Interview with the experts at Chamber of Digital Commerce,
Initially Published by ConsenSys Media: Trends in Tokenization with the EEA and Chamber of Digital Commerce
The Chamber of Digital Commerce, the world’s largest trade association representing the blockchain industry, alongside the Enterprise Ethereum Alliance (EEA), a collaborative cross-industry effort created to advance enterprise blockchain technology, recently announced a new partnership to strengthen industry advocacy and education efforts around tokenization.
The Chamber of Digital Commerce will become an EEA Associate–Collaborative Member, and the EEA will become a strategic partner of the Chamber of Digital Commerce. The partnership will enable staff from both organizations to participate in token initiatives led by both organizations:
The EEA’s Token Taxonomy Initiative (TTI) is a separate and blockchain-neutral initiative hosted by the EEA to define and understand token taxonomy. Led by TTI Chair Marley Gray, Microsoft Principal Architect and EEA board member, the TTI is open to all EEA members and includes high-profile participants including Accenture, Adhara, Banco Santander, Clearmatics, ConsenSys, Digital Asset, EY, Hedera Hashgraph, IBM, Intel, ioBuilders, Itau, J.P. Morgan, Komgo, Microsoft, R3, Web3 Labs, among others. The TTI recently released its first framework, which includes business-ready token definitions and specifications, ‘recipes,’ based on real use cases, such as Digital Asset’s smart contract tokenization and Microsoft’s Azure Blockchain Tokens, and can be viewed here: Token Taxonomy Framework V 1.0 and draft specifications.
The Chamber of Digital Commerce’s Token Alliance is an initiative with more than 400 global participants, including blockchain and token experts, technologists, economists, former regulators, practitioners and law firms. The Token Alliance is co-chaired by Dr. Jim Newsome, Founding Partner of Delta Strategy Group, and Former Chairman, Commodity Futures Trading Commission, along with Paul Atkins, CEO, Patomak Global Partners, and Former Commissioner, U.S. Securities and Exchange Commission. The group released “Understanding Digital Tokens,” a series of reports that delves into the overall regulatory and market landscape of the token ecosystem.
The strategic partnership between the two organizations will focus on promoting token interoperability initiatives and regulatory considerations regarding digital assets and blockchain-based technologies.
To further examine the partnership and trends around tokenization, ConsenSys interviewed:
- Chamber of Digital Commerce Founder and President Perianne Boring
- EEA Director of Community Paul DiMarzio
- Token Taxonomy Initiative Chair Marley Gray, EEA Board Member, and Microsoft Principal Architect
What was your initial reasoning for founding the Chamber of Digital Commerce?
Perianne Boring: “In the early days, we believed that that government and regulation would be a barrier to the adoption of blockchain technology, and we were convinced that the industry should have dedicated and professional resources to work with the policymaking community to guide them as this technology begins to grow and flourish. We launched five and a half years ago and now we have over 220 members — so it turns out we were pretty correct in that assumption.” – Perianne Boring
What is the current landscape of digital asset and blockchain regulation in the U.S?
Perianne Boring: “In the U.S., the SEC views an expansive number of digital assets as falling within the securities laws framework using case law that was not designed for a digital, tokenized environment, thereby impeding innovation for fear of triggering these laws. If a digital asset is designated as a security, it will never be able to operate as a means of payment or be used for its intended use or design in a blockchain network. The CFTC has said that virtual currencies, including bitcoin and ether, are commodities. One side of the Treasury Department, FinCEN, is regulating digital assets like currencies, which means they are subject to AML regulation. The IRS, which also resides within the Treasury Department, has determined that they should be treated and taxed as property. When you have this type of regulatory ambiguity or uncertainty, it makes it very difficult to build and operate in the United States.”
“Stablecoins are not intended to be securities. They’re intended to be used as something that stable in value, whereas a security has an expectation of profit. But if [stablecoins] are now being defined as securities and thrown into securities laws, they will never be able to operate as a means of payment. That’s one example, but as we get into more advanced applications of blockchain technologies and digital tokens, these issues are just going to get more complicated over time.”
What is the importance of this partnership, and how will the Chamber of Digital Commerce and EEA collaborate moving forward?
Paul DiMarzio: “This partnership is a prime example of a tech standards-focused group (EEA) and regulatory- focused group (Chamber of Digital Commerce) focusing on different aspects of the technology that will push the industry forward. The key here is to make sure that within the whole token industry, anybody who is producing software around tokens does it in a way that meets the regulatory requirements and also does it in a way technically that provides interoperability.”
Perianne Boring: “If these two communities between the policy community and the technical communities are not coordinated, you’re going to end up with standards and regulations that are not interoperable. A formal partnership between the EEA and the Chamber of Digital Commerce is incredibly important. Recently, we’ve spent a lot of time working on how to define a stablecoin and that really does become a technical conversation, so a big part of this partnership is integrating the work so that we can have the cross-pollination of minds between the technical community and the regulatory community.”
