Carmelle Cadet from EMTECH and Mark Yusko from Morgan Creek Capital Management recently teamed up with Genfinity to explore the exciting frontier of digitization and emerging technologies within central banking and financial services.
Our conversation spanned a breadth of subjects, from contemplating the implications of tokenizing cash and central banking infrastructure to envisioning how blockchain technology could reshape the very foundations of the financial system. Additionally, we delved into the potential unleashed by cutting-edge technologies such as the roles of AI and encryption.
Join us as we unravel the intricate tapestry of possibilities that lie at the intersection of innovation and finance, guided by the expertise of our panel.
EMTECH: Empowering Financial Inclusion through Web3 Innovation
Carmelle Cadet
Carmelle Cadet, Founder & CEO of EMTECH, traces her journey into Web3 technology, highlighting her early fascination with financial services spurred by her migration from Haiti to the US. Despite facing disparities in financial accessibility, Carmelle’s pragmatic approach led her to a career at IBM, where she discovered the transformative potential of technology in addressing financial challenges. Furthermore, transitioning from corporate finance to blockchain, she embarked on a mission to modernize central banking infrastructure globally.
Notably, Carmelle’s journey from corporate finance at IBM to the blockchain division was a transformative leap into the heart of technology’s potential in the banking sector. Winning a bid with the Central Bank of Bahamas served as a pivotal moment, igniting her vision for leveraging blockchain to modernize central banking infrastructure globally. Recognizing the broader implications beyond cash tokenization, Carmelle spearheaded a mission to revolutionize outdated systems with cutting-edge technology.
Her realization that blockchain could streamline central banking processes spurred a focus on modernization, challenging conventional norms. Carmelle’s passion for harnessing technology’s power to drive efficiency and security within banking institutions fueled her team’s mission to redefine the future of banking infrastructure.
Project New Dawn
Reflecting on the genesis of Project New Dawn, Carmelle recalls a pivotal moment during the COVID-19 pandemic when the US Congress faced the challenge of distributing cash to millions without access to traditional financial services. This realization sparked the vision for a digital cash infrastructure to bridge the gap in the financial system. Moreover, this inspired a whitepaper outlining the concept of Central Bank Digital Currency (CBDC) as a modernized, Web3-enabled solution.
This initiative aimed to address the inefficiencies of paper cash infrastructure, which was not only manual and costly but also slow to adapt. Notably, the project laid the groundwork for a core tech stack, leveraging innovative protocols like Hedera to streamline processes and enhance accessibility.
Transitioning from conceptualization to implementation, Carmelle and her team engaged with central banks worldwide, including the Bank of Ghana, to conduct pilots and refine their approach. These collaborations focused on exploring offline capabilities and ensuring privacy while maintaining integrity and accountability in token transactions. Furthermore, discussions with the Bank of Ghana emphasized the importance of future-proofing CBDCs by embracing Web3 technologies, garnering excitement from the FinTech ecosystem in Ghana. This journey underscored the significance of modern central banking infrastructure in driving economic development and fostering financial inclusivity in a rapidly evolving digital landscape.
Bridging the Data Divide in Web3
Acknowledging the transformative potential of technology, EMTECH focuses on enhancing data capture and analysis capabilities to streamline processes and drive informed decision-making in the financial sector. Through change management initiatives, they empower institutions to leverage technology effectively. Notably, this fosters collaboration and also bridges the data gap in Web3.
Furthermore, EMTECH reimagines central banking as a service, forging strategic partnerships with entities like Blade Labs and Flutterwave to expedite regulatory processes for FinTechs. By emphasizing compliance with central banking regulations and delivering maximum value to their clients, EMTECH remains committed to continuous innovation and adaptation, driving progress in the ever-evolving landscape of digital finance.
Unlocking the Future: Mark Yusko’s Vision for Technology and Investments
Mark Yusko’s journey into the world of finance was far from conventional. He initially considered architecture and medicine before finding his passion in the investment realm. Beginning his career assisting with Notre Dame’s endowment, he later managed another endowment in North Carolina before founding Morgan Creek Capital Management around two decades ago. This marked the start of his pioneering venture in outsourced investment services. Throughout his career, Yusko maintained a steadfast commitment to innovation. This is evident in his investments in tech giants like Google, eBay, and Amazon, showcasing his ability to identify emerging trends.
Introduced to Bitcoin and blockchain over a decade ago, Yusko’s interest was reignited by a significant price surge in 2014, prompting a deep dive into digital assets. With a desire to capitalize on the blockchain sector’s potential, Yusko entered the realm of venture capital. Notably, he looks forward to leveraging his wealth of experience and insights for the benefit of others in the future.
Geopolitical Insights
Mark set the stage with a captivating analogy, likening the anticipation before a baseball game to the unfolding evolution of technology. He drew parallels to Neal Stephenson’s visionary novel “Snow Crash,” reflecting on its prescient themes and their gradual realization. When asked about the emerging tech landscape, Yusko elaborated on the transformative potential he sees unfolding, likening it to the anticipation before a monumental event, signaling the dawn of a new era in technology and investments.
