From Hoodies to Suits
Innovating Digital Assets for Traditional Finance
1. Auflage Juni 2024
272 Seiten, Hardcover
Sachbuch
ISBN:
978-1-394-23182-9
John Wiley & Sons
Learn how digital asset technologies can be applied to the regulated, traditional finance industry for improved performance and returns
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.
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
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
"From Hoodies to Suits provides a front row seat to understanding the significant changes about to happen in financial services infrastructure and the applications that will reshape how value is transferred, settled, and stored. Tokenization of financial assets will increase efficiencies and reduce costs across an asset's lifecycle, improve the efficient allocation of capital, optimize global supply chains, catalyze a new generation of software-as-a-service companies, and ultimately drive mainstream adoption. Benefits will be widespread, but ultimately result in more transparency and lower costs for borrowers and investors."
--Anthony Moro, CEO Provenance Blockchain Foundation
"From Hoodies to Suits takes a novel approach detailing the benefits and innovation of blockchain technology applied to the world of finance and investment."
--Mike Cagney, Co-Founder and CEO of Figure Technologies; Co-Founder and former CEO of SOFI
"In this groundbreaking book, Annelise Osborne takes us on a journey from the tech-savvy world of 'Hoodies' to the boardrooms of 'Suits,' illuminating the remarkable transformation of the digital asset industry. As blockchain technology emerged as a disruptor, challenging traditional finance, Osborne provides a comprehensive guide to the intersection of innovation and established financial markets."
--Perianne Boring, Founder and CEO, Chamber of Digital Commerce
"Now more than ever, books like From Hoodies to Suits are needed to educate readers on the promise of blockchain and crypto. It's an insightful, digestible, entertaining read.
--Katherine Kirkpatrick, Chief Legal Officer, CBOE Digital
"From Hoodies to Suits is an indispensable guide to blockchain technology and the finance industry. Annelise Osborne offers practical insights beyond Bitcoin to the burgeoning world of tokenization and institutional DeFi. With a critical examination of high-profile failures in the crypto space, she delineates key lessons for traditional finance, discusses the regulatory landscape, and underscores the generational shifts set to transform the industry. It's an essential read for anyone seeking to understand the future of finance and the disruptive influence of digital assets and blockchain innovation."
--Richard Walker, Senior Partner, Bain & Company
"Amust read for all financial market participants, ranging from the crypto skeptics to those who understand something is happening in markets related to blockchain and crypto, but don't know quite where to start. Annelise Osborne removes the jargon and provides a common sense and understandable framework of the transformation already underway in complex markets through complex technologies. With tangible examples and a clever sense of humor, she ties the past, present and future of market functioning driven by blockchain technology."
--Charles Mount, Chief DeFi Officer, S&P Global
"Annelise Osborne succeeds brilliantly at the difficult task of explaining the complex origins and use cases of crypto finance while creating a captivating, fun to read book. This book breathes life into personalities and palpable excitement of the formation of a new industry. Bravo."
--Edward A. Glickman, Executive Chairman USA, AIP Asset Management
"From Hoodies to Suits skillfully bridges the gap between traditional finance and the power of blockchain technology. Annelise Osborne presents a compelling narrative, demystifying digital assets and their transformative role in the future of financial markets. An essential read for anyone in finance."
--Jennifer Warren, Former Head of Markets Digital Strategy, Barclays
"The author brilliantly traces the evolution of blockchain from its origins to its pivotal role in reshaping traditional finance. What sets this book apart is its ability to connect the dots seamlessly, skillfully illuminating the digital tipping points that traditional finance is approaching, providing readers with a roadmap to navigate the changing landscape. Whether you're a finance professional or technical architect, this must-read provides a clear understanding of how digital assets are transforming the traditional financial landscape, inspiring a vision for the future where innovation drives true value creation."
--Lora Lindsey, Principal, Value Innovation & GTM Strategy, Amazon Web Services (AWS), and former Goldman Sachs investment banker (both a hoodie and a suit)
"An entertaining guide through the inevitable tech upgrade advancing the world of finance."
--Gregg Bell, Head of Growth, Binance.us
"From Hoodies to Suits is an important, fascinating, and fun read for everyone involved with the financial markets. It is a digestible dive into how this innovative technology provides opportunities to develop new asset classes and market infrastructure. Annelise Osborne does a wonderful job of providing unique insight and helpful guidance for those interested in how blockchain tech can evolve finance and institutional investing.
