Public Blockchain’s Promise: EY’s Paul Brody on tokenization, enterprise adoption, and privacy

Tokenization paul brody

As blockchain technology seeps slowly into the traditional financial services ecosystem, it is offering new opportunities through tokenization and decentralized finance (DeFi). Today’s episode of the Tearsheet podcast hosts Paul Brody, EY’s Global Blockchain Leader who shares his expertise on these developments. Paul is focusing on the promise of public blockchain and the challenges surrounding privacy. He is also the Chairman of the Enterprise Ethereum Alliance. Brody’s unique roles provide a distinctive perspective on blockchain adoption in enterprises.

Reflecting on his decade at EY, Brody explains, “One of the things I’m most proud of is how little our strategy has evolved. We’ve consistently believed in the value proposition of public blockchains.” EY’s blockchain initiatives center around asset tokenization. It focuses on privacy-focused solutions and enabling enterprises to scale blockchain use effectively.

Addressing misconceptions, Brody highlights a critical distinction. He says, “A lot of people don’t realize private blockchains have no privacy. They’re centralized systems without the benefits of a decentralized ledger.” This belief underpins EY’s commitment to public blockchains, which he argues are the only viable path for enterprises.  

Understanding Tokenization and Its Role in Financial Services  

As the conversion of real-world assets into digital tokens. It is emerging as a key enabler in financial services. According to Brody, “At a global level, I believe all B2B transactions are suitable for blockchains.” Tokenization allows enterprises to tokenize assets such as real estate, and bonds. It enables seamless transactions through smart contracts.

Brody identifies privacy as a major hurdle to enterprise adoption. “Enterprises need privacy technology to protect sensitive business information. This is essential for them to use public chains,” he explains. EY is investing heavily in privacy-enhancing technologies. It ensures transactions remain verifiable while safeguarding proprietary data.

The Debate: Public Blockchain vs. Private Blockchain

When discussing blockchain adoption, Brody stresses the limitations of private blockchains. He says, “Private blockchains defeat the purpose of decentralization.” He notes that private systems often lack transparency and security. These are the defining advantages of blockchain technology. Public blockchains, combined with privacy layers, offer essential infrastructure for enterprises. This enables blockchain adoption at scale. “Privacy infrastructure on a public chain allows enterprises to securely share data with partners. It retains control over what remains private while doing so,” he adds.

How Decentralized Finance and Stablecoins Are Shaping the Industry

Decentralized finance is another area undergoing significant evolution. Brody observes that lower interest rates could reignite innovation. It will make tools like yield-bearing stablecoins and staking protocols more attractive. “When interest rates drop, the extra yield offered by DeFi tools becomes much more appealing,” he notes.  

Stablecoins, especially those pegged to fiat currencies, are a cornerstone of this ecosystem. Brody envisions enterprises seamlessly integrating stablecoins into their operations. He also foresees the use of other digital assets becoming routine. This will enhance efficiency and reduce costs.

Looking Ahead: Blockchain in Financial Services  

Brody discussed how regulatory clarity could speed up blockchain adoption. This would be particularly beneficial for large financial institutions. He predicts, “The floodgates will open once clear rules are established.” Some banks have started exploring blockchain-based solutions. But, widespread adoption depends on a clear regulatory framework.

For enterprises considering blockchain, Brody emphasizes starting with customer needs. “The nightmare for banks is when their most valuable customers open accounts at crypto exchanges. This leads them to leave the bank’s ecosystem,” he warns.

The Big Ideas

1. Tokenization is transforming B2B transactions. “Every transaction comes down to tokenizing money, tokenizing the stuff. And automating the terms via smart contracts,” says Brody.

2. Public blockchains offer a compelling value proposition. “Private blockchains have no privacy,” Brody explains. He emphasizes the importance of decentralized, public systems for scalability and security.  

3. Privacy is essential for enterprise adoption. Brody highlights the need for privacy layers. He states, “Enterprises require privacy to share sensitive information securely on public blockchains.”

4. DeFi innovation is influenced by market conditions. Brody observes, “Lower interest rates make decentralized finance tools much more appealing. They do so by doubling potential returns compared to traditional options.”

5. Regulatory clarity will drive enterprise adoption. “The true race begins once the rules are clear. Until then, enterprises will hesitate to commit fully to blockchain-based solutions,” Brody asserts.  

