As CEO of Provenance Blockchain Foundation, Anthony Moro is at the forefront of remaking the plumbing of Wall Street. With an extensive background at financial institutions like BNY Mellon, one of the world's largest asset servicing banks, Anthony has witnessed firsthand the inefficiencies in traditional financial infrastructure. His unique perspective bridges the gap between traditional finance and the innovative world of blockchain technology, making him a valuable voice that cuts through through a lot of the BS and noise we hear in this space.
In this episode, Anthony explains how public blockchain networks like Provenance are building a modern shared operating system for asset issuers and investors. By tokenizing financial assets on-chain, Provenance enables faster, cheaper and safer transactions - potentially disinter-mediating trillions in fees. This conversation explores how blockchain technology is addressing the inefficiencies of traditional banking, revolutionizing asset management through tokenization, reimagining currency with stablecoins, reducing transaction costs, and ultimately, paving the way for a new financial paradigm.
Watch the full episode here:
Here’s what I’ll dive deeper into below:
- The Inefficiencies of Traditional Banking [00:42]
- Blockchain's Solution: Tokenizing Real-World Assets [15:52]
- Reimagining Currency: The Promise of Blockchain-Based Stablecoins [23:31]
- Cutting Out the Middleman: Blockchain's Impact on Transaction Costs [27:36]
- The Long-Term Vision: A New Financial Paradigm [37:17]
The Inefficiencies of Traditional Banking
Anthony Moro highlights the costly inefficiencies in the current financial system:
"It's a bunch of disparate systems, computer systems linked together by a bunch of very old processes that are managed by both people and technology. It's a trusted system, but it's time for that trusted process to move to a truthful process."
The existing financial infrastructure, while functional, is riddled with inefficiencies and redundancies. These systems, built on trust rather than truth, lead to higher costs for consumers and slower transaction times. Blockchain technology offers a solution to these longstanding issues by providing a more streamlined, transparent, and cost-effective alternative.
Blockchain's Solution: Tokenizing Real-World Assets
As we move towards a new financial system, Moro highlights how blockchain can revolutionize the handling of various assets:
"We like three distinct areas. Alternative asset funds, loans, and all sorts of receivables. In the factoring and receivable world, it's really broken because there's no trust. Blockchain again replaces trust with truth in that case, and it can materially lower factoring rates down from like 40% to 5% or 10%."
By tokenizing real-world assets, blockchain addresses the trust issues inherent in traditional finance. This shift not only increases efficiency and reduces costs but also unlocks value in previously illiquid assets, creating new investment opportunities for a broader range of investors.
Reimagining Currency: The Promise of Blockchain-Based Stablecoins
Building on the concept of tokenization, Moro explains how blockchain could transform our very notion of currency:
"A yielding stablecoin governed by the SEC, regulated by the SEC with very clear deposits that allowed a peer-to-peer exchange of the token. If it was a stable dollar and it paid us a daily yield. Then I think we have something. Then I think we're starting to truly revolutionize financial services."
This evolution of currency through regulated, yielding stablecoins represents a significant step towards a more inclusive financial system. By providing easier access to stable, yield-generating assets, blockchain technology could reduce reliance on traditional banking services and benefit underbanked communities worldwide.
Cutting Out the Middleman: Blockchain's Impact on Transaction Costs
Moro illustrates how blockchain's peer-to-peer nature could disrupt current payment systems:
"Visa, MasterCard, PayPal absolutely dominated in the space, but at their core, they're basically intermediaries in a two-party transaction. And they take a very large 3% fee for their services. ... That kind of fee is maybe the very, very early beginning of the end of the credit card networks."
By eliminating intermediaries and their associated fees, blockchain technology promises to dramatically reduce costs for both merchants and consumers. This shift could lead to lower prices, increased profit margins, and more efficient economic transactions, potentially transforming industries heavily reliant on payment processing.
The Long-Term Vision: A New Financial Paradigm
Moro envisions a future where blockchain fundamentally changes how we interact with financial services:
"Now I don't need a checking account. Do I even need a savings account? Do I need a treasury account if I'm an institution holding a lot of cash? You start to question the need for banks if this thing could be ubiquitous."
The long-term implications of widespread blockchain adoption in finance are profound. We could see a shift away from traditional banking structures towards more decentralized, efficient, and accessible financial services. This could lead to increased financial inclusion globally, more efficient allocation of capital, and new models of economic interaction. However, it also raises questions about the future role of banks and other financial institutions, and how they might evolve to remain relevant in this new paradigm.
