From Investment Bank Intern to Head of Strategy at a Crypto Firm: 25 year-old Sebastian Widmann, Head of Strategy at Komainu

Sebastian Widmann, Head of Strategy at Komainu, joins Work in Fintech to discuss how finding a good mentor and manager will help careers, how passion for a subject (blockchain ) gave him an edge and offers graduates some great advice from moving from intern to head of strategy in the space of a few years.

With a multi-disciplinary background spanning many languages, banking and blockchain Sebastian was the first hire in the digital assets team at Nomura, the leading Japanese investment bank. He's knowledge and passion for blockchain helped him to rapidly rise to head of strategy at Komainu, a crypto custodian backed by Nomura, Ledger and CoinShares.

Sebastian's insightful lessons are essential for all young people looking to make an impact in their career in fintech and web3.

https://www.linkedin.com/in/sebastianwidmann/

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Transcript

Hi, this is Matt from working fintech. And today we're delighted to be joined by Sebastian vindman, who's head of strategy at carmanah. So hi, Sebastian, if you could please introduce yourself a little bit of background about where you're from where you studied. Just a little bit of history before we kind of jump into what you're doing.

Definitely, Matt, first of all, thank you for having me on the podcast. I think it's a good opportunity to showcase where I come from what I've done, as well as to outline the opportunity for new and similar students potentially to move in a career field. And myself. My name is Sebastian Whitman. I currently am the head of strategy combined on a regular digital asset custody solution. I grew up in Italy in a multidisciplinary and multi cultural environment in the north of Italy, where I spoke German and Italian. I attended the German school until I was 15, before moving to the UK, to attend an international school and then later studying an entrepreneurship degree at University College London. And that's when I first got acquainted with digital assets and blockchain technology. I'm Italian, I speak German, and I'm from the very north of Italy. So it's a region called South drawl. It's very multicultural. I think there's a subset of the people that speak German as a first language subset speak Italian. My mother is a Venetian and my father is from Botswana, which is in South Korea. So I feel Italian but also have German roots right.

Now you work for or you did work for a Japanese bank. And you mentioned Nomura in the wholesale digital office. So what does that entail?

Yeah, so after university, I studied intrapreneurship, economics and Russian at UCL. At the time, I had a bit of exposures over the summer. So completed summer internships in the financial services industry, I was working at Mediobanca, a leading Italian investment bank, and the front office focusing one summer on equity sales, and the other summer and Debt Capital Markets. After university, I wanted to try out what it was like to work in a bigger institution. So I decided to apply for Nomura. Also, for their front office summer internship, I did a number of rotations, ranging from research to strategy to a theme called Client ecosystem, which was very interesting because it was the first team that was sitting in the front office, but was really looking to lead the digital transformation of different artists, so looking to leverage third party FinTech tools, and new technologies to make the work and front office employees more efficient. And that's later got turned into the host of digital office. So the bank saw the importance of digital transformation in banking and finance in general. And the wholesale digital office then grew bigger to encompass the AI strategy of the bank, the trading strategy, client ecosystem, FinTech investments, as well as well then moved into digital assets. So in January 2018, the bank decided to hire just Mohiuddin as Chief Digital Officer. And the second day he joined, I was working for a very good friend and a mentor of mine, who took me into the room with jazz and really presented my view of digital assets to him. And together and we launched the digital assets team and really started to look at how no more as a global investment bank could gain exposure to the overall digital asset segment and industry.

Can you elaborate a little bit more on on that mentor he mentioned? Because from some Nakamoto people we've had on the podcast before that's been someone who's helped them or guided them or gave them some some insight. Can you talk about your experience
that? 

Definitely so after my internship, but no more I received a number of offers and do so you do three months internship devoted between teams, and then the team's choose? Which ones want to hire offer your full time position. That was a bit of a dilemma because I worked in two teams, which really liked the strategy team as well as the client ecosystem team. And they were quite similar one was a bit more important internally, I decided not to go for the more prestigious job or role in the organisation, I decided to choose a manager as opposed to a team. And I think that was a very good decision. Because as you start off to your career, you really need people that see the potential in young individuals, and they really want to help you grow in that way. And my former manager, Craig Butterworth really helped me and allowed me to explore him. I was interested in digital assets since 2014. No more was really active in the space. But he introduced me to multiple teams within the organisation in London, as well as in Japan and abroad that were working or researching that field. And so it really gave me the freedom to explore and see and actually follow my interest. And then later that turned into a new team that was set up where I was the first employee that really then sets the stage to the next chapters of my career.