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Web3 companies also need payroll: Franklin’s CEO Megan Knab explores blockchain’s role in financial tools

crypto megan knab

Franklin bridges the gap between Web3 and traditional finance, rethinking how businesses manage payroll and payments. Today’s podcast features Megan Knab, Franklin’s CEO. She shares insights into the transformative role of blockchain in financial operations. She has a vision: leveraging blockchain to modernize payroll and financial tools. Megan has a rich fintech background comprised of roles at Serotonin, DriveWealth, and Veriledger.

As an accountant by trade, Megan is no stranger to navigating financial systems. She became passionate about blockchain in business school after discovering an accounting fraud at work. “Public blockchains,” she recalls, “have the power to create an open financial system.”  

Megan founded Franklin two years ago to simplify financial operations for Web3 businesses. She focuses on making finance easier and more efficient. She notes, “Anyone who’s used payroll software in the last 10 years knows it can be an antiquated experience.” Franklin integrates both fiat and on-chain payment capabilities. This strategy allows it to operate in both Web3 and traditional finance. As a result, Franklin is carving out a unique niche in both areas.

Crypto and financial tools  

Megan highlights blockchain’s potential to enhance back-office operations for B2B organizations. She notes, “Stablecoins can leapfrog current payroll technologies by facilitating faster payments.” She also explains that blockchain’s immutability ensures greater accuracy in financial reporting. This also builds trust in the data. “By using public ledgers, businesses can reduce errors and streamline audits. This creates efficiencies that traditional systems struggle to match,” Megan adds.

Blockchain’s ability to integrate with existing payment systems is driving innovation. This is creating new financial tools for modern business needs.

Tax compliance and crypto  

One of Franklin’s standout features is its focus on tax compliance. Megan explains, “We build tools that ensure every transaction adheres to federal and state regulations.”  She emphasizes that Franklin’s proactive approach simplifies navigating the regulatory maze. “With over 675 tax jurisdictions in the U.S., automation is critical for ensuring accurate reporting. And avoiding costly errors,” Megan notes. This commitment makes Franklin a trusted partner for businesses handling complex payroll systems.

Decentralized finance for B2B

Megan believes decentralized finance (DeFi) has practical use cases for businesses. ” We’re helping companies operate seamlessly in fiat and crypto. Whether it is multi-currency payroll or international remittances,” she says. 

She also highlights the cost advantages of DeFi. “Businesses can reduce transaction fees and enhance payment speed. It does so by eliminating intermediaries. These are critical factors for today’s global operations,” Megan explains.

Early Wage Access without loans

Franklin’s approach to early wage access differs from traditional models. Megan critiques typical earned wage access programs as “modern payday lending”. She advocates for faster money movement using stablecoins instead. She adds, “Why burden employees with hidden loan agreements when we can facilitate instant payouts?” This method empowers workers and also minimizes administrative overhead for businesses. Franklin uses stablecoins to provide an alternative to outdated payroll systems. This creates more flexibility for both employers and employees.

The Path Forward: Privacy and adoption of crypto

For broader blockchain adoption, Megan identifies a need for privacy technologies. “Financial institutions will continue experimenting rather than integrating. This will happen until we address privacy concerns.” she asserts.

She highlights solutions like zk-SNARKs as promising but notes their computational expense. “The key lies in enabling selective disclosure of transaction data. It includes ensuring both compliance and confidentiality,” Megan explains. She envisions a future where blockchain is a core part of financial infrastructure — not just an experiment. Advances in privacy tech can make this possible.

The Big Ideas  

1. Blockchain Drives Transparency and Efficiency. Megan states, “Public blockchains can create transparency in financial systems. But adoption in heavily regulated industries remains challenging.”

2. Multi-Currency Payroll Is a Necessity for Modern Businesses. Franklin’s tools enable businesses to pay in both fiat and stablecoins. “This flexibility is crucial for modern, remote-first teams,” Megan explains.

3. Tax Compliance Is Key to Crypto Adoption. “With over 675 tax jurisdictions in the U.S. alone,” Megan points out, “building a compliant payroll system is no small task, but it’s essential.”

4. Faster Payroll Cycles Empower Both Employers and Employees. Megan challenges traditional pay cycles. She asks, “Why should employees give interest-free loans to their employers? Stablecoins offer a faster alternative.”

5. Bridging Traditional Finance and Decentralized Systems Is the Real Opportunity. Megan underscores the importance of hybrid models. She says, “Real market potential lies in bridging traditional finance with decentralized systems.”

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