Digital Finance

Digital Finance : Security Tokens and Unlocking the Real Potential of Blockchain

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In Digital Finance: Security Tokens and Unlocking the Real Potential Blockchain, readers will realize why security tokens are creating huge excitement in the financial industry. By combining the latest in technology and the potential for automated world-class investor protections, regulatory compliance and customer service, security tokens offer a plethora of benefits that will drive cost reductions, enhance flexibility and open up opportunities for new business models and revenue streams. Digital Finance thoroughly examines how this powerful technology can overhaul our current financial infrastructure in a way that will increase efficiency, transparency, and security.

Topics include:

How to think about investments in the digital space
How blockchain and distributed ledger technology are disrupting the financial industry
Security tokens and how they are the next major breakthrough for investing
How digital assets open new opportunities and provide cost savings benefits
How blockchain technology has created new, efficient ways of fund raising and investing
The ways tech companies are building a new, more interconnected financial network fabric
How multi-national corporations like IBM, Fidelity Investments and AXA are already deploying blockchain and tokenized solutions
Case studies, historical perspectives and latest trends that offer perception as to how this exciting new space will develop
How countries around the world are embracing this new phenomenon and how regulators are taking notice

How assets currently only available to select institutional investors could become marketed to the mainstream
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Product details

  • Hardback | 208 pages
  • New York, United States
  • English
  • 1. Auflage
  • 1119756308
  • 9781119756309

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Digital Finance: Security Tokens and Unlocking the Real Potential of Blockchain gives readers a fascinating and comprehensive look at how security tokens will be the next major milestone in the digital revolution. You'll learn about how these digitized forms of traditional ownership certificates will have momentous ramifications for mainstream assets like stocks, real estate, bonds, intellectual property, and derivatives.

Discover how security tokens offer capabilities, features, and innovations that are simply impossible with hard-copy certificates. Author Baxter Hines shows you how these riveting new digital tools combine world-class investor protections with supreme flexibility, exciting financial and technological professionals around the world.

The ideas presented in this book demonstrate how the digitization of assets will challenge and change the methods by which companies raise capital, opening up the process to a wider range of people and geographies. New investment ideas, many of which would have seemed impossible before, will arise.

Written in a straightforward and jargon-free way but lacking none of the rigor and data you'd expect to find in an industry-leading resource, Digital Finance explains exciting new digital developments in a way that anyone can understand. You'll learn a clear and concise framework for understanding security tokens and digital investments.

This book specifically discusses how the financial industry will be affected by the rapid growth of blockchain technologies and digital assets. With decades of experience in the financial industry, the author is uniquely placed to provide incisive commentary on the likely effects of the digital financial revolution.

Perfect for anyone interested in how digital assets like security tokens can and will impact the financial industry, Digital Finance belongs on the bookshelves of technology and finance enthusiasts and professionals around the world.
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Table of contents






Opening Remarks- The Big Picture

Disruption of the Investment Industry

Case Study: Carlsberg

Legacy Ways of Doing Business

Paper Securities & The New Alternative

Historical Perspective: The London Whale

Deceptive Phase vs Disruptive Phase

Part I: The Magic Ledger

Chapter 1. Blockchain Basics

What is Blockchain?

Foundational Elements of Blockchain



Processing & Communications

Computer Science




Digital Identity

Digital Wallets




Distributed Ledger Technology

Building a Blockchain

Characteristics of a Block

Linking a Blockchain Together

Case Study: A Simple Card Transaction

Creating a Blockchain Transaction

Tampering with a Blockchain

Smart Contracts


Case Study: AXA Plane Ticket Insurance

Characteristics and Benefits of Blockchain

What Differentiates One Blockchain Platform from Another?

Chapter 2. Fundamentals of a Security Token

Distinguishing the Types of Digital Assets

Payment Tokens

Utility Tokens

Security or Asset Tokens

How Security Tokens Came Along

Tokenizing a Security

Historical Perspective: Gold Certificates

Code is Law

Benefits of Tokenization

Chapter 3. What Types of Assets May Be Tokenized?