Fantastic, Craig Butterworth. We've had him on the series before, so if any listeners want to check that out and tune into his podcast, so with the digital app Second blockchain strategy, part of the broader kind of business, did you in effect, kind of were running this as a was it a kind of a one man team to start and grew quite rapidly from there?

So, in late 2017, there was the last Bitcoin bull cycle. So you see that the price, it was the first time that really brought me the end that you heard Bitcoin on the trading floor. So there was media as a global speaking about the rapid rise of Bitcoin to 20,000, etc. And so it really started to gain I think the first time institutional interest. I've been quite active in the field. And when I was at UCL, I was part of the UCL centre of blockchain technologies were published a couple of papers, looking at blockchain in finance, as well as use cases outside and the challenges limiting its potential. And so it was quite familiar with the technology and its potential. And internally, I started making some noise to my team as well as to other areas of the bank around Nomura, being a Japanese entity and with its culture being very normative, looking at what the strategy of the overall bank was, there wasn't really a strategy. So back then, banks and I think financial services, in general, believed in the potential of blockchain technology to create efficiencies in traditional finance, but really didn't believe in Bitcoin as a potential new asset class. However, with the rapid rise of Bitcoin, we did some research and most of the on ramping meaning from theatre to digital assets was being done through Japan. And given that Nomura was and still is one of the biggest effects franchises for the Japanese market tremendously, and I started making some noise around what is the strategy in this field? And what are we doing, and we didn't do too much. But then luckily, we hired we're not the bank hired just Mohit into leads the wholesale digital office. And I think the second day he joined, Craig brought me to meeting room in a certain way just to really align our vision. And to my surprise, and luck, he was quite aligned. He had his own vision, he believed in digital assets, he saw the potential. And he really understood the technology as a potential segue to creating a new financial market infrastructure. And so together, we set up the initial team, it was the two of us and then we grew over time. And we really looked how we could gain exposure, or how the bank could can exposure to the overall ecosystem initially was around should we look at trading. And obviously at the time, there wasn't the right market infrastructure that would allow an institution the size of Nomura, with its regulatory oversight to tap the markets in any form. And so we started looking at the Broad challenges in the market that would hinder institutions to get exposure to the asset class. And we noticed that custody, and was one of the main challenges. If you recall, there were a number of hacks. Also in Japan, and especially in Japan, coincheck. around that period, were over 550 million at a time, which I think now is over a billion dollars, equivalent of digital assets have been stolen. And so we analyse the market overall, and decided that any financial services institution or any institution around that would want exposure to digital assets, would that its foundation require a digital asset custody strategy. And given that there weren't any institutional great custodians in the market back then, we decided to take the initiative to create our own one. And so we partnered with two leading companies Quenchers, which was a leading digital asset fund manager. And now it's listed on the Swedish NASDAQ, as well as ledger, the industry leading digital asset security provider, to create comando in the form of joint venture. We've also no more bringing in institutional expertise and to really create the first regulated and institutional grade custodian for digital assets.

So who else exists in that ecosystem that you're operating in?

The ecosystem custody or digital assets? Because I think it's the same in crypto custody. Custody, okay, so if looking and they give a talk recently on the evolution of digital asset custody, there's different ways of storing digital assets. And there's different needs that any institutions has. So digital asset custody, I think, was first coined around 2013. When you have companies like bit, go and example and hold private keys on paper wallets, or hardware disks, and then store these in hyper secure offline vaults that was secure, because it was very hard to it's very hard to go into this vase and steal these private keys. But it's very inefficient in terms of if you were wanting to move assets from one address to another, it would take anything from one to five days, because it was a very manual process. So no institutions will be comfortable with the process and the operational risks that it entails. Over time. The technology securing digital asset matures around 2018, Ledger commodity ledger calls, it was the first purpose built hardware security module to really store digital assets in an offline way but with the availability to move assets quickly, and we thought it was the right time to really come to market with institutional grade offering, which has the security of cold storage solution, meaning that you would store the keys offline, whilst having the availability of assets of warmer solution, which is something that exchanges use at a time. And there's a number of startup companies that have also been active in the space, the likes of bitgo, Anchorage. And also more recently, we see that there has been increased interest from the institutional space, and traditional financial service institutions see the need for a digital asset custodian. And so they're either investing or logic around ventures, predominantly there is fidelity with their subsidiary fidelity digital assets, as well as Standard Chartered ventures that launched a year back.

