Lundquist College associate professor of finance Stephen McKeon is quickly becoming the go-to expert for asset-based tokenization.

Just ask readers of CNBC, The Wall Steet Journal, and Nasdaq.com.

First, let's break down what tokens are and how they fit into the cryptocurrency landscape.

Cryptocurrency is not fringe. In recent months, internet companies have raised more early-stage funding via ICOs (initial coin offerings) than venture capital.

The coins (also referred to as tokens) sold in an ICO can represent any number of uses. For example, they can represent the right to purchase a digital good or service, like file storage or identity verification, but they can also represent ownership of real-world assets. It's the last example that interests McKeon.

Ownership records for tokens are stored on a blockchain, a decentralized ledger of transactions. The data is immutable—it cannot be altered once recorded—adding security. It is stored publicly on thousands of computers around the world.

Tokenization of real-world assets, such as stocks, real estate, or commodities, means that ownership and trades are recorded on a blockchain. It adds speed, transparency, and verification to a process that, even when completed electronically, is cumbersome using current infrastructure.

McKeon cites a variety of challenges that must be overcome before we'll see widespread adoption. For example, he says custody of the tokens is problematic for many institutions due to security risks from hackers. Further, he says that the user interface on most of the software we use to hold and trade these assets needs a lot of improvement.

Even with the existing hitches, McKeon sees cryptocurrency and security tokens as a major movement in financial assets, and believes our students should be exposed to it.

“Most people use email every day without fully understanding the underlying technology," McKeon explained.

There was a time one needed to know how to code to use the internet. These days several tools make internet use easy, and McKeon sees a similar shift happening in cryptocurrency.

“The decentralized applications that will come to market over the next decade will allow the general public to use blockchain technology as seamlessly as we use email, online banking, and Facebook today," said McKeon.

One of those tools is Harbor, to which McKeon now serves as an advisor.

Harbor is building a decentralized compliance protocol, standardizing blockchain-based trading to be in accordance with regulation—including securities and tax laws. In doing so, it is removing a major barrier to issuing and trading cryptocurrencies.

The partnership came about when entrepreneur David Sacks—founding COO and product leader of PayPal (acquired by eBay for $1.5 billion) and cofounder, chairman and chief executive officer of Yammer, Inc., which sold to Microsoft for $1.2 billion—read an article McKeon wrote about tokenizing traditional assets and contacted him immediately.

“He'd been thinking along the same lines—the biggest friction in the industry is complying with regulations," McKeon said.

“I've spent most of my career studying security issuance and have always had a passion for technology, so this is a natural extension of my research agenda," McKeon said. “We've also seen enormous interest in this topic from students, so it's great to be able to share some of what I've learned by bringing the research into the classroom."

“My plan is to continue participating actively in this space, interacting with both industry and other scholars across the world. I love that it brings together researchers from several disciplines—economics, law, computer science. It's impossible to be an expert in every facet of this ecosystem, so we learn a lot from each other. The pace of development is unlike anything I've witnessed previously, so it's exciting to have a front row seat."

—AnneMarie Knepper-Sjoblom "05