The Enterprise Ethereum Alliance (EEA) is spearheading a blockchain-neutral Token Taxonomy Initiative (TTI) targeted at enterprises. The project has attracted an impressive array of participants from across the industry including Accenture, Banco Santander, Blockchain Research Institute, Clearmatics, ConsenSys, Digital Asset, EY, IBM, ING, Intel, J.P. Morgan, Komgo, Microsoft, R3, and Web3 Labs.
The aim is to collaborate to define token types and terminology that can be used industry-wide thereby enabling “interchangeable currency-like properties” or potentially unique assets. It’s targeting non-technical classifications and education as well as technical definitions.
“Standardizing tokens to work anywhere could hold the key to one of the greatest economic opportunities in modern history,”said EEA Executive Director Ron Resnick. “Just like standards that led to the rise of e-commerce on the internet, applying standards to tokenization will enable the enterprise to use tokens to serve as, or provide access to, a set of goods, financial assets, securities, services, value or content through enterprise blockchain applications.”
Marley Gray, EEA board Member and principal architect, Microsoft, will be the Token Taxonomy Initiative Chair.
“As blockchain adoption accelerates, it’s important to work together to develop a common understanding of the token model, provide a common set of definitions, and assure interoperability through best practices and standards,” said Gray. “With a standardized global approach, the Token Taxonomy Initiative will form the foundation of critical standards in tokenization that could streamline the way entire industries and ecosystems work on a blockchain.”
To date, there have been numerous classifications of tokens, so agreed language is sorely needed. Most initiatives use different terminology but tend to group them as currencies, security tokens that represent an interest in a business and utility tokens. But utility tokens can be interchangeable or unique, such as a plane ticket.
There are multiple projects focused on the issue. They include the Global Digital Finance (GDF) initiative where ConsenSys and R3 are both on the board. Arguably the GDF leans more towards the cryptocurrency community rather than enterprise.
Last week in the U.S. a bill called the Token Taxonomy Act was put forward (again) in an attempt at regulatory certainty.
Along these lines, Jerry Cuomo, IBM VP Blockchain commented re TTI: “This will help establish a foundation not only for technology and business, but for the changing regulatory landscape as well.”
“The concept of digital tokens has been given to us by the blockchain world and it appears that in the coming years many different asset classes will be tokenized,” said John Whelan, chairman of the Board of the EEA, and head of Digital Investment Banking at Banco Santander. “As such, the Token Taxonomy Initiative will be key to ensuring that this next wave of financial innovation will start with cross-platform standards in mind.”