So for maybe kind of students who are playing around with crypto at the moment, who offer an institutional service of the seek for a passphrase, where you're you, you are here and your clients are handling the keys. And if if your client forgets his secret passphrase, that was written down on a bit of paper, that fact doesn't exist in your world where you can offer a fully kind of encrypted and regulated authorised service around that instead.

Yep, so we hold keys on behalf of our customers, and we custody their digital assets in our solution. I think because of the nature of digital assets that enable new business models that haven't existed or don't exist. In traditional finance and traditional custody, custody of commodities or securities, the role of a custodian really evolves and has evolved to date. Since the custodian, we provide custody, which is the secure custody of assets, we provide regulated custody of these assets. And now we're really looking to expand the utility of custody. So today, we actually announced commando yield, which is a new set of services that allows clients to earn yields on assets that they hold in custody with us that come through staking projects in the future through participation in the central finance. And it's really this new technology that enables new business models that are of interest institutions that really enable to remove some of the intermediaries existing in the traditional financial market, and create more efficiencies and more transparencies in this new way. And it starts with cryptocurrencies. But it's soon as I'm starting to move into more traditional assets and digital forms of traditional assets, whether that's currency, so we have stable coins, and now I have discussions around Central Bank digital currency, but also traditional securities and our real estate being tokenized. And represented in digital form on a distributed ledger.
So this kind of defy approach, taking it in back into traditional assets. So So in terms of crypto more generally, do you do you as I suppose, as a firm and personally do you see crypto becoming the rails of the next iteration of the internet? Ie kind of the you know, the metaverse web three moving forward?

Definitely. And I think it's not only crypto as much as I think crypto will take many forms. Today, the most predominant are cryptocurrencies which are decentralised stores of value or decentralised utility tokens, etc. Over time, I think the technology will be adopted to an increasing extent to really issue traditional assets, again, whether it's currencies, commodities, real estate, stocks, bonds, in a digital form, and it will all run on the same rails, there's a number of benefits of that on one side, you can really create fragmentation and fractionalization of assets, which haven't, which doesn't exist in a traditional financial market. Secondly, there's faster settlement rails, and most of the technology over time, and there's still some challenges because we're at its point at a very early stage technology, and there's still a lot of research and development to be made. But there's the view that you can create an fully interoperable exchange whereby you create, you can exchange any digital assets with any digital asset. And the most interesting part, I think, is that this technology enables new form of assets. So what's traditionally haven't been financial products, where the class can be turned into financial products in this new realm. Anything from contents to images within non fungible tokens to music to anything that you can imagine can be turned into digital assets and assign value on a distributed ledger?

So where do you think we are on that kind of technology lifecycle with all of that technology he's been talking about? It's still, you know, very, very, very early in this in this adoption of new technologies.

I mean, an interesting segue. I published two papers with the University College London. And that was 2015 2016. Looking at the potential of distributed ledger technologies at a time they only didn't only call it blockchain, because there's different iteration of the underlying technology. But we looked at the challenges limiting widespread adoption. And I think most of these challenges are still present around education, technology, scalability, understanding, some additional technological factors, etc. That's why we're extremely, extremely early. There's a lot of developments. We'll have to see how it goes. I was in a conference three weeks ago with one of the most active developers, technologists and industry leaders, and similar, very valid points saying that if you compare blockchain to the internet, we're not anywhere close 2001 2002 When you saw the tech bubble were much more like 9095 1996, where you see really the early adopters gaining initial exposure, but no real application finding widespread use. And I think given that technology over time, exponentially grows and the developments exponentially speak of speed, they will be much faster. So we see what's with us, but also the potential of the technology, lots more widespread in terms of use cases and industries that you can touch.

