Outlook 2019: Ned Myers, AlphaPoint
Ned Myers is the head of product and marketing at AlphaPoint.
How will the new year be known?
It will be “The Year of the Security Tokens.”
Will it go as far as being the ’Year of Institutional Crypto?”
I think 2019 will be a tipping point for institutional crypto. There are firms, like Fidelity, that will be transforming their businesses to adapt to the digital/blockchain world, but I think full adoption across the spectrum may wait until 2020.
For firms that have already been investing in the technology, I think there will be a move away from ‘proof of concepts’ into operational adoption. I also think large financial institutions will adopt crypto in two ways: they will develop investment strategies and platforms focused on crypto and they will transform their traditional securities businesses around the creation of digital assets, or security tokens.
The issue of custody and settlement must still be resolved. Regulatory clarity will help go a long way towards broader adoption.
What do envision as the next watershed event for the industry?
It will be additional clarity from the Securities and Exchange Commission and Commodity Futures Trading Commission regarding regulatory guidelines for classifying, issuing, reporting on, and transacting in digital currencies and digital securities.
A lot of attention has been given to the SEC’s discussion and decision regarding cryptocurrency exchange-traded funds. When broader regulatory acceptance of crypto-based financial products occurs, there will be less apprehension from established institutions to drive forward on their strategies.
Will Wall Street return to focusing on innovation to drive alpha in 2019?
In the asset-digitization space, there should be a convergence between the non-institutional early adopters of cryptocurrencies and the more formal adoption of the technology to digitize assets by major financial institutions.
What will be the skill sets most in demand this coming year?
The ability to program a smart contract using several various distributed-ledger technology protocols as well as back-end development: C#, .Net, multi-threading, object-oriented, and open journal systems.
Why do you expect investments in fintech to rise, plateau, or trail off in 2019?
I expect investments in fintech will rise in 2019. This is due to many factors including the institutional adoption of cryptocurrencies as an asset class, the adoption of smart contracts in traditional securities markets to increase efficiency and return capital to the transactions, and the clarity and ubiquity of security tokens as an efficient means for providing liquidity to illiquid asset classes.
At AlphaPoint, we are planning for at least eight different use cases for the $250 trillion global real estate markets alone. When we add in equities, debt (corporate, structured finance, et al.), commodities, and luxury goods, the expectation of a multi-billion-dollar digital asset market actually seem quite modest.
Can its backers launch the cryptocurrency before central bankers, regulators, and legislators catch up?
Aim is to support innovation that will benefit consumers.
USC envisages being 100% backed by fiat currency held at the respective central bank.
Novelty, politics, and rapid evolution will preclude meaningful harmonization.
Many of the regulatory issues are common to traditional securities trading venues.