Can cryptocurrency and blockchain drive fintech innovation? Stanford’s Lisa Nestor weighs in

cryptocurrency lisa nestor

Could cryptocurrency be the key to bridging financial gaps? Can it create a more inclusive global economy?

Digital assets like stablecoins and blockchain technology are reshaping how we think about money. Their potential to level the financial playing field is becoming clearer. In today’s episode of the Tearsheet podcast, I sit down with Lisa Nestor, Research Director at the Stanford Future of Digital Currency Initiative to discuss how fintech innovation is paving the way for broader financial inclusion.

Lisa’s expertise spans blockchain technology, cryptocurrency, and fintech innovation. This makes her a leading voice in understanding the intersection of these fields.

Lisa’s career reflects a deep commitment to financial inclusion. 

“When I started researching Stellar,” Lisa shares. “It brought together what I had seen [and demonstrated] the power of providing open-source financial infrastructure.” This passion for creating accessible financial systems has guided her work. It also included her current research on stablecoins and digital dollar adoption.  

Lisa explains how cryptocurrency, stablecoins, and blockchain can make finance fairer. Her insights show how these innovations affect cross-border payments and financial inclusion. She also discusses their role in the evolving fintech landscape.

Cryptocurrency and Financial Inclusion  

Cryptocurrency has the potential to address the uneven access to financial services worldwide. Blockchain technology allows people in underserved regions to access digital wallets and stablecoins.

With new financial tools, more people can save, transact, and even earn. “Access to financial services is not an even playing field,” Lisa notes. “Distributed ledger technology can help level that field. It can do so by providing accessible and stable financial options.”

Stablecoins: Beyond Trading to Real-World Impact

Stablecoins are already impacting cross-border payments and savings in regions with unstable economies. Lisa highlights Argentina as a case study. She says, “Argentina’s economic situation has created a huge demand for digital dollars, with stablecoins playing a crucial role in hedging inflation and providing financial security.”

Digital Dollar Economy and Cross-Border Payments 

Lisa emphasizes how digital dollars simplify cross-border payments, especially for regions with limited traditional banking infrastructure. “Being able to hold a stablecoin in a digital wallet and earning some yield on it is a small but significant step towards democratizing finance,” she says.

Tokenization of Real-World Assets

Another emerging trend Lisa identifies is the tokenization of real-world assets (RWA). Blockchain makes traditionally illiquid assets, like real estate and art, more liquid.

This opens up global markets. “This approach improves liquidity. It makes these assets move seamlessly across the globe,” Lisa explains.

Fintech Trends in Digital Asset Adoption  

Lisa explores CBDCs (Central Bank Digital Currencies) and private stablecoins. She looks at how governments and businesses are adopting digital assets. She also discusses the opportunities and challenges they face. “Most central banks are researching how to launch CBDCs without negatively impacting their banking industry,” she says. Lisa highlights a cautious yet growing interest in these tools.

The Big Ideas

1. Open financial infrastructure creates a global ledger accessible to all. “The idea is to create a ledger that every financial institution in the world can operate on but can’t buy. It is open and available to everyone.”

2. Stablecoins provide financial security in unstable economies. “In emerging markets like Argentina, stablecoins offer a way to hedge inflation. They secure savings amidst economic instability.”

3. Tokenizing real-world assets improves liquidity and global accessibility. “Tokenizing existing assets brings improved liquidity and global accessibility to traditionally illiquid markets.”

4. Governments explore CBDCs to complement existing banking systems. “Central banks are focused on introducing CBDCs that complement. Rather than compete with, existing banking systems.”  

5. Digital dollars empower individuals in the gig economy. “More individuals are earning in digital dollars through online work. This is creating new economic opportunities without physical migration.”  

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A week after selling to Nasdaq, SecondMarket founder raises money for blockchain venture

bitcoin and blockchain investor, Barry Silbert, launches DCG

Barry Silbert is a man on a mission. As the founder of SecondMarket, the ink has barely dried on Nasdaq’s acquisition of the fintech platform specializing in tender offers (private transactions in private companies) and now the entrepreneur is on to his next big thing.

[x_pullquote type=”right”]As it gets more liquid, as a [payment] rail it will become a real alternative to the existing money transfer systems in the world today. — Barry Silbert, Digital Currency Group[/x_pullquote]Silbert took the opportunity of speaking from the stage at Money 20/20 to announce the launch of his new firm, Digital Currency Group (see its Crunchbase entry). DCG, a digital currency and block chain company, is being joined by an A-list of strategic investors. Bain Capital Ventures, Transamerica Ventures, FirstMark Capital, MasterCard, and New York Life will use DCG to gain exposure to the rapidly growing cryptocurrency space.

In addition to these investments, the company will also operate wholly-owned subsidiaries Genesis Global Trading, a bitcoin OTC trading firm, and Greyscale Investments, the firm that manages the publicly traded Bitcoin Trust (Symbol: GBTC). Silbert also said that DCG will launch a third wholly-owned subsidiary in 2016 (Source).

Fortune’s Dan Primack had more color on Silbert’s strategy driving DCG:

It also will house a portfolio of 57 seed-stage investments that Silbert and his team have already made, including Chain, Circle, Coinbase, Ripple and Xapo. They also have backed several companies looking to exploit bitcoin’s blockchain technology for uses outside of finance, including Ascribe (managing digital IP) and ShoCard (digital identification).

Silbert has been very active as an investor in the bitcoin space. He said that given the extent of his portfolio, he estimates that his portfolio has attracted 70% of all venture capital that’s been poured into the digital currency and bitcoing space.

Creating a digital currency ecosystem

Silbert plans to utilize DCG as a holding company of sorts to make further investments in the space. He told CoinDesk that DCG will invest in a further 10 to 20 companies in 2016.

Indeed, Silbert sees DCG’s role as more than just a seeder of new business in the fledgling market. With such a sizeable and influential portfolio, DCG can act as somewhat of an ecosystem for companies playing in the blockchain space.

Per CoinDesk:

In turn, his company is hoping to use its “unique position” in the industry to foster collaboration between entrepreneurs, investors and – crucially – legacy institutions, who are seeking answers about blockchain technology’s disruptive potential.

That’s just one side of the market. Large financial institutions, some of them making their first moves into the digital currency space, need the safety and guidance of a firm that’s helping to lead the charge. That’s where DCG comes in. With 5 showcase institutional investors, DCG may act as a curated accelerator of firms looking to do business with the incumbent financial industry. In this way, DCG can act as matchmaker, pairing up supply and demand between startup fintech firms and larger, multinational institutions looking to partner.

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