So massive opportunity ahead. So in terms of our podcast is called interviews, and fintech, we're called work in FinTech. FinTech, we define in the very broad sense, covering everything from Krypton web three through to neobank, sweeter capital markets and everything else in between. Yeah, as kind of the arrival of web three has happened with a big bang in the last year or two definition of FinTech has evolved in itself. How would you define FinTech given the he started, I suppose, investigating and researching blockchain, you know, a few years back, you weren't in traditional finance. But actually, you kind of followed your passion. Other people bought into that and actually could see some business use cases. Now you are working in crypto. So how would you kind of define fintech? Given your own experience for people that are looking at it? Who might normally be looking at traditional finance as a career? How do you position FinTech as a career? 

Yeah, I mean, FinTech, I think, is a futile term as we move into this new wave of digitalization of the world. Back in the day, we looked at the tokenization of the world. So we are of the belief that any assets that can be represented on a digital ledger will be represented on a digital ledger in digital form, called the digital assets itself, fully interoperable with a multitude of these, so think any company over the coming years will be a financial technology company, whether that's through exposure to non fungible tokens, we see a number of legacy institutions moving into this field now and really making waves and investments in this space. So I think everyone will need a strategy because it allows you to really create new ways of connecting with your customers and end users in any form in any industry. So think any company will be a FinTech industry, or a FinTech company, and over the coming decade, and to answer your question around how students should look at it moving into traditional finance, I am to convince shoppers, I think the best way to get ahead of the competition and really pursue your passion is to choose an area of the industry where you where there's a lot of innovation going on. Because if there's innovation, especially if you look at traditional financial services, institutions with quite stringent hierarchical structures, it's hard to move up the ladder. However, if you look at anything where there's a lot of innovation, and a lot of developments on an ongoing basis, the junior workforce, often given their personal interest is much more aligned and in sync with innovation that comes to market than the senior counterparts. And so it really levels the playing field. And the junior person most often knows more than the most senior person in the team. And that's how you really turn around the ladder and create opportunities. And so going back to the companies, you need to choose a theme and managers that see that opportunity and see the potential and they want to use you and leverage your insights into the industry. And given that everything will be based on digital and the next generation will be more in sync with the digital developments than the other one. That really helps you scale the organisation, find your niche and then work in that space.

Some great advice, and how do you see your journey unfolding? Because you're 25 Four, or there abouts, you're still very young, and Odell people of your age are gonna live to 100 years old. And it's just as life expectancy grows longer, maybe possibly even longer. You might even have 100 year career, given that you're only five years or so into it at the moment. How do you see that kind of unfolding? And where where do you see that 100 year career? Let's call it going from here?

Yeah, I mean, I don't plan that long into the future. To be honest, I try to live as much in the present as possible. So I don't have a real 75 year plan. Having said that, I've been lucky all my life today that I've been at the right place at the right time. And when I've seen opportunities, I've been inclined to take the bigger risk opportunity and just go after it. And so far it's worked out and I hope that it will continue to do so in the future. Personally, what I'm currently looking at activities, the next iteration of blockchain technology. So moving away from what we see now more moving into web three and how this technology can really impact the way society organised So there's a new concepts or that's not being spoken about more increasingly called decentralised, autonomous organisations. So I really think that work as we know, it will significantly change over the coming decades, people will be able to work in multiple companies and multiple roles at the same time, and really not have a strict employer but be employed by a community. So we see these projects, there's a number of difficult dowser that's allow anyone to contribute to the community. And then the community decides who should be rewarded who shouldn't be rewarded based on their inputs and initiatives, they lead within that community. And this is really being able to create the next wave of organisations that work in a very decentralised and global manner that we're moving into what technology ultimately does is really connect the world to a global scale, and really create this interconnectedness. And I think it'll be extremely interesting to see new business models and new type organisations to come to market. With the coming years. Obviously, there's a lot of challenges on the technology, regulatory side understanding etc. But I think that is a very big potential around organising society and labour in a more efficient and more transparent, as well as more fair way that will create a very, very interesting concept, some staying close to it. It's I think, again, in a very early stage, but I think it's potentially one of the most interesting segments and use cases of blockchain technologies.

Sounds like you've got a very exciting role keeping your fingers on the, on the pulse of all this cutting edge technology. So Sebastian Woodman, thank you very much for joining us today.

Figure out what it's been like. Great. And then if anyone has additional question, I'm always available. I can be reached on LinkedIn or you can find my email assuming the notes