Yusko additionally highlighted the flaws within the current financial system, including the outdated mechanisms of SWIFT and Fedwire, which he sees as tools of coercion rather than facilitators of equitable trade. He underscored the historical significance of America’s rise to hegemonic power, driven by alliances and the global adoption of the US dollar as the reserve currency, enabling geopolitical control through economic sanctions and asset seizures.
Transitioning to recent geopolitical dynamics, Mark noted shifts such as Russia’s collaboration with BRICS nations and the changing dynamics between the US, Saudi Arabia, and China, which have challenged the traditional dominance of the US-led financial system. He expressed concern over the escalating national debt and the adoption of Modern Monetary Theory (MMT), cautioning against the potential repercussions for middle and lower-income groups, drawing parallels to historical patterns of dictatorial regimes.
Navigating Regulatory Challenges: Insights and Concerns
Mark dove into a critical examination of the SEC, expressing a sense of obligation to voice his apprehensions despite the associated risks. While he acknowledged the commendable efforts of government figures like Senator Lummis and Patrick Henry, he directed scrutiny toward other regulators for what he perceives as detrimental regulatory policies.
He underscored the resistance of the financial services industry to blockchain innovation, pointing out how decentralized technologies pose a threat to conventional banking systems. Moreover, Mark argued that existing regulations act as barriers to progress, citing instances which he suspects might have been orchestrated to impede the advancement of the emerging ecosystem. Furthermore, Mark cautioned against excessive regulation, fearing it could drive innovation abroad. Innovation moving abroad could prohibit America’s leadership in the digital asset arena; it is imperative to have regulatory frameworks that encourage innovation rather than suppress it.
Bitcoin: a beacon of hope
Delving into the realm of cryptocurrencies, Yusko offers a profound analysis of Bitcoin’s monumental rise. From its humble beginnings to its staggering $1.3 trillion market cap, he traces Bitcoin’s journey and its potential to dethrone gold as the base layer of money. Responding to a question about Bitcoin’s trajectory, Yusko paints a vivid picture of its transformative impact on the financial landscape, highlighting its potential to redefine the concept of money and store of value in the digital age.
He believes that the brilliance of Bitcoin lies in its immutable and secure nature; one Bitcoin always remains one Bitcoin. However, despite its inherent stability, Bitcoin is often priced in other currencies like dollars, yen, euros, or even the troubled Bolivar currency. Moreover, over the past few years, Bitcoin has consistently reached new all-time highs, particularly in countries like Japan, where the local currency’s value continues to erode. In nations such as Turkey, Argentina, and Venezuela, where fiat currencies face significant devaluation, Bitcoin emerges as a beacon of hope for preserving wealth.
This macroeconomic reality has led to a widespread realization that traditional financial instruments and central bank policies offer little respite from the global currency devaluation race. As a result, assets with inherent scarcity, be it collectible cars or tokens secured on blockchain networks, have notably gained immense value in recent times.
Navigating the Investment Landscape
Shifting gears to the investment landscape, Yusko discusses the broader implications of emerging technologies. He emphasized the transformative potential of Web3, built upon robust technological foundations, and advocates for a focus on ideas over individuals or events. When prompted about investment strategies in the rapidly evolving tech landscape, Yusko underscored the importance of forward-thinking approaches that prioritize long-term value creation and innovation.
Exploring the convergence of artificial intelligence and blockchain technology, Yusko delves into the concept of “blockchain intelligence.” He discussed the integration of AI and blockchain as a catalyst for innovation across various sectors, heralding a new era of possibilities. Furthermore, in response to inquiries about AI’s role in shaping the future of computing, Yusko highlighted the transformative potential of AI-driven solutions, particularly in enhancing data security and privacy in decentralized networks.
Morgan Creek’s latest fund zeroes in on the “ABCDs” of the digital era, focusing on AI, Blockchain, chips, and data. He is excited about the investment in a couple of chip companies diving into fully homomorphic encryption. Calling it a “game-changer,” the investments tackle the security gaps we face daily — our encrypted data becoming vulnerable the moment we need to work on it. Engineers have cracked the code, allowing humanity to work on encrypted data without the risk of breaches. Mark noted that this tech is revolutionary, and if they pull it off, it’ll shake up every server and cloud business out there.
Looking ahead
Acknowledging Bitcoin’s remarkable journey from obscurity to a $1.3 trillion market cap, Mark speculated on its potential to supplant gold as the base layer of money. Contemplating the broader implications for the ecosystem, he pondered the exponential opportunities awaiting beyond Bitcoin’s ascent. He also cited the power of collective intelligence and the importance of discussing big-picture ideas — the focus should be on ideas rather than individuals or events. Most importantly, he envisions Web3’s capacity to generate wealth on an unprecedented scale, driven by the power of exponential growth.
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