In From Hoodies to Suits: Innovating Digital Assets for Traditional Finance, leading finance innovator Annelise Osborne bridges the gap between the “hoodies” who invented the technology behind digital assets and the “suits” who run traditional financial markets, in an entertaining and insightful guide for implementing digital assets in an institutional environment.
You’ll discover the possibilities unlocked by new technological advancements, including alternative investments, new marketplaces, interoperability between counterparties, and even improved forms of diversification. You’ll also find: - Discussions of why the adoption of digital assets is so critical for the future of finance and the ways the industry’s largest players are implementing its technologies and concepts now - Explorations of what we can learn from some of the crypto industry’s most infamous and well-known wins and losses, including the collapse of FTX - Strategies for implementing institutional digital assets to realize opportunities in private markets, funds, debt, repo, alternative assets and back office transactions in this evolving and dynamic financial environment
A fascinating new take on the future of finance, From Hoodies to Suits is a must-read guide for aspiring and practicing finance professionals, technology developers, fintech participants, and anyone else with an interest in the intersection of finance and technology.
Table of Contents
Acknowledgments xv
Disclaimer xvii
Introduction xix
1 Blockchain Is Not Bitcoin 1
When Bitcoin Stole Blockchain’s Thunder 2
What Is Blockchain? 5
What Are Digital Assets? 5
Enter Ethereum 6
Consensus and Technical Terms 7
What Is Blockchain to Finance? 8
Public, Private, and Permissioned Blockchains 11
What Does This Have to Do with Finance? 12
Avoiding Kodak Moments 13
2 The House That Crypto Built 15
What Are Cryptocurrencies (and Why Should You Care?) 16
A Stable Crypto 23
Crypto Exchanges: From a Single Peer- to- Peer Trade to the NYSE 24
What’s in Your Wallet? 28
Isn’t Crypto Really Just for Embezzling? 29
The Birth and Growth of Decentralized Finance 30
DeFi Is the Future of Finance 31
Plenty of Interest: CeFi/DeFi Lending and Staking 33
Crypto Incentives 36
DeFi Derivatives 36
3 Crypto as a Proof of Concept for Traditional Finance’s Capital Markets 39
What Traditional Finance Can Learn from Crypto 41
Changing How Payments Are Made 42
Shifts in Funding 44
Expanding the World of Lending 47
Non-Fungible Tokens 49
Security and Bond Registration 51
Improved Governance Rights 52
Accessible Royalty Payments 53
Novel Utility Benefits 55
4 What FTX, Hubris, and Crypto’s Other Mistakes Can Teach Traditional Finance 57
LUNA/Terra: “LUNAtic” Millionaires Lose It All 62
Crypto Wasn’t the Start of Algorithmic Disaster 65
Libra/Diem: Facebook’s Stablecoin Fail Sheds Light on Regulation 66
Dogecoin: A Billionaire’s Hubris Draws Hot Water 68
Hacking Shouldn’t Be the Headline (Yet It Is) 68
Wormhole’s Security Flaw Highlights Problems with Bridges 70
Three Arrows Capital: Setting off a Contagion 71
What to Learn from Crypto’s Initial Blunders 72
5 Institutional Digital Assets: Securities, Only Better 75
Institutional Digital Assets Matter Now More Than Ever 76
Key Benefits to Institutional Digital Assets 77
Smart Securities: Programmable and Self- Executing 79
Built- In Security 81
Faster, Less Expensive Settlements 81
Lower Counterparty Risk 82
Potential Liquidity and Transferability 83
Standards in Digital Assets 84
Tokenization 85
Impediments to Tokenization Adoption 97
Prepare for the Upgrade 100
6 Incremental Wins in Wall Street’s Pre- Season 103
The New Age of Digital Assets 104
Institutional Building Blocks 105
’40 Act Funds 106
Tokenizing Private Equity 109
Fixed Income 112
Repo and Securities Lending 115
Stablecoins 116
Custody 118
Foreign Exchange 121
Carbon Credit Market 121
Other Active Players 122
7 How Tomorrow’s Investors Will Expect Change 125
Why Do Generational Shifts Matter to Finance? 127
The Great Wealth Transfer Will Change Finance 128
The New Pig in the Python 128
Millennials 132
Generation Z 134
Generation Alpha 136
How the New Workforce Affects the Economy 137
The Evolution of Finance Continues into the 21st Century 138
Generational Shifts in Financial Information 139
8 The Building Blocks of Securities 143
What Is a Security? 145
What Is a Commodity? 145
What about Debt Instruments: Loans? 147
What about Bonds? 148
What Does This Mean for Tokenized Products? 148
9 Here Come the Regulators 151
Setting the Stage 152
A Word from the Experts 155
10 Don’t Be Afraid of Change 169
Digital Assets Are Here to Stay 170
The Age of Disruption 173
11 Finance’s Imminent Upgrade 177
Where Finance Stands Today 178
Finance of Tomorrow: Emerging Trends 179
Eight Emerging Trends of Financial Markets 180
Five Business Shifts from Emerging Trends 190
Afterword 195
Notes 197
Index 241
