In This Newsletter
Unlocking the Power of Blockchain: Real World Use Cases
The Next FinTech Unicorn: Investment Opportunities in FinTech
Demystifying the Metaverse: The New Era of Interconnectivity
Last month, the Milken Institute hosted its Middle East and Africa Summit in Abu Dhabi. The FinTech program brought together thought leaders, industry innovators, and global investors to discuss blockchain, disruptive financial startups, and the metaverse.
Unlocking the Power of Blockchain: Real World Use Cases
Fintech Director Nicole Valentine moderated the session Unlocking the Power of Blockchain: Real World Use Cases. The panel featured an in-depth look at the future of the crypto industry after the tumultuous collapse of trading giant FTX.
Fintech Advisory Council Member and Wave Financial Group CEO David Seimer kicked off the discussion with a walkthrough of the misaligned incentives and market forces behind the FTX collapse. He discussed how FTX’s commingling of client funds was similar to the unscrupulous business practices of Celsius, which faced a similar crisis after the fall of TerraLuna this spring.
Following up, Binance MENA President Richard Teng commented that “Client money is sacrosanct.” Teng suggested that, moving forward, exchanges would need to offer full transparency about proof of funds and reserves, establish common industry standards, and find capital and liquidity to prevent good projects from going underwater.
Coinbase Strategic Advisor John D’Agostino commented that FTX’s collapse might signal a need for centralized methods of trust in the crypto industry. For the time being, he suggested measures like validation of crypto exchanges by regulators, public reporting, and ratings agencies. Despite crypto’s promise of trustless decentralized systems, he noted that centralized measures may be necessary to rebuild trust in the short term.
The conversation shifted focus to emerging global use cases for blockchain. The panelists touched on several non-financial applications of blockchain: NFTs in gaming, land registry, and health records. Input Output’s CEO, Jeff Pollack, highlighted Cardano’s merchant banking rollout in Africa and the potential applications of blockchain for digital identity. Kinga Bosse, CEO of Lukka, discussed how blockchain is making international payments and settlement cheaper and more efficient.
As the blockchain industry moves forward out of its recent tumult, there was consensus on the panel that, if any proposed use case is to be adopted, international industry standards would be necessary. The lack of international standards for crypto has enabled regulatory arbitrage that has been exploited by firms like FTX.
The Next FinTech Unicorn: Investment Opportunities in FinTech
Michael Piwowar, executive vice president of finance at the Milken Institute, moderated the session The Next FinTech Unicorn: Investment Opportunities in FinTech. The panel focused on early-stage investment in FinTech startups, areas of finance that are ripe for innovation, and global markets where that innovation is most likely to happen.
Jeff Cruttenden, co-founder of Treasury and co-founder of Acorns, spoke about his experiences as a founder of tech startups and the importance for founders to have total mastery over their products. Maëlle Gavet, CEO of Techstars, shared her experiences as an early investor in FinTech startups and the importance of mentorship when supporting founders.
When asked if there will be another crypto unicorn after this past month’s dramatic FTX collapse, Ola Doudin, CEO of BitOasis, discussed the enormous growth in investment opportunities she has seen in Middle East and North Africa (MENA), Pakistani, and Turkish markets. Following up, Jalak Jobanputra, founder and managing partner of Future Perfect Ventures, emphasized the potential of decentralized finance to expand access to financial services in emerging economies with historically exclusionary financial practices.
Panelists shared their insights on emerging applications for FinTech. Sebastian Siemiatkowski, CEO of Klarna, discussed big data, AI, and interoperable financial records. He shared the role virtual financial advisors could play to frictionlessly optimize financial services in the future. Jeff Cruttenden noted how financial technology has the potential to empower retail investors through modernization of legacy financial infrastructure, like proxy voting.
Demystifying the Metaverse: The New Era of Interconnectivity
Louise Tabbiner, Milken Institute senior advisor, moderated the session Demystifying the Metaverse: The New Era of Interconnectivity. Tabbiner led a conversation focused on the potential of the metaverse to directly involve users in collaborative online experiences.
Robby Yung, CEO of Animoca Brands, discussed the importance of digital property rights, ownership, and compatible data to the metaverse’s function. Yung called interoperability the “holy grail” of the metaverse. With interoperable platforms, users will be able to take their digital identity with them as they navigate the metaverse. He discussed efforts to create industry standards to enable this vision of the internet.
Lucas von Cranach, founder and CEO of OneFootball, expanded on the idea of interoperability, discussing how ownership of digital assets will enable users to break free of the walled gardens that dominate Web2. In walled gardens, user’s experiences, content, and identity on one social media, streaming, or gaming platform cannot readily be moved onto another. Von Cranach expects tokenization and NFTs to enable users to move their data seamlessly between platforms in the metaverse.
Paris Hilton, CEO of 11:11 Media, discussed her flagship project Paris World, where she has hosted events for her fan base including fashion shows and an annual New Year’s Eve party. She focused on how metaverse platforms can create shared experiences online without the physical constraints of in-person events. Hilton sees the metaverse as a future hub for gaming, shopping, working, and socializing. She announced the launch of her new partnership with Hilton Hotels to bring their properties into the metaverse.
The metaverse promises to bring people, creators, and brands closer together than ever before. Falon Fatemi, CEO and co-founder of Fireside Chat, used the analogy of a cooking show where the viewers at home can become the studio audience, cook alongside the host, and monetize their participation on the show. She described how content creators can harness their relationships with their fan bases to create, finance, and promote projects while offering those fans exposure to the upsides of those projects through NFTs and Web3 tokens.
The panelists noted that users may access the metaverse through not only VR/AR headsets but with the mobile phone and computer tech we have today. They hypothesized that a Web3-enabled metaverse has the potential to upend the status quo of the attention economy, bring billions of users online, and forever change how fans and content creators interact.