MiB: Campbell Harvey on DeFi



This week, we speak with Duke University finance professor Campbell Harvey. Since 2014, his Fuqua School of Business courses have included “Innovation and Cryptoventures” and “Blockchain Business Models.” Dr. Harvey is also a research associate at NBER and a partner and senior adviser at Research Affiliates LLC, which oversees over $180 billion in client funds. He co-wrote the recent book “DeFi and the Future of Finance.”

Harvey explains how the costs of centralized financial transactions have not fallen in 150 years as the middlemen aka large financial institutions have all of the power and no incentive to reduce costs. Credit cards charge merchants about 3%, a fee that has been pretty standard for a century. DeFi presents an opportunity to lower financial transaction costs by removing the middleman.

He also explains why DeFi can be a solution for so many unbanked people around the world. Tokens that are backed by US dollars might be the future of banking globally. People in high inflation regions might abandon the local currency in favor of something more stable.

We discuss how he first began teaching students about Crypto, gifting then each $10 of Bitcoin at the start of the semester which they were supposed to return at the end of the term. The idea was to force the students to learn about coin wallets, crypto transactions, and virtual currencies. The students that forgot to return the bitcoin have been emailing Prof Harvey to return the $10 in BITC, only now it has grown to $4,000 in bitcoin; they donate the proceeds to the university’s endowment.

A list of his favorite books is here; A transcript of our conversation is available here Monday.

You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with Hubert Joly, former Chairman Chief Executive Officer of Best Buy.  He has been named a Top 100 CEOs by Harvard Business Review, top 30 CEOs by Barron’s top and 10 CEOs in the U.S. by Glassdoor. He is the author of a new book “The Heart of Business: Leadership Principles for the Next Era of Capitalism.”



DeFi and the Future of Finance by Campbell R. Harvey, Ashwin Ramachandran, Joey Santoro

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