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The New Digital Era: Emerging Risks and Opportunities

In: The New Digital Era: Digitalisation, Emerging Risks and Opportunities

Author

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  • Rashmi Sharma

Abstract

Purpose:Blockchain technology has the potential of revolutionising finance in general and entrepreneurial finance in particular. As this area is hitherto uncharted, this chapter delineates its scope to the use of blockchain technology for providing strategic business funding. Blockchain technology started off by floating initial coin offering as a way of providing long-term funds to the startups. Since then, it has evolved quickly and has already spawned several iterations. One of its most prominent offshoots, security token offering has evolved into a distinct financing resource, with its own unique characteristics. Methodology:This chapter discusses the implications of this development for startups and new ventures. It focusses on the use of blockchain technology for innovations in the domain of entrepreneurial finance with the aim to document the emergence of cryptofinance as a viable source of funding for startups. For this purpose, a systematic literature review methodology has been undertaken. In order to provide a comprehensive view, various sources such as academic research papers, working papers and practice papers have been used for collating information. Practical implications:This chapter provides a brief overview of entrepreneurial finance and blockchain technology, illustrating their unique aspects. It proceeds to discuss the use of blockchain technology in finance in general and in entrepreneurial finance in particular. This discussion is followed by an extensive analysis of the evolution of cryptofinance as a funding source, enumerating various iterations and their implications. Conclusion:As the use of blockchain technology in entrepreneurial finance is still at the nascent stage, the regulatory paradigm is still evolving. The current work also looks at the development of legal framework for managing these innovations across different prominent markets. This chapter further delves into the likely future course of development for cryptofinance. It mainly focusses on the emergence of decentralised finance as a comprehensive ecosystem and smart contracts.

Suggested Citation

  • Rashmi Sharma, 2022. "The New Digital Era: Emerging Risks and Opportunities," Contemporary Studies in Economic and Financial Analysis, in: The New Digital Era: Digitalisation, Emerging Risks and Opportunities, volume 109, pages 151-167, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:csefzz:s1569-37592022000109a010
    DOI: 10.1108/S1569-37592022000109A010
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    Cited by:

    1. Grosu, Veronica & Cosmulese, Cristina Gabriela & Socoliuc, Marian & Ciubotariu, Marius-Sorin & Mihaila, Svetlana, 2023. "Testing accountants' perceptions of the digitization of the profession and profiling the future professional," Technological Forecasting and Social Change, Elsevier, vol. 193(C).

    More about this item

    Keywords

    Entrepreneurial finance; blockchain; cryptofinance; initial coin offering; security token offering; legal framework; venture capital; G24; G28; K24;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • K24 - Law and Economics - - Regulation and Business Law - - - Cyber Law

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