Episode 022 - James Bianco, President & Founder; Bianco Research, Chicago; DeFi – Decentralized Finance

Distilling Venture Capital

Episode Introduction:

• Welcome back everyone. I am really excited about today´s program because we are going to do a deep-dive and explore DeFi – Decentralized Finance, a topic you hear much about but may have little insights into what this frontier technology is all about and what its true impact will be on the future of global finance.
• To help me do this I have the pleasure of welcoming to the show Jim Bianco who is the President and Founder of Bianco Research, LLC in Chicago. Jim is someone I consider a visionary thought leader on the DeFi sector. Jim, thank you so much for making the time to be on the podcast today…
• So, before we dig into the meat of what DeFi is really all about, I thought it would be useful if you could tell us a bit about your background and about your journey, more broadly, that ultimately led to take a bullish stance toward DeFi. Mainly because you have this traditional Wall Street, I-bank research background. Tell us how the long-time, traditional finance guy goes actively pro-DeFi…

Topic Areas to be covered

After introduction and you provide your background, I´d like to get into the following…

• In prior commentary, you stated you came to the realization that DeFi is a `brand new financial system.´ Expand on this revelation and what drew you to this conclusion.
• You have previously stated, Existing financial system is slow, cumbersome, has way too many permissions required, ´I basically have to beg my broker to do stuff´, it´s a series of toll booths´
• ´Current system is in trouble. Many in financial world don´t get it and they don´t want to get it.´
• ´You are going to look like a bunch of taxi drivers in a ride-sharing world.´
• I tell people about DeFi; ´It will come here and completely flatten you.´
• Jim: DeFi is also about fairness…You and I don´t get the Warren Buffet deals. With DeFi we get exactly the same deal
• Jim discusses ´qualified investors´ if you have over $1M net worth, `what an insult´
• You´ve previously segmented your clientele in two broad categories, ´Young and Old´ discuss what you mean by this with respect to understanding the impact of DeFi.
• Why does Warrant Buffet call crypto rat poison squared?
• Regulatory issues:
• Impact of central bank´s own digital currencies…expand on what you see going on here and why it´s not really DeFi…
• Jim: ´A CBDC, if done correctly, presents a financial threat to the existing financial system´…and in the end, they won´t do that b/c it bypasses the current banking system all together
• Jim: ´It´s not about technology or whether we have the design right – it´s about policy – how much do we want to disrupt the current banking system?´
• Regulation: Problems regulators have, they don´t understand what´s going on in the DeFi industry…´It´s a Cambrian explosion of ideas
• End of the day, I don´t know what regulators can do except regulate the ´On-and-Off Ramps´ (Uniswap, Kracken, etc.) i.e. – how do I get dollars to crypto and crypto back to dollars
• To the Regulators, ´what are you trying to do?´
• I see where we are going and it´s exciting and an explosion of ideas…

Closing Remarks

• James, what is a good way for those seeking additional information about Bianco Research to get in touch?
• • Website – www.biancoresearch.com

Thank you for joining me for this edition of DVC. I hope you found our discussion today with Jim Bianco interesting and it gave you better insights into what DeFi is really all about and what it means for the future of finance globally. I look forward to joining you on my next edition of DVC. Thank You…