--Kari Larsen, Partner and Co-Head of the Digital Works Group at Willkie Farr & Gallagher LLP
"Annelise brings her years of first-hand experience to this effort and the end result is a must-read for both those not familiar with blockchain as well as those with experience and looking to dive deeper into understanding the benefits of fintech."
--Rayne Steinberg, CEO, Co-Founder Arca; former Co-Founder, WisdomTree Asset Management
"Annelise Osborne is able to explain a complex topic making it understandable to all, with entertaining stories weaved in. I highly recommend this book for anyone working in traditional finance to grasp the potential of the technological upgrade taking place."
--Marcus Grubb - ex SVP State Street Digital, Banker, Fintech and Gold Entrepreneur
"A must read for every head of trading or investment in a language they will understand and written by someone they can relate to. Look for other copies on the morning train."
--James Godfrey, Managing Partner, Secure Digital Markets
"From Hoodies to Suits demonstrates the exact transition the digital assets industry is seeing in near real-time. The compelling storytelling coupled with key and lesser-known events that have gotten the market to where it is today makes this a staple for financial professionals as tokenization compounds and positions itself as the next major technological overhaul to the capital markets. Annelise does a splendid job covering all angles through her unique lens as both a TradFi player and digital assets pioneer."
--Peter Gaffney, Head of Research Security Token Advisors
"On the eve of the US's financial announcement approving a spot ETF, we are on the precipice of a cultural shift that will significantly impact finance. This shift characterized by fringe technological wizards has now moved mainstream into traditional financial institutions with their risk profiles and business know-how. Annelise Osborne has captured this tectonic shift in her entertaining and impactful book: From Hoodies to Suits. A must read for the neophyte to the professional--you won't be disappointed. I couldn't put it down!"
--Lynne Maylor, Co-Founder, Women in Digital Assets Forum (WIDAF); Ambassador, GBBC; Chair, Boston Blockchain Association
"For finance and technology executives, this book is not just recommended; it is essential reading. Osborne accelerates the perspective of the landscape, empowering decision-makers to make intelligent and well-informed choices. Hoodies to Suits transcends being a mere book; it becomes a strategic tool for those steering the helm of finance and technology, equipping them with the knowledge to navigate the dynamic shifts in the industry."
--Nitin Gaur, Global Head Digital Assets, State Street
--Anthony Moro, CEO Provenance Blockchain Foundation
"From Hoodies to Suits takes a novel approach detailing the benefits and innovation of blockchain technology applied to the world of finance and investment."
--Mike Cagney, Co-Founder and CEO of Figure Technologies; Co-Founder and former CEO of SOFI
"In this groundbreaking book, Annelise Osborne takes us on a journey from the tech-savvy world of 'Hoodies' to the boardrooms of 'Suits,' illuminating the remarkable transformation of the digital asset industry. As blockchain technology emerged as a disruptor, challenging traditional finance, Osborne provides a comprehensive guide to the intersection of innovation and established financial markets."
--Perianne Boring, Founder and CEO, Chamber of Digital Commerce
"Now more than ever, books like From Hoodies to Suits are needed to educate readers on the promise of blockchain and crypto. It's an insightful, digestible, entertaining read.
--Katherine Kirkpatrick, Chief Legal Officer, CBOE Digital
"From Hoodies to Suits is an indispensable guide to blockchain technology and the finance industry. Annelise Osborne offers practical insights beyond Bitcoin to the burgeoning world of tokenization and institutional DeFi. With a critical examination of high-profile failures in the crypto space, she delineates key lessons for traditional finance, discusses the regulatory landscape, and underscores the generational shifts set to transform the industry. It's an essential read for anyone seeking to understand the future of finance and the disruptive influence of digital assets and blockchain innovation."
--Richard Walker, Senior Partner, Bain & Company
"Amust read for all financial market participants, ranging from the crypto skeptics to those who understand something is happening in markets related to blockchain and crypto, but don't know quite where to start. Annelise Osborne removes the jargon and provides a common sense and understandable framework of the transformation already underway in complex markets through complex technologies. With tangible examples and a clever sense of humor, she ties the past, present and future of market functioning driven by blockchain technology."
--Charles Mount, Chief DeFi Officer, S&P Global
"Annelise Osborne succeeds brilliantly at the difficult task of explaining the complex origins and use cases of crypto finance while creating a captivating, fun to read book. This book breathes life into personalities and palpable excitement of the formation of a new industry. Bravo."
