Why Australia Needs a Better Model for Its Enhanced Fintech Sandbox

Regulatory sandboxes are an important part of the ongoing global race to attract FinTech talent, as different economies keep launching new programs to support FinTech and attract innovators. Australia is no stranger to this race: between 2014 and 2020, the number of FinTech start-ups in the country increased more than seven-fold and exceeded 700. In […]

A Trip Down Crypto’s Memory Lane

Last month, I published an op-ed in the Wall Street Journal that argued for a ban on cryptocurrency in order to combat the ransomware plague that is devastating our economy and businesses across the country. My premise is simple. Cryptocurrency has been around for over a decade; that is more than enough time for us to take […]

The “Musk Effect”: How influential and well-known individuals can influence Bitcoin and other cryptocurrencies

On January 29, 2021, the price of one Bitcoin rose from $32,000 to $38,000 within a few hours. The catalyst for this jump appeared to be an update to Elon Musk’s Twitter bio. Musk used #bitcoin for his account description followed by a tweet that said: “In retrospect, it was inevitable.” At the time, the world was unaware that Tesla, Inc. had […]

Restoring Order in Crypto’s Wild West

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 […]

Finding a Regulatory Response to Crypto Sales that Actually Fits

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 […]

Beware of the Bitcoin Balance Sheet

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 […]

Democratizing of Free Markets’ Mission Failed

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, […]

Is There a Value Premium in Cryptoasset Markets?

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 […]

The Custody of Cryptocurrencies: OCC Opens the Door for Banks to Take Part in the Fintech World

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 […]

Disintermediating finance: Fintech and its limitations

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 […]