Interview with the specialists at Chamber of Digital Commerce, 

Initially Revealed by ConsenSys Media: Trends in Tokenization with the EEA and Chamber of Digital Commerce

The Chamber of Digital Commerce, the world’s largest commerce affiliation representing the blockchain {industry}, alongside the Enterprise Ethereum Alliance (EEA), a collaborative cross-industry effort created to advance enterprise blockchain know-how, just lately introduced a brand new partnership to strengthen {industry} advocacy and training efforts round tokenization.

The Chamber of Digital Commerce will change into an EEA Affiliate–Collaborative Member, and the EEA will change into a strategic associate of the Chamber of Digital Commerce. The partnership will allow workers from each organizations to take part in token initiatives led by each organizations:

The EEA’s Token Taxonomy Initiative (TTI) is a separate and blockchain-neutral initiative hosted by the EEA to outline and perceive token taxonomy. Led by TTI Chair Marley Grey, Microsoft Principal Architect and EEA board member, the TTI is open to all EEA members and contains high-profile members together with Accenture, Adhara, Banco Santander, Clearmatics, ConsenSys, Digital Asset, EY, Hedera Hashgraph, IBM, Intel, ioBuilders, Itau, J.P. Morgan, Komgo, Microsoft, R3, Web3 Labs, amongst others. The TTI just lately launched its first framework, which incorporates business-ready token definitions and specs, ‘recipes,’ based mostly on actual use circumstances, similar to Digital Asset’s good contract tokenization and Microsoft’s Azure Blockchain Tokens, and could be seen right here: Token Taxonomy Framework V 1.0 and draft specifications.

The Chamber of Digital Commerce’s Token Alliance is an initiative with greater than 400 world members, together with blockchain and token specialists, technologists, economists, former regulators, practitioners and legislation corporations. The Token Alliance is co-chaired by Dr. Jim Newsome, Founding Companion of Delta Technique Group, and Former Chairman, Commodity Futures Buying and selling Fee, together with Paul Atkins, CEO, Patomak World Companions, and  Former Commissioner, U.S. Securities and Alternate Fee. The group launched “Understanding Digital Tokens,” a collection of reviews that delves into the general regulatory and market panorama of the token ecosystem.

The strategic partnership between the 2 organizations will give attention to selling token interoperability initiatives and regulatory concerns relating to digital belongings and blockchain-based applied sciences.

To additional study the partnership and developments round tokenization, ConsenSys interviewed:

  • Chamber of Digital Commerce Founder and President Perianne Boring
  • EEA Director of Neighborhood Paul DiMarzio
  • Token Taxonomy Initiative Chair Marley Grey, EEA Board Member, and Microsoft Principal Architect

What was your preliminary reasoning for founding the Chamber of Digital Commerce?

Perianne Boring: “Within the early days, we believed that that authorities and regulation could be a barrier to the adoption of blockchain know-how, and we have been satisfied that the {industry} ought to have devoted {and professional} sources to work with the policymaking neighborhood to information them as this know-how begins to develop and flourish. We launched 5 and a half years in the past and now now we have over 220 members — so it seems we have been fairly right in that assumption.” – Perianne Boring

What’s the present panorama of digital asset and blockchain regulation within the U.S?

Perianne Boring: “Within the U.S., the SEC views an expansive variety of digital belongings as falling throughout the securities legal guidelines framework utilizing case legislation that was not designed for a digital, tokenized surroundings, thereby impeding innovation for worry of triggering these legal guidelines. If a digital asset is designated as a safety, it should by no means have the ability to function as a way of cost or be used for its supposed use or design in a blockchain community. The CFTC has stated that digital currencies, together with bitcoin and ether, are commodities. One aspect of the Treasury Division, FinCEN, is regulating digital belongings like currencies, which suggests they’re topic to AML regulation. The IRS, which additionally resides throughout the Treasury Division, has decided that they need to be handled and taxed as property. When you could have any such regulatory ambiguity or uncertainty, it makes it very tough to construct and function in america.” 

“Stablecoins will not be supposed to be securities. They’re supposed for use as one thing that steady in worth, whereas a safety has an expectation of revenue. But when [stablecoins] are actually being outlined as securities and thrown into securities legal guidelines, they are going to by no means have the ability to function as a way of cost. That’s one instance, however as we get into extra superior purposes of blockchain applied sciences and digital tokens, these points are simply going to get extra difficult over time.” 

What’s the significance of this partnership, and the way will the Chamber of Digital Commerce and EEA collaborate transferring ahead?

Paul DiMarzio: “This partnership is a first-rate instance of a tech standards-focused group (EEA) and regulatory- targeted group (Chamber of Digital Commerce) specializing in totally different points of the know-how that may push the {industry} ahead. The important thing right here is to guarantee that inside the entire token {industry}, anyone who’s producing software program round tokens does it in a means that meets the regulatory necessities and in addition does it in a means technically that gives interoperability.” 

