Krawcheck Joins Board of Blythe Masters's Blockchain Startupby and
Hiring unites two of Wall Street's most high-profile women
Firm recently raised more than $60 million from investors
Former Citigroup Inc. and Bank of America Corp. executive Sallie Krawcheck has joined the board of Digital Asset Holdings Inc., the startup run by Blythe Masters that hopes to revolutionize how financial transactions are processed.
The development brings together two of Wall Street’s highest-profile women. Krawcheck, who was previously head of wealth management and chief financial officer at Citigroup and later ran wealth management for Bank of America, currently serves as chief executive officer of Ellevest, a yet-to-open service aimed at helping women invest. Masters, Digital Asset’s CEO, once ran JPMorgan Chase & Co.’s commodities business and helped invent credit-default swaps.
Digital Asset just raised more than $60 million from banks and other investors including JPMorgan, CME Group Inc., Goldman Sachs Group Inc. and International Business Machines Corp. The company’s mission is to use blockchain, the software ledger that underpins bitcoin, to dramatically speed up and simplify the process of recording trades. While securities trading today relies on a central authority to oversee the transfer of cash for shares, Digital Asset aims to link all the participants in the process on the same database to allow real-time movement of assets -- seconds rather than current settlement times measured in days.
“We are honored to have Sallie join our Board,” Masters said in a statement Tuesday. “She has achieved extraordinary success in her career as both an industry executive and entrepreneur, and her unique mix of experience will be a tremendous asset as we build and expand our business.”
Distributed ledgers face obstacles to success. Fierce competitors will need to collaborate. Regulatory hurdles could kill or significantly slow progress. And although cross-border payment networks based on distributed ledgers could save banks money, it would also drain revenue away from other parts of their business. Another challenge is integrating new technology into existing systems.
Digital Asset is among about a dozen startups that are racing to prove that blockchain can be applied to financial markets. R3, a blockchain startup backed by more than 40 banks, in January successfully simulated trades of digital assets on a private network made up of 11 of its members. Overstock.com Inc. is close to unveiling the first securities-trading system using blockchain, while Nasdaq Inc. recently said it used the technology to complete and record a private securities transaction for the first time.
Digital Asset recently won a contract to upgrade the trade-settlement technology for the Australian stock exchange, the most tangible sign yet that blockchain has a future in financial markets.