Case Study: Facebook's Libra

Asset Tokens

Case Study: Britain's Royal Mint

Case Study: St Regis Aspen Resort

Fixed Income, Equity and Funds Tokens

Case Study: IBM's Blockchain Accelerator

Case Study: The World Bank's Bond-i

Industry Trends: Alternative Financing with Security Tokens

Industry Trends: Unlocking Private Equity Fund Liquidity

Employee Stock Options

Case Study: Fidelity Investments Center for Applied Technology

Chapter 4. Security Tokens Will Massively Disrupt and Vastly Improve Markets

New Opportunities for Economic Growth

New Investment Classes

New Business Models

More Complex Products

Broader Audiences of Investors

New Investors

New Geographies

New Ways to Connect

More Efficient Capital Formation

Middlemen are Removed

Lower Costs of Maintaining A Security Over its Life Cycle

Better Governance Potential

Industry Trends: Lowering the Cost of Money Transfers

To Tokenize or Not to Tokenize?

Part II - Creating the Digital Wrapper

Chapter 5. Key Features of a Security Token



Know Your Customer (KYC) & Anti-Money Laundering (AML)

Accounting and Reporting

Safety Mechanisms

Chapter 6. The Security Token Ecosystem

Fintech Companies


Token Standards

Ethereum ERC Standards

Issuance Platforms

Advisory Services

Token Stack: Putting It All Together

Part III. Realizing the Potential of Security Tokens

Chapter 7. Regulation of Digital Assets

A Regulatory View from 50,000 Feet

How Regulators Might Respond


Countries at Forefront of Adoption






Key Countries

United States

Case Study: Ripple

European Union

United Kingdom



Industry Trends: Central Bank Digital Currencies

Chapter 8. Markets for Digital Assets & Security Tokens

Trading & Finding Liquidity

Developing the Primary Markets

Bringing the Token to Market

Developing Secondary Markets

Case Study: Singapore's iSTOX Digital Platform

What is Needed for Tokenization to Thrive?

Trading Jurisdictions

Alternative Trading Systems

Settlement and Clearing

Industry Trends: Real-Time Blockchain Settlements

Historical Perspective: The Global Financial Crisis of 2008

Where These Markets are Going?

Industry Trends: Stock Exchanges & Distributed Ledger Technology

Chapter 9. "DeFi" - eLending and the Future of Getting a Loa

Crypto Borrowing & Lending

Earn Interest on Crypto

Making Loans With Blockchain


Case Study: Figure Technologies & the Provenance Blockchain

Historical Perspective: The Mortgage Crisis of 2007

Chapter 10. Digital Adoption

Where We are Today

Cryptocurrency Adoption

Demographics Synopsis

Interest by Country

Historical Perspective: Internet Adoption

Case Study: FIO Protocol & The Foundation for Interwallet Operability

The Next Wave of Users


Institution Investors

Hurdles for Tokenization


Quantum Computing

Case Study: COVID-19 - The Novel Coronavirus and the Need For Blockchain Solutions

Concluding Thoughts

Need for Education

Industry Trends - Creating a Cashless Society: The Rise of Mobile Payments in Asia

Who Will Succeed in This Race for Blockchain Dominance - Notes of Caution

Historical Perspectives: First Mover Advantage

Big Fish, Little Fish and the Mighty Whales

Historical Perspective: Titans of the Dot-Com Boom, Where are They Now?

Never Forget, It's All About the Investment Proposition


Additional Resources

About the Author

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About Baxter Hines

BAXTER HINES, CFA, is Managing Partner and Co-founder of Honeycomb Digital Investments. He manages portfolios consisting of traditional assets, security tokens, and digital assets. He was formerly the managing director and portfolio manager at NFJ Investment Group, a subsidiary of Allianz Global Investors.
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