Is Crypto Fintech? It Depends Who You Ask

Is Crypto Fintech? It Depends Who You Ask

(Clark Van Der Beken/Unsplash)

Leah Callon-Butler, a CoinDesk columnist, is the director of Emfarsis, a consulting firm focused on the role of technology in advancing economic development in Asia.

Is crypto fintech? 

This comes across as a fairly benign question to most people. If fintech is simply a term describing a range of financial technologies, and crypto is a financial technology, among other things, then surely crypto is fintech… Right? 

When I posed the question to a few of my favorite crypto discussion forums across Telegram and Whatsapp, it clearly hit a nerve. The responses ranged from the philosophical: 

To the structural: 

To the categorical:

Based on these passionate declarations, it would seem that those who live and breathe crypto vehemently reject the fintech label. They view fintech as a mere iteration on the incumbent rails of traditional finance, while crypto is building something inherently transformational, coming from a fundamentally different place in terms of culture, identity and motivation. 

Apolline Blandin, Cryptocurrency and Blockchain Lead at the Cambridge Center for Alternative Finance (CCAF), in the U.K., believes that a crypto-asset perfectly fits its definition of alternative finance as a monetary system emerging outside the traditional one. “More importantly, it is aligned with our mission to unearth data about emerging industries,” said Blandin. 

CCAF, a research center at the University of Cambridge Judge Business School, was set up in 2015 to provide accessible fintech market insights to inform decision-making by policy makers, regulators and industry. In 2016, crypto and blockchain were added to its agenda.

Right now, CCAF is undertaking a study to understand how COVID-19 has impacted the global fintech landscape. Partnered with the World Bank Group and World Economic Forum, fintechs of all shapes and sizes are being asked to fill out by 31 July 2020. It only takes 30 minutes to complete and is available in 10 languages, but some crypto companies won’t even because they don’t identify as fintech.

The word fintech has become about as impactful as other overworked, misused words like disruption and innovation. So, in an effort to establish a lexicon that better portrays the true breadth, depth and complexity of the ecosystem, CCAF developed a taxonomy guide (see chart) that identifies 15 verticals, 11 subsets and 102 possible categories of financial services outside the traditional sector. These include digital lending and capital raising, mobile payments and remittance, “WealthTech,” “InsureTech” and “RegTech,” and of course, crypto and blockchain.

“I think a lot of people hear the buzzword and silo it,” said Tania Ziegler, CCAF’s Lead in Global Alternative Finance Benchmarking, about the term crypto. “But we’ve got crypto asset exchanges, market provisioning, digital custody and consensus services – so that’s effectively four different overarching verticles where a crypto could live.”

Even so, some in crypto are about as keen on being dumped in the fintech bucket as they are about dealing with increasing regulatory scrutiny. Crypto OGs tend to dislike this kind of encroachment because they see it as antithetical to the purpose of Bitcoin – that is, to provide an electronic cash system based on privacy and disintermediation.

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