Blockchain, Bitcoin, Crypto Assets and STOs: Emergence of a … · 2019-11-21 · Blockchain, Bitcoin, Crypto Assets and STOs: Emergence of a New Financial System? ... Delivery vs

Prof. Dr. Philipp Sandner Blockchain Center Frankfurt School of Finance & Management E-Mail: [email protected] Internet: www.fs-blockchain.de

Blockchain, Bitcoin, Crypto Assets and STOs:

Emergence of a New Financial System?

https://campus.frankfurt-school.de/clicnetclm/iFrame.do?kat_id=104873



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Hype and reality




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17 © Prof. Dr. Philipp Sandner







What is the current state of DLT?

100 %

2005

0 % 2015 2025 2035

Smartphones

Distributed

Ledger

Technology

National blockchain

strategy of Germany


Germany‘s national blockchain strategy:

financial area (simplified)

Securities De-materialized securities

on blockchain

Euro Euro

on blockchain

„Traditional“

crypto assets

Private

„stable coins“

Traditional

finance area

„Digital Economy“

based on tokens

• In a first step, debt

(„Schuldverschreibungen)

• Later, further classes of

securities

• Euro on blockchain based

on the E-Money regime

• Other currencies would

also be possible

• Bitcoin

• Ethereum

• ...

• Libra

• Gold-backed tokens

• ...

Which problem does

blockchain technology

solve?


Pipeline vs. register


Payment process between two parties

Alex Sophie

Bank Bank Correspondent

bank

Correspondent

bank

A payment requires multiple stages:

this costs time and can induce errors

Ledger Ledger Ledger Ledger


The core of blockchain technology

The core of blockchain is that

all transactions of a specific asset

are recorded in one common distributed database

Ledger

The ownership for a property will therebybe transferred

from an old owner to a new owner

Alex Sophie


Capitalized register (i.e., registry organizing ownership of money or assets)

The most important aspects of DLT

Register technology (i.e., technology to maintain registers)

1

2

Programmable money, tokenized assets

3

Page 52 3 – Introduction to DLT

Interaction between

tokens and

smart contracts


How does a transaction currently works? (2-3 days; fees)

How does a trasaction works on a DLT system (atomic swap)? (seconds, no fees)

Blockchain technology provides an infrastructure for transactions. Delivery vs.

payment (DVP) will therefore be replaced by atomic swaps.

A B Clearinghouse

Shares

Money

A B

IT system 1

IT system 2

DLT system

1

Shares

Approval

Money

1 2

3

4 5

Shares

Money

Smart

contract

Basic principle of

tokenization


Where have tokens been used and where will they be used?

Security token

Software license

(Nothing)

Source: Liechtenstein Blockchain Act (2019)

Utility token

(Ethereum)

Crypto currency

(Bitcoin)

Cash on ledger,

stable coin, Euro




Utility token

(Ethereum)

ICO

Paym

en

t

Exch

an

ge

Pri

vate

in

vestm

en

t

Fin

an

cia

l serv

ices

Crypto currency

(Bitcoin)

STO

(IPO)


Security token

(Securities)

Cash on ledger

(stable coin, Euro)




Utility token

(Ethereum)

ICO

Paym

en

t

Exch

an

ge

Pri

vate

in

vestm

en

t

Fin

an

cia

l serv

ices

Crypto currency

(Bitcoin)

STO

(IPO)


Security token

(Securities)

Cash on ledger

(stable coin, Euro)

Primary

market

Payment

Secondary

market




Utility token

(Ethereum)

ICO

Paym

en

t

Exch

an

ge

Pri

vate

in

vestm

en

t

Fin

an

cia

l serv

ices

Crypto currency

(Bitcoin)

STO

(IPO)


Security token

(Securities)

Cash on ledger

(stable coin, Euro)

Primary

market

Payment

Secondary

market

Delivery versus payment

(on one single platform)



Digital economy

Use case: car

Lien

Right of ownership

Usage right

Leasing

Car sharing

Car rental

Insurance

Car investments

Theft control

Source: Liechtenstein Blockchain Act (2019); Lien in German: “Pfandrecht”

€

€

€

€

€


Digital economy

Use case: machines

Pay per use

Leasing

Factoring

Securitization

Source: Liechtenstein Blockchain Act (2019); Lien in German: “Pfandrecht”

€

€

€

€

Quality control

Sales financing («Absatzfinanzierung»)

Portfolios: investment and fractional

ownership

€

€

Usage right

«Right on quality»

Lien

Right of ownership

Bitcoin, crypto assets

(public blockchain)


Ranking of crypto currencies


Capitalization of crypto assets in comparison to other asset classes

Source: Cryptology (2019)


Tokenization creates new asset classes and revolutionizes existing ones

The asset universe: bankable and non-bankable assets

Bankable assets

• Stocks, profit

participation

certificates,

currencies, bonds

• Can be directly

created on the

Blockchain

• Not necessarily

backed by real

assets

• Issuers must be

trusted that value is

behind the asset

Non-bankable assets

• Any kind of real

assets (real estate,

art, patents,

certificates,

coupons, cars)

• Ownership can be

fractionalized and

fungibility of asset is

created

• Trust issuer that

(tangible) asset

exists in described

conditions

6 – Deep Dive: Tokenization of Assets

Invest in blockchain


Investment in blockchain and DLT

Investment in tokens

Direct Indirect

Crypto exchanges

Banks and broker

Managed accounts

Certificates

Futures

Single asset funds

Hedge funds

CFDs

Investment in

ecosystem and companies

Infrastructure Companies

Mining

Master nodes

Stocks

Venture capital


Example of a crypto fund

Arbitrage spread analysis and trade execution

Source: Blocksize Capital (2018), www.blocksize-capital.com


Example of a crypto fund

Arbitrage spread analysis and trade execution


Kontakt

Prof. Dr. Philipp Sandner

Leiter des Frankfurt School

Blockchain Center

[email protected]

Frankfurt School of Finance

& Management gGmbH

Adickesallee 32-34

60322 Frankfurt am Main

Germany

Kontaktieren Sie mich gerne

via E-Mail, Xing, LinkedIn oder

Twitter (@philippsandner).


Prof. Dr. Philipp Sandner

Geboren 1980 in Heidelberg

Kontakt: [email protected]

Studium der BWL an der Universität Mannheim

Promotion an der Ludwig-Maximilians-Universität München

Auslandsaufenthalte an der Copenhagen Business School und an

der University of California at Berkeley

Post-Doc an der Technischen Universität München

Mitgründer einer auf Innovationsstrategie und IP

spezialisierte Unternehmensberatung

Professor an der Frankfurt School of Finance & Management;

Themengebiete: Digitalisierung, Entrepreneurship und Innovation;

Leiter des Frankfurt School Blockchain Centers

Blockchain, Crypto Assets, Initial Coin Offerings (ICOs),

Digitalisierung und Entrepreneurship

Beratung von Unternehmen hinsichtlich ihrer Blockchain-Aktivitäten,

u.a. auch den ersten Crypto Fund Europas oder Startups in

Consensys’ Token Foundry Programm

FinTechRat des Bundesministerium der Finanzen,

Mitgründer des Blockchain Bundesverband e.V.,

Multichain Asset Managers Association

2000-2005

2005-2011

2010-2015

2015

seit 2017

Themen

Praxis

Engagement

Documents

Blockchain, Bitcoin, Crypto Assets and STOs: Emergence of a … · 2019-11-21 · Blockchain, Bitcoin, Crypto Assets and STOs: Emergence of a New Financial System? ... Delivery vs