The Center for Digital Finance and Technologies within the School of Engineering and Applied Sciences at Columbia University aims at addressing the societal needs of Fintech companies, and understand the promises of emerging financial innovation. The existing financial system suffers from bottlenecks in efficiency, accessibility, and transparency. Households and businesses do not have cheap financing options, transferring cash or other securities remains costly, and trading assets is expensive. The operating activities of banks and wealth managers are not fully transparent to their clients, and even to regulators. Accessibility to financial services is limited, and a non-negligible fraction of the world population remains unbanked. The digital financial revolution we are experiencing aims at addressing these shortcomings. However, the pros and cons of these financial innovations are not yet understood, and require answering fundamental questions such as: Is the technology ready to support algorithmic investment and fast payment systems? How can financial services be designed and made accessible to underserved communities? How should Fintech companies, crypto tokens, and data sharing, be regulated?
A game changer in the digitalization of finance is blockchain technology. It democratizes finance, revolutionizes how we transact, transfer ownership of assets, and verify transactions. One of the most prominent applications built on blockchain is DeFi. DeFi utilizes open-source smart contracts to provide decentralized borrowing, lending, swapping, and insurance services, which replace the traditional centralized financial intermediaries. The following questions yet remain to be answered. Is the current layered structure of blockchain scalable and sustainable? Is DeFi the most appropriate infrastructure to support the future of finance?
The Center leverages multi-disciplinary expertise at Columbia in diverse domains such as computer science, engineering, data science, finance, and economics, to answer these questions.