Last week marked another milestone in the evolution of cryptocurrency. Visa announced they would let USD Coin, a stablecoin pegged to the U.S. dollar, settle on its payment network, and PayPal launched “Checkout with Crypto,” a service that allows customers to pay with cryptocurrency at checkout. These moves represent the latest brick to be removed… Read More »
Cryptoassets did not exist before 2009, the year that the Bitcoin blockchain was released and the first Bitcoins were mined. This new “asset” had no governmental backing and no tangible existence whatsoever, and was embodied only as a digitized code hosted on a computer network owned and controlled by private citizens. Yet, the original goal was to have this new technology… Read More »
Tesla made news earlier this month when the release of their 2020 annual report revealed the firm had purchased $1.5 billion in bitcoin and would begin accepting bitcoin as a form of payment for their “products in the near future.” Following this revelation, Tesla’s CEO Elon Musk tweeted: “Having some Bitcoin, which is simply a… Read More »
The democratization of finance is the self-proclaimed noble cause that Robinhood1 is pursuing by enabling commission-free investing for everyone. However, recent events revealed that the old saying “if it’s free, you are the product,“ has been successfully implemented in the retail investment world. In this article, we cover the recent GameStop fiasco, Robinhood’s business model, and what it means for a modern retail investor. GameStop Fiasco It all started with GameStop (NYSE: GME), a US video game retailer,… Read More »
Cryptoasset markets have experienced a paradigm shift over the past decade: originally regarded as a purely speculative investment, institutional investors are starting to appreciate cryptoassets’ unique return drivers. As of 2020, 45% of institutional investors in Europe and 27% in the US have exposure to cryptoassets, either directly or via futures contracts. Despite considerable interest in this evolving asset class, the question of what factors drive expected returns in cryptoassets remains largely unexplored. On the one hand, Cheah and Fry (2015) argue that Bitcoin… Read More »
In 2017, journalist Nick Ortega chronicled the story of how his house-cleaning service threw away a slip of orange paper with the private key to his cryptocurrency funds scribbled on it, costing him $30,000. A private key is an alphanumeric cryptographic code, which is the only way for a user to access his cryptocurrency. A… Read More »
The recent Wirecard scandal highlighted an old issue that has been disturbing scholars and policymakers about technology companies offering financial services – trust. While Wirecard collapsed due to fraud, the public debate has shifted towards the fact that most of the Fintech industry is subject to minimal regulation at best. In our recent paper, we… Read More »
Initial Coin Offerings (ICOs) are a relatively novel mechanism for entrepreneurs to raise capital by selling digital tokens to a crowd of investors. Tokens are cryptographically protected digital assets implemented on a blockchain, which is a novel approach to recording and transmitting data across a network in an immutable manner. ICOs are attractive for entrepreneurs… Read More »
Over the past 50 years, technology has transformed finance. During the 2010s, FinTechs, typically small, agile start-ups, were the focus of much of the attention. In our view, the focus of attention across the 2020s will be something entirely different: digital finance platforms. Quietly, behind the scenes, digital financial platforms are increasingly serving as indispensable… Read More »
The EU’s Fintech Action Plan (now Digital Finance Strategy) and the Sustainable Finance Strategy represent important pillars of the bloc’s current policy agenda. While the two areas have been treated as separate for a long time, they present certain common features and great potential if combined. The COVID-19 pandemic provides an opportunity for countries in… Read More »
