Digital Finance
Security Tokens and Unlocking the Real Potential of Blockchain

Explores how the financial industry will be affected by developments in blockchain and cryptocurrencies at the dawn of a new digital age in finance? 

Our financial system is in the midst of a digital revolution. Blockchain, viewed by many experts as ?the most important invention since the Internet,? has changed the way we exchange value and information. Although most people are aware of Bitcoin and other cryptocurrencies, few understand how security tokens?digitized forms of traditional ownership certificates?can drive blockchain to reach its fullest potential by offering investors features and innovations that are simply not possible with paper certificates. 

Digital Finance: Security Tokens and Unlocking the Real Potential of Blockchain explains how the integration of blockchain and security token technology will transform the current financial infrastructure and radically improve efficiency, transparency, and security. Using clear language and an easy-to-follow framework, author Baxter Hines draws upon his decades? experience in the financial industry to address how the digitization of assets will drive cost reductions, enhance flexibility, and pave the way for new business models and revenue streams for years to come. Filled with real-world case studies and expert insights on the latest opportunities and trends, such as the COVID-19 pandemic?s role in accelerating the adoption of blockchain, this must-have resource: 

• Shows how blockchain and distributed ledger technology are disrupting the financial industry 
• Explains what security tokens are and why they are the next major breakthrough for investing  
• Highlights how blockchain technology has created new and more efficient ways of fund raising and investing 
• Identifies the ways companies like IBM, Fidelity Investments, and AXA are deploying blockchain and tokenized solutions 
• Describes how assets only available to institutional investors could become marketed to the mainstream 
• Discusses the impact that security tokens will have on real assets such as stocks, real estate, bonds, and derivatives 
• Provides insight into how central banks around the world are embracing blockchain and beginning to issue digital currencies 

Digital Finance: Security Tokens and Unlocking the Real Potential of Blockchain is essential reading for financial professionals, general investors, finance and technology students, regulators, legal professionals, and users of cryptocurrency and blockchain technology. 

Disclaimer Notice ix

Acknowledgments xi

Preface xiii

Introduction 1

Part I The Magic Ledger

Chapter 1 Blockchain Basics 13

Chapter 2 Fundamentals of a Security Token 37

Chapter 3 What Types of Assets May Be Tokenized? 47

Chapter 4 Security Tokens Will Massively Disrupt and Vastly Improve Markets 61

Part II Creating the Digital Wrapper

Chapter 5 Key Features of a Security Token 73

Chapter 6 The Security Token Ecosystem 79

Part III Realizing the Potential of Security Tokens

Chapter 7 Regulation of Digital Assets 89

Chapter 8 Markets for Digital Assets & Security Tokens 103

Chapter 9 “DeFi”: eLending and the Future of Getting a Loan 117

Chapter 10 Digital Adoption 129

Concluding Thoughts 145

Notes 159

Additional Resources 175

About the Author 179

Index 181

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.