#489
Giving While Living
Published:
May 22, 2023
Author:
Sarah Parsons Wolter
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Trillions of dollars in wealth are set to cascade over the coming decade from 73m baby boomers, the youngest of whom will turn 60 this year. But while the greatest intergenerational wealth transfer in US history is in motion, only the most wealthy heirs will be on a path to be financially prepared to retire. High net worth boomers constitute only 1.5% of total householders, but will make up 42% of the volume of expected transfers through 2045. And the inherited spoils are set to be distributed just as unevenly as wealth and income today, permissible in part due to the U.S tax code.
The notion of “intergenerational unfairness” has made some headlines this week with governments increasingly looking at policies and programs to narrow some of the economic disparities with the wealth transfer in motion. Connecticut’s Baby Bonds program, for instance, pledges a $600m plan to set up $3,200 as deposits into baby trust funds, to be invested over the course of their early adulthood. In recent years, new financial technologies have also emerged to close this gap. From mobile payment technologies giving first-time access to basic financial services, to new credit systems that underwrite previously overlooked borrowers.
Against cooler winds today, baby boomers have been some of the greatest beneficiaries of the last decade of surging home values and price growth. Until the wealth transfer begins in earnest, we can only guess which Boomer will be driving the sales at the fine art auctions in New York this week.
Portfolio News
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Empowering advertisers: Pemo improves its corporate cards acceptance - Holders of the Pemo cards can now seamlessly make payments to popular services such as Google AdWords, Microsoft Azure, Meta and Linkedin. Additionally, the Pemo pre-funded cards facilitate payments on a wide range of car rental sites, hotel chains and e-Commerce sites. Pemo enables data-driven marketing teams to gain real-time visibility and exercise control over their advertising spend. This, in turn, can empower them to create and deliver exceptional campaigns and achieve superior outcomes. Read more
Lido launches v2 and releases staked Ethereum for withdrawals - Market-leading liquid staking platform Lido has enabled staked ETH withdrawals. The move came as Lido launched the V2 upgrade live to mainnet on May 15. As the most important upgrade to the Lido protocol to date, Lido V2 significantly improves the Ethereum staking experience whilst pushing the Lido protocol further down the road towards increased protocol decentralization. Read more
Maker launches Spark lend protocol - To enhance control and encourage the adoption of Dai, Maker launched Spark Lend, its proprietary downstream lending protocol. This innovative protocol capitalizes on Maker's unique set of tools to effectively manage the supply of Dai and maintain a stable borrowing rate, which currently stands just above 1%. Read more
Giving While Living
The greatest wealth transfer in history is here, with familiar (rich) winners - An intergenerational transfer of wealth is in motion in America — and it will dwarf any of the past. Of the 73m baby boomers, the youngest are turning 60, the oldest are nearing 80, and are now beginning to die in larger numbers. Of the $84t projected to be passed down from older Americans to millennial and Gen X heirs through 2045, $16t will be transferred within the next decade. Read more
Connecticut’s $600m plan to narrow wealth gap: give kids trust funds - A once-radical proposal to narrow the vast racial wealth gap and other economic disparities is poised to achieve a key milestone in the US: actual funding to put programs in place. Connecticut Governor Ned Lamont and fellow Democrats in the legislature are about to announce a 12-year, $600m deal to launch a baby bonds program for newborns starting in July. Read more
Industry News
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Paris is trying to steal the UK’s fintech crown - A growing number of startups are setting up in the city as the French government pushes to be at the forefront of Europe’s financial technology sector. Read more
Bank of America launches fintech accelerator program - The six-month program provides mentorship, networking opportunities and access to potential investors to Black, Hispanic-Latino, Native American and other entrepreneurs from underrepresented communities. The bank is offering the program, called Breakthrough Lab, at no cost. Participants are not expected or required to exchange equity with the bank, the firm said. Read more
G-7 finance ministers discuss crypto regulation Ahead of Japan summit next week - The Group of Seven (G-7) intergovernmental political forum has signaled its commitment to implementing the Financial Stability Board's (FSB) forthcoming norms for regulating crypto assets and the International Monetary Fund's (IMF) recommendations on central bank digital currencies. Read more
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Buffett-backed Nubank reports record revenue on steady user growth - Brazil's Nubank on Monday reported record revenue for the first-quarter as the digital bank benefited from steady growth in users and higher average revenue per customer. Warren Buffett-backed Nubank has so far been insulated from the downturn in the global banking sector as consumers in its key domestic Latin American market continue to gravitate towards its credit cards and personal loans. Read more
Stripe expands access to its crypto onramp with a new hosted option - Web3 companies can now direct customers to a Stripe-hosted onramp to buy cryptocurrencies. Both embedded and Stripe-hosted onramps are now available to any interested Stripe user. The embeddable onramp is helpful for Web3 companies that want to fully customize the branding and customer experience, while the Stripe-hosted option provides an even easier way for users to get started. Read more
US Chamber of Commerce sides with Coinbase in clash with SEC - The U.S. Chamber of Commerce, one of the country's most influential business advocacy groups, is taking up the banner of digital asset critics of U.S. regulation and blasting the Securities and Exchange Commission's approach to ether, Coinbase, Kraken, and the broader digital asset industry. Read more
Select Financings
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Jia - Los Angeles based blockchain SME financing firm for emerging markets raised $4.3m in Seed funding led by TCG Crypto. Read more
Mitiga Solutions - Barcelona based climate risk modeling startup raised $14.4m in Series A funding led by Kibo Ventures. Read more
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