Perianne Boring: “If these two communities between the coverage neighborhood and the technical communities will not be coordinated, you’re going to finish up with requirements and rules that aren’t interoperable. A proper partnership between the EEA and the Chamber of Digital Commerce is extremely essential. Not too long ago, we’ve spent loads of time engaged on the way to outline a stablecoin and that actually does change into a technical dialog, so a giant a part of this partnership is integrating the work in order that we are able to have the cross-pollination of minds between the technical neighborhood and the regulatory neighborhood.”  

The Chamber of Digital Commerce created the Token Alliance. What’s the Token Alliance and the way has it helped information regulation and coverage for digital belongings?

Perianne Boring: “Two and a half years in the past, we put collectively a working group throughout the Chamber of Digital Commerce known as the Token Alliance, which got down to convey the blockchain {industry} collectively to subject a set of sources for policymakers and practitioners (corporations in token area) to create tips. The TA issued the primary and largest regulatory challenge round tokens this {industry} has seen with over 400 contributors offering tips for tokens which are thought of securities and people that aren’t. It was a large accomplishment to have interaction our members on this course of. 

Earlier this yr, we elevated the scope of the rules that we’ve now issued tips for client safety, cybersecurity, and AML. The Token Alliance has additionally developed a number of different public authorized sources, together with authorized landscapes of various jurisdictions world wide.” 

What misconceptions do you are feeling that folks nonetheless have about tokenization and blockchain?

Marley Grey: “Broadly, there’s a false impression that tokenization is just about cryptocurrency, or that it’s solely used for funds. We’ve got to dispel these misconceptions and present that tokenization builds on enterprise ideas that folks already perceive. So there’s an enormous academic effort now we have to undertake with loads of totally different audiences and the primary goal is to determine these frequent phrases and definitions; in any other case you’re not going to get a constant message.” 

Perianne Boring: “There was important pushback from policymakers on blockchain know-how due to the worry of cryptocurrencies. We are going to proceed our training and advocacy work to make sure that policymakers perceive the nuances between the totally different purposes of blockchain know-how and be sure that now we have a authorized framework that promotes the event and innovation of this know-how.”

What are some developments within the tokenization that you’re seeing both from the technical or regulatory perspective that may play out in 2020?

Marley Grey: “Stablecoins will probably be a serious pattern, as a result of it’s and simpler idea to know, though it’s nonetheless actually laborious to outline. We’re additionally trying into behaviors and properties that we use with tokens to make custody simpler and extra easy. A number of the early [adoption] we’re seeing is thru the blending of token behaviors throughout ecosystems and industries. Broadly, we take a look at all the pieces as a provide chain and tokenization must be the lubrication of provide chains.” 

Perianne Boring: “The Chamber of Digital Commerce is specializing in custody and creating a set of coverage concerns for the custody of digital belongings. It’s very clear that the regulatory conversations are evolving quickly as larger organizations enter the [blockchain] area as effectively. Many developed nations world wide are additionally creating methods to construct and develop blockchain know-how inside their very own jurisdictions.” 

Paul DiMarzio: “What’s actually going to be attention-grabbing from an EEA and TTI perspective from my viewpoint is the ultimate transfer to certification. It has at all times been a purpose of the EEA to certify that purposes adhere to our specs, and that may go stay in 2020. Then, we may even have the ability to confirm {that a} token has adhered to the specs and framework which is able to assist enhance interoperability from a technical viewpoint.” 

The place is the U.S. by way of world management for blockchain and digital asset regulation?

Perianne Boring: “In the event you look world wide, there are a number of nations which have superior know-how methods and frameworks already in place, similar to China, the European Union, Singapore, and lots of others. These nations are out in entrance of america by way of creating authorized environments that assist the event of blockchain know-how inside their borders and have developed authorities methods to make the most of blockchains for the advantage of the general public sectors. So, I’d not contemplate the U.S. on the forefront right now, however I do nonetheless suppose there’s time to catch up and for the usto protect its technical management.” 

Speaking with these technical and regulatory {industry} specialists makes a number of themes abundantly clear:

  • Alignment between the technical neighborhood and the coverage neighborhood is important for the continued success and prosperity of the blockchain {industry}. The EEA, TTI, and Chamber of Digital Commerce are deeply dedicated to educating and advocating for tokenization world wide.
  • This {industry} continues to be unbelievable nascent and nuanced. 2020 will convey technological developments for tokenization, digital asset custody, and extra. There will probably be an equal and simultaneous push to outline these technological developments and be sure that authorities companies and policymakers perceive the way to regulate these improvements successfully.
  • This new strategic partnership is the most recent in a motion of blockchain organizations cooperating to offer better training and advocacy on behalf of this progressive know-how.

 

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