Crypto is defined broadly as digital units of account in which cryptographic techniques are used to regulate the generation and distribution of units on a blockchain. In practice, crypto means multiple things to different people: an investment asset class like commodities, a store of value like gold, a legitimate medium of exchange, a covert method of exchange, an immutable record of rights and ownership, or even an incentive mechanism like rewards points.
In this paper, we use crypto to refer to all cryptoassets. Cryptocurrencies, security tokens, and utility coins are different types of cryptoassets. Some of these terms may be used interchangeably, particularly where concepts are applicable broadly to all types of assets, tokens, and coins. Cryptoassets have potential. But for them to realize this potential, institutionalization is needed.
Institutionalization is the at-scale participation in the crypto market of banks, broker dealers, exchanges, payment providers, fintechs, and other entities in the global financial services ecosystem, and a necessary next step for crypto to create trust and scale. This paper provides an overview of the crypto market, introduces the emerging tokenized economy, and identifies the key challenges to the adoption of crypto in the global financial services ecosystem.