banks, central banks, payment infrastructures, liquidity, standardization, security, Swift, Swift, Russia, global financial system, clearing, settlement, Visa, Mastercard, cryptocurrencies, stablecoins, traditional finance, TradFi, stablecoins, central bank digital currencies, CBDCs, payment system, Facebook, regulation, fraud, transparency, financial stability