expert opinion

PART II: Interview with Kim Y. Muehl about Digital Assets

Former Head of Research & Business Development Europe, Kim Y. Mühl is a partner at iVE.ONE for consulting in digital assets. Based on his background and expertise in the field, he has recently published the book “Bionic Wealth”. This time, we took the opportunity to interview him to get his perspective on the evolution and inputs of Blockchain technology in the financial sector.
Blockchain and DeFi are two of the key trends and technologies of our time. In which challenge do they bring solutions?
Blockchain has solved some of the most severe issues of our current financial and economic system, “simply” adding a layer of transparency and trust between interacting parties. And while it may not completely make intermediaries obsolete – until the German law is adjusted to blockchain and DeFi, we will still require intermediaries such as notaries or central banks – it makes a variety of the services provided by intermediaries either much cheaper or unnecessary. Furthermore, blockchain-based tokenization helps in the democratization of the financial world – commonly referred to as decentralized finance: It simplifies cross-border crowdfunding, -lending, -donating and -investing as well as P2P-transactions and results in a major powershift from banks to end users.
Despite the benefits of technology, what do you think are the reasons for those who do not want (or dare) to integrate digital innovation in their business? What would you say to them?
"There are several reasons that come to mind: Digital innovation is typically linked to automation and/or data processing. Both are often considered as a threat to one’s personal existence."
On the one hand, many people will lose their jobs. Although a job-related activity may remain necessary - its exercise by a human being is no longer meaningful. On the other hand, the various new jobs created by the digital transformation often cannot be simply taken over by untrained personnel (both blue collar and white-collar workers). Hence, digital change will only work on a broad scale when and if we adjust our educational system and introduce more humane financial support systems such as unconditional basic income – that in turn is believed by many academics to spark innovation and change.
Concerning the question why blockchain in specific is being feared or neglected by many, there are several potential answers. First, blockchain, DeFi and tokenizationare simply too complicated for most people to fully understand. Second, blockchain solutions require access to the internet as well as digital devices – which is still not a given even in Germany – hence limiting access to such services. Third, blockchain(and especially proof-of-work blockchain) is associated with a heavy energy consumption, resulting in a negative (“unsustainable”) image. Fourth, there have been many reports on fraud and scams related to blockchain solutions – and especially Initial Coin Offerings and other non-regulated tokens. This has led to the common believe that crypto tokens and currencies are high risk investments – neglecting the fact that there is a difference between purely blockchain-based assets (i.e. bitcoin or dogecoin) and real asset-backed tokens such as NFT or security token. And finally, but this only my personal gut feeling, many intermediaries feel threatened by blockchain, tokenization and DeFi. Money is perhaps the single most powerful leverage in the world. And they feel, they can’t afford to lose this.
Based on your expertise, how will the digital finance industry change in the next 5 years?
In the years to come, the financial industry will experience a major shift towards digital solutions.  
  1. To this date, many banks are frantically searching for new uses for their branches – or closing them altogether. Most customers already demand omni-channel solutions and for some, the smartphone completely replaces the house bank. In this regard, solutions such as m-banking, m-payment and m-brokerage will further increase in popularity.
  2. Digital Assets will be increasingly accepted as serious investment instruments. This will put pressure traditional stock exchanges and market data providers to lower their fees, to remain competitive.
  3. Web 3.0 and will change the way we deliver, analyze, and organize information. By using digital technologies, IoT, semantic metadata and decentralized networks, we are reaching the next level of the Internet. This will lead to new business models – and as such new investment opportunities.
  4. Sustainable finance will become an interesting and lucrative alternative to traditional finance. Not only will we see more ESG-funds /ETFs, but I am convinced that more and more financial service providers (such as robo advisors, family offices and banks) will offer their clients custom ESG solutions.
  5. With reduced costs for (cloud) data processing, more and more portfolio managers will give up on the idea of “beating the market” with their limited perspective and limited capacity to process information and place their trust in Big Data, Ai and evolutionary algorithms instead.
  6. Bionic solutions such as Newcomb-Benford’s Law will help detect fraud and fight deep fakes – that could otherwise potentially have a calamity impact on businesses and stock markets.
  7. Both blockchain and encryption are bionic principles. I am convinced that the more we study how ecosystems and living beings’ function, the more ideas we will have about how we can organize ourselves and our data in decentralized systems, as well as how we can efficiently program and encrypt data. Think about it! Or read “bionic wealth” to find out more.
In your perspective, as a digital expert and partner of iVE.ONE, how does iVE.ONE meet the needs of the market? 
I believe that tokenization – both for security token and NFT as well as for coins and utility token - caters to a wide range of market needs.  
From an investors point of view, they allow for additional investment opportunities and fractional investments/ownership of otherwise illiquid assets such as real estate.
From an issuers point of view, tokenization is a wonderful financial vehicle for growth funding. In fact, it is an empowering and disruptive funding tool, as it offers an alternative to taking on debt from banks or offering equity to VCs.

In this regard, iVE.ONE is one of the few players in the market that offer both blockchain infrastructure as well as tokenization to both, professional and institutional clients. Especially the latter – which functions in a highly regulated environment – is in dire need of solutions that fit their needs. In contrast to many tokenization providers out there, that focus on helping startups receive funds via unregulated ICOs without checking whether the companies and its assets are legit, iVE.ONE offers curated and regulated solutions.
About Kim Y. Mühl

Kim Y. Mühl is Germany's first ambassador for purposeful work and meaningful digitization. The former Head of Research & Business Development Europe of a globally operating FinTech-provider is actively involved with the digital transformation and shares his expertise as an author, consultant, and coach. In 2020/21 he published a series of meta-studies on the digital (r)evolution in the German financial sector.
Read PART I: Interview with Kim Y. Muehl about Bionic Wealth