Can you provide a decision rule that distinguishes financial services from financial engineering?
I do not feel as confident as you seem that the group of things called “crypto” will not be useful for financial services.
I do not feel as confident as you seem that the group of things called “crypto” will not be useful for financial services.
To give you a crypto example of this, Aave is financial engineering, because it allows users to make a bet that they can execute high-volume short-duration trades that yield more than Aave lending fees.
In terms of what is financial services, my definition is: Any action taken that allows capital holders to better deploy their capital into the real (read: goods and services) economy. Again, no prefect source, but [3] [4] [5]
Again the key nuance here is financial services primarily focus on supporting the real economy, while financial engineering is primarily focused on risk/reward
And to be frank, I would absolutely love it if cryptocurrencies supported the real economy in literally any way shape or form. I would get "BTC4Life" tattooed on my forehead, I would dedicate my life to working for the innovators in the space, but unless you've got some secret, I don't think you can give me an example of literally anything cryptocurrency does to support the real economy that a centralized solution couldn't also do.
[0] https://en.wikipedia.org/wiki/Financial_engineering
[1] https://www.investopedia.com/terms/f/financialengineering.as....
[2] https://www.iaqf.org/what-is-financial-engineering
[3] https://www.imf.org/external/pubs/ft/fandd/2011/03/basics.ht...
[4] https://www.cisa.gov/financial-services-sector
[5] https://www.law.cornell.edu/definitions/uscode.php?width=840...
The nuance makes sense on its face. Although I don’t trust my own judgement of what impacts the real economy and what is just shuffling of decomposed elements of risk and reward.