Blythe Masters Tells Banks the Blockchain Changes Everything
Blythe Masters
These Wall Street veterans all know who  Blythe Masters  is.  She ’s the wunderkind who made managing director at JPMorgan Chase at age 28  the financial engineer who helped develop the credit-default swap and bring to life a market that peaked at $58 trillion  in notional terms  in 2007.  She ’s the banker later vilified by pundits  unfairly some say  after those instruments compounded the damage wrought by the subprime mortgage crash in 2008. Now  one year after quitting JPMorgan amid another controversy   Blythe Masters  is back.  She  isn’t pitching a newly minted derivative or trading stratagem to this room.  She ’s promoting something wilder: It’s called the blockchain  and it’s the digital ledger software code that powers bitcoin.
 Masters  is the CEO of Digital Asset Holdings  a New York tech startup.  She  says  her  firm is designing software that will enable banks  investors  and other market players to use blockchain technology to change the way they trade loans  bonds  and other assets. If  she ’s right   she ’ll be at the center of yet another whirlwind that will change the markets.
 Masters  had a hard time believing Digital Asset's Sunil Hirani was serious when he first talked to her about bitcoin. Photographer: Guzman/Bloomberg Markets
 Blythe Masters  swings open the door of her ninth-floor offices  parks her suitcase  and exhales. Fresh off a flight from London  she’s relieved to be back on solid ground. Masters says her airliner was landing when it suddenly roared back into the sky to avoid a collision on the runway. “That’s the most dangerous moment I’ve ever had on a plane!” says Masters  who’s dressed in a black knit tunic  black tights  and Burberry-plaid flats.
Her new digs at Digital Asset Holdings  with a worn wooden floor and views of air shafts  are a far cry from the Park Avenue executive suite at JPMorgan. The glass walls are covered in scribbled pieces of code and diagrams with a lot of boxes and arrows. A gray terrier named Luna  the office pooch  scampers under the conference room table. A guest notes that Nasdaq has just hired a “blockchain technology evangelist.” “We have a blockchain artist ”  Masters  replies  pointing out the one decorative object in the place  a painting depicting a network of black and blue lines. “That is our COO’s homegrown work ” she says with delight. “I rather like it.”
“ Blythe  has about as much wrapped up in one brain as I’ve ever encountered in finance ” says John “Mac” McQuown  co-founder of KMV  a maker of widely used credit analysis tools. McQuown  81  has known Masters since the early 1990s. “ She  is inventive  a risk taker  and beyond a doubt a force to be reckoned with.”
Masters advanced quickly up JPMorgan’s ranks. Following a stint as CFO of its global investment bank from 2004 to 2007   she  was appointed chief of a newly formed unit that helped clients manage risk in commodities markets. During the next five years   she  built it into a profitable business that oversaw billions of dollars of physical assets. At the same time  Masters served as a board member and then chair of the Securities Industry and Financial Markets Association  known as SIFMA. Along the way   she  earned a reputation as that rare figure on the Street  a corporate player with the innovative chops of an entrepreneur.
“ Blythe  sees that a new industry is being created ” says Hirani  who’s known Masters for 17 years. “There’s no infrastructure. There’s no companies that have any kind of scale.  She ’s done the bank thing.  She  did commodities.  She  did derivatives.  She  did loan portfolio management. This allows  her  to bring all of that experience to bear in creating an ecosystem—and a company around it.”
Twenty-three years ago  Masters opened up fresh territory with credit derivatives. Now   she ’s determined to do it again  although this time it’s with a technology that was initially designed to bypass the financial system. Masters  with a very British dose of understatement  puts it this way: “I’ve always been motivated to innovate where the implications are significant.”
These Wall Street veterans all know who  [TGT]is.  [TGT] ’s the wunderkind who made managing director at JPMorgan Chase at age 28  the financial engineer who helped develop the credit-default swap and bring to life a market that peaked at $58 trillion  in notional terms  in 2007.  [TGT] ’s the banker later vilified by pundits  unfairly some say  after those instruments compounded the damage wrought by the subprime mortgage crash in 2008. Now  one year after quitting JPMorgan amid another controversy   Blythe Masters  is back.  [TGT]  isn’t pitching a newly minted derivative or trading stratagem to this room.  [TGT] ’s promoting something wilder: It’s called the blockchain  and it’s the digital ledger software code that powers bitcoin.
 [TGT]is the CEO of Digital Asset Holdings  a New York tech startup.  [TGT]  says  [TGT]  firm is designing software that will enable banks  investors  and other market players to use blockchain technology to change the way they trade loans  bonds  and other assets. If  she ’s right   she ’ll be at the center of yet another whirlwind that will change the markets.
 [TGT]had a hard time believing Digital Asset's Sunil Hirani was serious when he first talked to her about bitcoin. Photographer: Guzman/Bloomberg Markets
 [TGT]swings open the door of [TGT] ninth-floor offices  parks her suitcase  and exhales. Fresh off a flight from London  she’s relieved to be back on solid ground. [TGT] says her airliner was landing when it suddenly roared back into the sky to avoid a collision on the runway. “That’s the most dangerous moment I’ve ever had on a plane!” says [TGT]who’s dressed in a black knit tunic  black tights  and Burberry-plaid flats.
Her new digs at Digital Asset Holdings  with a worn wooden floor and views of air shafts  are a far cry from the Park Avenue executive suite at JPMorgan. The glass walls are covered in scribbled pieces of code and diagrams with a lot of boxes and arrows. A gray terrier named Luna  the office pooch  scampers under the conference room table. A guest notes that Nasdaq has just hired a “blockchain technology evangelist.” “We have a blockchain artist ”  [TGT]replies  pointing out the one decorative object in the place  a painting depicting a network of black and blue lines. “That is our COO’s homegrown work ” she says with delight. “I rather like it.”
“ Blythe  has about as much wrapped up in one brain as I’ve ever encountered in finance ” says John “Mac” McQuown  co-founder of KMV  a maker of widely used credit analysis tools. McQuown  81  has known Masters since the early 1990s. “ She  is inventive  a risk taker  and beyond a doubt a force to be reckoned with.”
Masters advanced quickly up JPMorgan’s ranks. Following a stint as CFO of its global investment bank from 2004 to 2007   she  was appointed chief of a newly formed unit that helped clients manage risk in commodities markets. During the next five years   she  built it into a profitable business that oversaw billions of dollars of physical assets. At the same time  Masters served as a board member and then chair of the Securities Industry and Financial Markets Association  known as SIFMA. Along the way   she  earned a reputation as that rare figure on the Street  a corporate player with the innovative chops of an entrepreneur.
“ Blythe  sees that a new industry is being created ” says Hirani  who’s known Masters for 17 years. “There’s no infrastructure. There’s no companies that have any kind of scale.  She ’s done the bank thing.  She  did commodities.  She  did derivatives.  She  did loan portfolio management. This allows  her  to bring all of that experience to bear in creating an ecosystem—and a company around it.”
Twenty-three years ago  Masters opened up fresh territory with credit derivatives. Now   she ’s determined to do it again  although this time it’s with a technology that was initially designed to bypass the financial system. Masters  with a very British dose of understatement  puts it this way: “I’ve always been motivated to innovate where the implications are significant.”