Although a self-confessed “product person at heart”, Provenance Blockchain Foundation’s CEO Morgan McKenney says the emergence of digital assets and blockchains have allowed the industry to focus its attention on the underlying infrastructure supporting those products.
Financial services still “rely on all these legacy systems where everybody is reconciling the state of truth”, says Ms McKenney. “There is a lot of time between when a transaction happens and when it’s actually settled, meaning when it’s finalised, and all of that time creates a lot of uncertainty
and costs.”
She argues that rather than the “system of intermediated trust” the industry relies on today, a decentralised platform allows customers to not only “own the asset, but control the asset”, allowing parties to transact without having to know anything about each other “beyond the fact that you have the digital asset that I want. That’s incredibly liberating — it’s very powerful,” she adds. “It’s disruptive to how financial systems work today and it will eventually materially lower the cost to serve in financial services. It will really open up access.”
Career history: Morgan McKenney
- 2022 Provenance Blockchain Foundation, CEO
- 2020 Citi, chief operating officer, global consumer banking
- 2016 Citi, head of core cash management for Asia-Pacific and Citi Innovation Lab, Singapore
- 2012 Citi, global head of cross-border payments, treasury and trade solutions
Ms McKenney realised the potential of blockchains and distributed finance during her almost 20 years at Citi. She held a range of senior executive operating roles globally, most recently as chief operating officer for global consumer banking after four years running Citi’s Innovation Lab in Singapore. While at the bank, she successfully implemented blockchain projects with Nasdaq, Alibaba and Ant Financial.
Nasdaq was trying to set up a private market securities business on the blockchain and, as part of this equation, you need natively born digital money, she says.
“Citi worked on integrating payment capability based on money in a bank account and making that seamlessly available on the blockchain,” explains Ms McKenney.
“The idea was as other digital asset ecosystems spring up, you’re going to want to pay in fiat or receive fiat, but it needs to be highly and deeply integrated with blockchain.”
By 2020, Ms McKenney was in Asia working with Alibaba on an instant business-to-business payments network on blockchain, which provided a “single source of truth” for the Chinese e-commerce giant’s high-value payments.
Following these projects, she took a sabbatical, going back to school to further investigate decentralised finance.
[decentralised platforms are] disruptive to how financial systems work today and will lower the cost to serve and financial services
“My view is we have so many more tools in the toolkit now to transform how financial services work at an infrastructure layer,” she adds.
“We think about digital platforms, and the world’s most valuable companies today are platforms. They bring together buyers and sellers like Amazon, but more importantly, they’re open innovation platforms … decentralised systems using blockchain are the next iteration of platforms for the world, they enable true open innovation of motivated participants.”
Ms McKenney joined the Provenance Blockchain Foundation as CEO in March 2022. The foundation supports the Provenance Blockchain, a public blockchain network designed and developed to support financial service industry needs by providing a ledger, registry and exchange across multiple financial assets and markets. It works with the USDF Consortium — a membership-based association of Federal Deposit Insurance Corporation-insured banks, which provides a bank-minted tokenised deposit and 24/7 payment rail on the Provenance Blockchain.
“As somebody who’s been in institutional finance for a very long time, [Provenance] was far ahead,” she says. “In terms of institutional adoption, we have almost 60 financial institutions participating in different ways on Provenance, whether they’re buying assets, selling assets, acting as a validator, or USDF Consortium participants etc.
“I would say we’re well past the proof-of-concept phase, which is exciting; we’ve had several use cases live in 2022.”
The foundation is now looking at new use cases for the public blockchain, such as infrastructure funding for roads, bridges, power plants, bankruptcy claims and retail store supply chains.
“[Infrastructure funding] is a $93tn market,” she says. “There’s a $20tn funding gap because only banks can afford to lend for these infrastructure projects. If you put it on blockchain, you can allow others to finance things, like pension funds and insurance companies, so you can build more roads and bridges.”
With bankruptcy claims, she says distressed assets are put on a blockchain to “provide trading liquidity options” for people who have “very different views of what a distressed asset is worth today, tomorrow and the next day, and that’s a big asset class”.
Retail supply chain receivables are another use case the foundation is working on. “An agreement to purchase from a retailer is put on a blockchain, meaning it’s immutable, it’s authentic, it’s signed by [the retailer], and that helps you finance the downstream suppliers,” says Ms McKenney, because other businesses can come in and buy that receivable, effectively meaning the retailer will pay them.
“It’s a way to bring in more credit and liquidity into the supply chain,” she adds.