--Edward A. Glickman, Executive Chairman USA, AIP Asset Management
"From Hoodies to Suits skillfully bridges the gap between traditional finance and the power of blockchain technology. Annelise Osborne presents a compelling narrative, demystifying digital assets and their transformative role in the future of financial markets. An essential read for anyone in finance."
--Jennifer Warren, Former Head of Markets Digital Strategy, Barclays
"The author brilliantly traces the evolution of blockchain from its origins to its pivotal role in reshaping traditional finance. What sets this book apart is its ability to connect the dots seamlessly, skillfully illuminating the digital tipping points that traditional finance is approaching, providing readers with a roadmap to navigate the changing landscape. Whether you're a finance professional or technical architect, this must-read provides a clear understanding of how digital assets are transforming the traditional financial landscape, inspiring a vision for the future where innovation drives true value creation."
--Lora Lindsey, Principal, Value Innovation & GTM Strategy, Amazon Web Services (AWS), and former Goldman Sachs investment banker (both a hoodie and a suit)
"An entertaining guide through the inevitable tech upgrade advancing the world of finance."
--Gregg Bell, Head of Growth, Binance.us
"From Hoodies to Suits is an important, fascinating, and fun read for everyone involved with the financial markets. It is a digestible dive into how this innovative technology provides opportunities to develop new asset classes and market infrastructure. Annelise Osborne does a wonderful job of providing unique insight and helpful guidance for those interested in how blockchain tech can evolve finance and institutional investing.
--Kari Larsen, Partner and Co-Head of the Digital Works Group at Willkie Farr & Gallagher LLP
"Annelise brings her years of first-hand experience to this effort and the end result is a must-read for both those not familiar with blockchain as well as those with experience and looking to dive deeper into understanding the benefits of fintech."
--Rayne Steinberg, CEO, Co-Founder Arca; former Co-Founder, WisdomTree Asset Management
"Annelise Osborne is able to explain a complex topic making it understandable to all, with entertaining stories weaved in. I highly recommend this book for anyone working in traditional finance to grasp the potential of the technological upgrade taking place."
--Marcus Grubb - ex SVP State Street Digital, Banker, Fintech and Gold Entrepreneur
"A must read for every head of trading or investment in a language they will understand and written by someone they can relate to. Look for other copies on the morning train."
--James Godfrey, Managing Partner, Secure Digital Markets
"From Hoodies to Suits demonstrates the exact transition the digital assets industry is seeing in near real-time. The compelling storytelling coupled with key and lesser-known events that have gotten the market to where it is today makes this a staple for financial professionals as tokenization compounds and positions itself as the next major technological overhaul to the capital markets. Annelise does a splendid job covering all angles through her unique lens as both a TradFi player and digital assets pioneer."
--Peter Gaffney, Head of Research Security Token Advisors
"On the eve of the US's financial announcement approving a spot ETF, we are on the precipice of a cultural shift that will significantly impact finance. This shift characterized by fringe technological wizards has now moved mainstream into traditional financial institutions with their risk profiles and business know-how. Annelise Osborne has captured this tectonic shift in her entertaining and impactful book: From Hoodies to Suits. A must read for the neophyte to the professional--you won't be disappointed. I couldn't put it down!"
--Lynne Maylor, Co-Founder, Women in Digital Assets Forum (WIDAF); Ambassador, GBBC; Chair, Boston Blockchain Association
"For finance and technology executives, this book is not just recommended; it is essential reading. Osborne accelerates the perspective of the landscape, empowering decision-makers to make intelligent and well-informed choices. Hoodies to Suits transcends being a mere book; it becomes a strategic tool for those steering the helm of finance and technology, equipping them with the knowledge to navigate the dynamic shifts in the industry."
--Nitin Gaur, Global Head Digital Assets, State Street
ANNELISE OSBORNE is a seasoned executive on Wall Street and within the digital asset ecosystem. After over 15 years in traditional finance, she moved to the tech startup world once she recognized the benefits of blockchain for traditional capital markets. Annelise is a thought leader that sits on company boards, is an angel investor, lectures at universities, and is a frequent speaker. She holds an MBA from Columbia Business School and a BA from the College of William & Mary. Annelise lives in Westport, CT with her three boys and rescue pups.
