Scholars' Insight

Whispers of Progress: Cracking the Code of Future Finance – From Global Turbulence to Decentralized Symphony

Narrated by Elvira Sojli
Edited by Erfan Efendi
Summary. Elvira Sojli's insights into the cryptocurrency market's turbulence and the future of decentralized finance highlight the impact of digitalization on financial ecosystems. She foresees consolidation in the crypto market but warns of diminishing currency value without sustainable models. Potential research areas include regulatory impacts on cryptocurrencies and blockchain's role in financial transparency. Additionally, digitizing shareholder registers and real estate transactions offers democratization and research opportunities in corporate governance and housing affordability. These advancements signify transformative potential in reshaping traditional financial systems through digital assets and distributed ledger technology.
As the Associate Professor of the School of Banking and Finance at UNSW Business and President of the Finance Research Network, Elvira Sojli stands at the forefront of academic discourse in finance. With a keen eye on emerging trends and a dedication to advancing financial knowledge, Professor Sojli delves into the captivating domain of decentralized finance (DeFi) and its implications for the future of international finance. In her contemplation of the evolving landscape, she offers compelling perspectives on the intersection of DeFi with blockchain technology and the dynamic trends of cryptocurrencies. Notably, her observations on the recent turbulence within cryptocurrency markets shed light on the broader trends impacting financial ecosystems. Highlighting the significant downturn, with values plummeting by almost 50 percent year-to-date (2022), she notes that this depreciation is not unique to cryptocurrencies, albeit it is more pronounced in this market. She explains that the current state of the crypto markets is closely following what is happening in the equity market, where the S&P500 has lost 14 per cent in the year-to-date (2022), with both being affected by increasing interest rates globally and uncertainty regarding future interest rate changes. This phenomenon prompts investors to seek safer assets, leading to a phenomenon known as flight to safety/quality. However, she cautioned that a market sustained solely by new capital influx, without corresponding increases in fundamental value, is susceptible to losing momentum. As fewer new participants enter the market, its sustainability becomes increasingly precarious, especially amidst rising costs of money and heightened market uncertainty.
Elvira Sojli, who occasionally visits international seminars hosted by the Faculty of Economics and Business at UNISMA Malang as a keynote speaker, envisions that while the current downturn in the cryptocurrency market may persist for some time, the ongoing process of digitalization will continue unabated. She foresees a trend towards greater consolidation within the crypto market, alongside a shift towards digital currencies and centralized digital ledgers for various supply chains and investment assets. However, she cautions that the value of cryptocurrencies as a currency may diminish unless they can demonstrate a sustainable business model with tangible returns.
In considering potential areas for novel study, exploring the impact of regulatory frameworks on the evolution of cryptocurrencies, particularly in the context of sustainable business practices, could provide valuable insights into the future dynamics of the digital currency market. Additionally, investigating the role of blockchain technology in enhancing transparency and accountability within decentralized financial systems may offer innovative solutions to address challenges and opportunities in the evolving landscape of international finance.
Furthermore, continuing her analysis, there are two significant advancements that she anticipate will be highly beneficial moving forward are the digitization of shareholder registers and the digitization of real estate transactions and assets. The digitization of shareholder registers involves creating digital lists of company shareholders, regularly updated to reflect ownership changes. This enables greater transparency in understanding who holds shares in a company, empowering market participants and owners to know exactly with whom they are interacting. Additionally, this innovation allows for more timely and comprehensive insights into investment portfolios, such as pension funds, without relying on delayed disclosures.
The second disruptive advancement pertains to real estate, where companies are exploring the digitization of transactions and assets, akin to how shares of companies are divided. This initiative allows for fractional ownership of real estate, enabling younger generations to participate in the housing market without the need for substantial initial investments. Even with modest funds, individuals can enter the market, benefiting from potential price increases and leveraging their investments over time to eventually achieve homeownership. These innovations leverage digital assets and the pioneering work of Bitcoin and distributed ledger technology, offering exciting possibilities for democratizing access to financial markets and real estate investment.
In conclusion, these advancements in digitizing shareholder registers and real estate transactions offer exciting possibilities for democratizing access to financial markets and real estate investment. However, they also open avenues for novel research. For instance, exploring the impact of digitized shareholder registers on corporate governance practices and shareholder activism could shed light on how transparency influences decision-making processes within companies. Similarly, investigating the implications of fractional ownership of real estate on market dynamics and wealth distribution could provide valuable insights into addressing housing affordability issues and promoting inclusive economic growth. By delving into these areas, researchers can contribute to a deeper understanding of the transformative potential of digital assets and distributed ledger technology in reshaping traditional financial and real estate systems.
Scholars' Insight, a segment in Jema: Jurnal Ilmiah Bidang Akuntansi dan Manajemen from the Faculty of Economics and Business, University of Islam Malang, offers innovative research ideas from global scholars. It enriches insights in accounting and management, sharing collaborative findings and best practices. Readers gain inspiration for further research and a deeper understanding of current developments, fostering academic networks and cross-institutional collaborations.

An Associate Professor of Finance and Associate Dean (Equity, Diversity and Inclusion) in the School of Banking and Finance in UNSW Business School and the president of FIRN (Financial Research Network), is passionate about understanding how women contribute to innovation and how financial dynamics differ globally. She previously worked at Erasmus University, where she was recognized as a Marie Curie fellow and a Duisenberg School of Finance research fellow. With a PhD from Warwick Business School, University of Warwick, Professor Sojli is deeply committed to advancing knowledge in finance and economics.
In the dynamic academic milieu of the Faculty of Economics and Business at Universitas Islam Malang, He fulfills dual roles as an English Lecturer and the Director of the International Development Division, shaping global experiences for students and faculty. Simultaneously, He is the Co-Founder and CEO of Mentor Muda Malang, dedicated to fostering English proficiency and leadership skills in youth. With roots as a Language Lecturer at Prince of Songkla University, Phuket Campus, Thailand, He guides students and advocates for internationalization. Additionally, His experience as a translator, proofreader, and journal editor enriches His multifaceted contributions. Eager to connect and explore collaborative opportunities for impactful mentorship initiatives.