In This Newsletter
Bitcoin Booms and the Crypto Spring
FinTech Mega Trends at iConnections
2024 Future of FinTech Symposium
Milken Institute FinTech in LATAM
On March 1, Nicole Valentine was on the floor of the New York Stock Exchange, where Advisory Council Member Michael Sonnenshein and Grayscale Investments rang the opening bell after the Grayscale Bitcoin Trust was recently listed on the exchange. The approval of spot Bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission this January has dramatically increased demand for bitcoin, pushing the price beyond its $69,000 all-time high, Business Insider reports.
The approval of spot bitcoin ETFs has spurred billions of dollars of additional capital inflows to crypto markets as institutional investors can now achieve exposure to Bitcoin without a digital wallet or digital asset exchanges. Kitco reports that last week, a record $1.8 billion of capital flowed into digital asset investment products, mostly into Bitcoin, signaling the end of the latest crypto winter and the return of crypto spring.
Nicole Valentine returned to the main stage at iConnections Global Alts 2024 to moderate the session “Crypto, AI & Mega Trends: Financial Gurus Break Down 2024's Biggest Shifts.” She led a conversation on the FinTech trends that are shaping the economy, society, and culture going into 2024. The session featured speakers Steven D'Mello, partner, Operational Due Diligence, Albourne; Lorien Gabel, CEO & co-founder, Figment; Steve Kurz, global head of asset management, Galaxy; and Mike Lazorik, director, private equity, Teacher Retirement System of Texas.
The conversation covered topics including the AI and digital assets intersection, the compliance use case for AI in asset management, the end of the crypto winter and an emerging crypto spring, institutional investment and adoption of digital assets, the approval of spot Bitcoin ETFs Web3 from the asset allocator's perspective, the investment case for Ethereum, and the next generation of killer apps.
This February, the FinTech Program hosted the 2024 Future of FinTech Symposium in partnership with the Kenan Institute, the Kenan-Flagler Business School at the University of North Carolina (UNC) at Chapel Hill, and ReThinc. Labs. We were honored to have 70 high-level participants, including leaders from academia, the private sector, and government, join us for an all-day, invitation-only, off-the-record roundtable that focused on the impact of innovative technologies on the financial system. Topics included the future of money, central bank digital currency, digital assets, tokenization, stablecoins, financial inclusion, artificial intelligence, policymaking, and how industry stakeholders can advance the responsible development of the FinTech industry.
We would like to thank and recognize the members of our FinTech Advisory Council who were able to participate in the symposium: Corey Carlisle, head of impact and public policy, Varo Bank; Eric Ghysels, Edward M. Bernstein distinguished professor of economics and faculty research director, Rethinc. Labs, UNC Chapel Hill; Colin Jones, founder and chief investment officer, Outerlands Capital; David Musto, Ronald O. Perelman professor in finance, faculty director, Stevens Center for Innovation in Finance, the Wharton School; Michael Sonnenshein, CEO, Grayscale; and Ivan Soto-Wright, CEO, Moonpay.
The FinTech program also participated last month in the 2024 FinTech Mexico Forum organized by the Mexican FinTech Association. Paul Leder, senior fellow, Global Market Development, represented the program. The event brought together leaders, regulators, authorities, and innovators of the FinTech world and the financial ecosystem throughout Mexico to discuss the rapid expansion of the Mexican FinTech industry, the emergence of a digital economy in the country, the democratization of financial services, and the impact of FinTech on the lives of millions of Mexicans.
Mexico has become an emerging hub for FinTech innovation. FinTech start-ups are providing financial services to a country that has been lagging the Latin America (LATAM) region in metrics like bank account ownership. According to the World Bank, Mexico has a 48 percent account ownership rate compared to Latin America’s average account ownership rate of 78 percent.
Renewed activity in the Mexican FinTech industry comes after the government laid out a comprehensive regulatory and legal framework for the country’s FinTechs in 2018. Justworks reports that the Mexican FinTech industry now accounts for over 20 percent of the country’s total venture capital funding. More than 200 Mexican start-ups received over $600 million in equity financing in 2023. The country now hosts multiple FinTech unicorns, such as corporate expense management platform Clara, credit card issuer Stori, crypto exchange Bitso, payments platform Clip, and banking software developer Konfio.
Brazil has also come to the forefront of the region’s FinTech innovation landscape. Milken Institute CEO Rich Ditizio and EVP of MI International Laura Deal Lacey convened a private session this January in Sao Paulo, Brazil, featuring a select group of founders from Sao Paulo’s tech scene to delve into their revolutionary technologies, critical societal impacts, and the vast array of success stories and business opportunities brought forth, both within Brazil and on the international stage.
Brazil is a global leader in mobile and digital banking innovation, where FinTech adoption has dramatically closed gaps in access to financial services. According to the World Bank, as mobile banking has become more widespread over the last decade, 83 percent of Brazilian adults now have a bank account, up from 55 percent in 2011. Brazil’s dynamic neo-banking industry has driven that transformation, led by firms such as Nubank.
Additionally, Brazilian public investment in its instant consumer payments system Pix has enabled the quick execution of payments and transfers 24/7. The Central Bank of Brazil launched the platform in November 2020, and in its first year of operation, Pix processed more than 6 billion transactions totaling approximately US$682 billion, according to Bloomberg. The platform has been characterized as Brazil’s answer to M-Pesa, a low-cost, secure, ubiquitous payment platform that enables underbanked or underserved people to participate in the financial system.
