Fintech is expensive. Fintech is everywhere. If you are a thinking about starting a financial services company, and it does not have technology at its core -- don't. You will lose to someone similarly positioned building a more augmented business. Fintech is the global competition for regulation, talent, and macroeconomic supremacy. Fintech is the trade war between the US and China. Fintech is Facebook and Amazon. Fintech is the next bubble to burst. Fintech has burst already.
Paying attention is the path to seeing and doing. Mastercard has bought CipherTrace to see blockchain-based finance, to launch new businesses, and to plug in more networks into its nexus. The crypto networks proliferate at every layer, creating more computation on Ethereum, Polygon, Arbitrum, Optimism, Fantom, and Solana. The US executive seeks to see more too, asking the banks for their records of financial transactions to enforce taxation compliance.
In this conversation, we talk with Patrick Berarducci of ConsenSys, about the valuations and multiples of capital markets protocols in Decentralized Finance on Ethereum, now making up over $60B in token value. Additionally, we explore the nuances of scaling Ethereum and its solutions, such as Metamask and the emerging Layer 2 protocols.
We also discuss law and regulation, including a fascinating story about Bernie Madoff from when Pat was a practicing attorney. This leads into a conversation about the embedded compliance nature of blockchain and crypto technology, the early days of ConsenSys, the path of crypto brokerages like Coinbase, and Metamask exhibiting emerging qualities of a neobank.
I have been reading Alibaba: The House that Jack Ma Built this week, something everyone interested in understanding the future of Google, Goldman, Uber, or Amazon should do. The narrative starts with China's small business explosion, and Ma's genius is to tap into global demand for the products of those businesses through an online marketplace and associated financial services. But I am getting ahead of myself. Let's pause to acknowledge a massive, systemic transaction that was announced this week: payments processing company Global Payments acquiring TSYS (Total Payments Systems) for $21.5 billion.
