At the heart of Dr. Bryane Michael’s conversation with Regulatory Ramblings host Ajay Shamdasani is whether FinTech can help solve the social, financial, and economic problems previous generations like the Baby Boomers contributed to. They discuss whether Gen-Z's potentially decentralized world of finance will look radically different from ours. 

Gen-Zers and now Gen Alpha will grow up in a world designed and run almost exclusively by baby boomers. The DBS power outage was supposedly partly caused by a 'missing generation' unable to take charge during the crisis. Why have huge, octogenarian, organizational men-created lumbering bureaucracies that FinTech has been having problems shaping? 

Economists have struggled to understand why organizations exist for almost a century. Massive central banks, financial supervisors, regulators and now new stability boards pile on to gigantic financial services firms like Blackrock, Visa, and Allianz. Most of us distrust them. Scale has financial benefits even outside the financial sector – as Google and YouTube show. And there are no signs to show this trend abating. Pay apps on our mobile phones must still go through the same old architectures – using the same old rules. 

When you turn on MetaMask and use Ethereum, you get a whole different feeling of the Internet. Thousands of decentralized autonomous organizations, or DAOs, are creating tokens that can be almost anything you want them to be. 

Bryane shares an alternative view of finance and the economy in a decentralized finance (DeFi) world. All too often, we only hear the conservative viewpoints about FinTech. Yet, the law and economics of DeFi could look very different from what’s currently envisaged. The discussion centers around the, broadly speaking, two schools of thought on FinTech regulation – namely, the conservative (IMF/BIS) perspective versus the Web3/evangelistic viewpoints. 

This conversation also covers whether DeFi can solve the “public goods” (missing regulators) problem and create trustless local financial markets, as well as what will FinTech and RegTech mean for traditional property rights and the implications of computer code as law. The two also discuss who the winners of the brave new world of FinTech in the mid-21st century will be and what it might mean for Generation Z/the Zoomers. 

Bryane stresses that there is a better way to implement FinTech than to just computerize legacy financial institutions. However, he also shares his concerns about young people’s lack of say in shaping the financial architecture that will govern their generation “because the current approach simply shoves existing law onto digital markets instead of creating digitally native finance.” 

The chat concludes with a discussion about what four decades of debate have meant for cross-border payments as the issue remains a challenge in much of the world. 

About the Guest: Dr. Bryane Michael is a senior research fellow at HKU’s Faculty of Law. He also taught at Oxford University’s Said Business School. An economist and jurist by training, Bryane has been in finance most of his life. In recent times, his focus has been on trying to understand how Web3-based FinTech can help push sustainable development. 

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