Scaramucci urges banks to kill their own iPods

Anthony Scaramucci, founder of SkyBridge Capital and former White House communications director, urges banks to disrupt their own businesses before competitors do. His advice to bank product leaders is blunt: kill your own iPod before a competitor does. He made this statement at Stellar’s Meridian conference in Lisbon, where he emphasized the need for financial institutions to adopt tokenization aggressively to stay ahead.

A strategic investment in digital assets

Scaramucci’s personal experience with bitcoin began when he purchased his first coins at around $6,000. Although he missed the initial price surge from $500 to $2,000, a meeting with MicroStrategy CEO Michael Saylor in September 2020 reinforced his conviction in the cryptocurrency. He subsequently invested heavily in bitcoin, buying more coins in the $17,000 to $18,000 range, and eventually purchasing nine figures’ worth for himself and his clients in October 2020. However, some clients parted ways with him due to this investment decision.

Currently, Scaramucci manages approximately $2 billion at SkyBridge Capital, a firm that focuses on crypto and late-stage private equity investments. He is also the founder of the SALT conference series, which has hosted around 30 events globally since its inception in 2009. His current focus is on tokenization, particularly the concept of putting the 10 largest U.S. stocks on a blockchain. He believes that once a few companies successfully implement this without issues, their competitors will be forced to follow suit.

Scaramucci estimates that the industry has a two-year window to build momentum for tokenization. He identifies U.S. regulation as the primary obstacle, but expects SEC Chair Paul Atkins to provide administrative guidance, which could be an effective alternative to the stalled Clarity Act. Regulators in other countries are waiting for the U.S. to take the lead, but Scaramucci thinks that even a regulator with a cautious approach, like former SEC Chair Gary Gensler, would be unable to halt the progress of tokenization once it gains traction.

The next wave of tokenization: equities

While treasuries and mortgages are the deepest markets, Scaramucci is keen on tokenizing equities because that is where investors’ attention is concentrated. His reasoning is based on competition: if the 10 largest market-cap stocks are tokenized smoothly, rival companies will have to keep pace to avoid being left behind. No CEO wants to explain to their shareholders why their company cannot offer 24/7 liquidity when their competitors can.

A recent Wall Street Journal ad warned investors they could lose tokenized stock, which he calls misinformation.

Scaramucci himself was initially resistant to contactless payments, but he started using them last year.

Building a foundation for future growth

SkyBridge Capital operates both tokenized and non-tokenized assets simultaneously. Scaramucci bets that investors in their late 30s and 40s are comfortable with blockchain technology and want to move in and out of positions quickly. He finds that back-office and compliance work is similar for both types of assets, but much easier with the tokenized assets.

When asked what a bank’s head of product should focus on in the next 90 days, Scaramucci uses Apple as the example. The iPod was Apple’s most successful product, and Steve Jobs folded it into the iPhone anyway. His advice is straightforward: “Shoot first, ask questions later.” He tells banks to “pretend that you’re in 2035” and work towards getting there as quickly as possible, as the first mover will be rewarded.

Scaramucci wants to apply this approach to his own business, starting with the technology used in his conference business. He also plans to expand SkyBridge’s late-stage secondary business, which has invested in companies like Anthropic, SpaceX, and OpenAI. On the tokenization side, he is betting that Stellar will be one of the major players. He draws inspiration from Wolfgang Puck, who has successfully rebuilt his restaurant business every decade for 50 years, and believes that this approach can be applied to other industries as well.