The Chamber of Digital Commerce created the Token Alliance. What is the Token Alliance and how has it helped guide regulation and policy for digital assets?
Perianne Boring: “Two and a half years ago, we put together a working group within the Chamber of Digital Commerce called the Token Alliance, which set out to bring the blockchain industry together to issue a set of resources for policymakers and practitioners (firms in token space) to create guidelines. The TA issued the first and largest regulatory project around tokens this industry has seen with over 400 contributors providing guidelines for tokens that are considered securities and those that are not. It was a massive accomplishment to engage our members in this process.
Earlier this year, we increased the scope of the guidelines that we’ve now issued guidelines for consumer protection, cybersecurity, and AML. The Token Alliance has also developed several other public legal resources, including legal landscapes of different jurisdictions around the world.”
What misconceptions do you feel that people still have about tokenization and blockchain?
Marley Gray: “Broadly, there’s a misconception that tokenization is only about cryptocurrency, or that it’s only used for payments. We have to dispel those misconceptions and show that tokenization builds on business concepts that people already understand. So there’s a huge educational effort we have to undertake with a lot of different audiences and the first objective is to establish these common terms and definitions; otherwise you’re not going to get a consistent message.”
Perianne Boring: “There has been significant pushback from policymakers on blockchain technology because of the fear of cryptocurrencies. We will continue our education and advocacy work to ensure that policymakers understand the nuances between the different applications of blockchain technology and ensure that we have a legal framework that promotes the development and innovation of this technology.”
What are some trends in the tokenization that you are seeing either from the technical or regulatory perspective that will play out in 2020?
Marley Gray: “Stablecoins will be a major trend, because it’s and easier concept to understand, although it’s still really hard to define. We’re also looking into behaviors and properties that we use with tokens to make custody easier and more straightforward. Some of the early [adoption] we’re seeing is through the mixing of token behaviors across ecosystems and industries. Broadly, we look at everything as a supply chain and tokenization should be the lubrication of supply chains.”
Perianne Boring: “The Chamber of Digital Commerce is focusing on custody and developing a set of policy considerations for the custody of digital assets. It’s very clear that the regulatory conversations are evolving rapidly as bigger organizations enter the [blockchain] space as well. Many developed nations around the world are also developing strategies to build and develop blockchain technology within their own jurisdictions.”
Paul DiMarzio: “What’s really going to be interesting from an EEA and TTI perspective from my point of view is the final move to certification. It has always been a goal of the EEA to certify that applications adhere to our specs, and that will go live in 2020. Then, we will also be able to verify that a token has adhered to the specs and framework which will help increase interoperability from a technical point of view.”
Where is the U.S. in terms of global leadership for blockchain and digital asset regulation?
Perianne Boring: “If you look around the world, there are multiple countries that have advanced technology strategies and frameworks already in place, such as China, the European Union, Singapore, and many others. These nations are out in front of the United States in terms of creating legal environments that support the development of blockchain technology within their borders and have developed government strategies to utilize blockchains for the benefit of the public sectors. So, I would not consider the U.S. at the forefront today, but I do still think there’s time to catch up and for the U.S to preserve its technical leadership.”
Talking with these technical and regulatory industry experts makes a few themes abundantly clear:
- Alignment between the technical community and the policy community is vital for the continued success and prosperity of the blockchain industry. The EEA, TTI, and Chamber of Digital Commerce are deeply committed to educating and advocating for tokenization around the world.
- This industry is still incredible nascent and nuanced. 2020 will bring technological advancements for tokenization, digital asset custody, and more. There will be an equal and simultaneous push to define these technological advancements and ensure that government agencies and policymakers understand how to regulate these innovations effectively.
- This new strategic partnership is the newest in a movement of blockchain organizations cooperating to provide greater education and advocacy on behalf of this innovative technology.
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Legacy Records, The First Record Label Paying Music Artists In Crypto
From painters to digital artists to musicians, crypto continues to find integration across artistic mediums. Music continues to be a field that is ripe for revitalization, from a business standpoint. Accordingly, a number of different musicians have been releasing songs and albums as NFTs. Now, we have what’s being reported as the first official record label looking to get involved. The label looks to have artists join the ranks of other musicians getting involved in crypto.
In a press release issued to start this week, Legacy Records CEO Keishia McLeod said it came down to “either get involved or get left behind”. McLeod cited unique income stream opportunities for artists and closed by saying that “this is the future, not a trend”. McLeod has stated previously her intent to drive the label to be at the forefront of leveraging emerging technology in music.
There are two major buckets contributing to Legacy’s approach. The first is the most notable, as the label will become the first to offer artists an opportunity to receive their advance and royalty payments in the form of crypto. The second is to engage artists with NFTs, allowing fans to participate in auctions for unique content. The label’s specific plans around NFTs, and number of artists seeking to get paid in crypto, have not yet been disclosed.
As the crypto market grows, both artists and businesses are getting involved | Source: CRYPTOCAP-TOTAL on TradingView.com
Legacy Music’s Broader Business Growth
Las Vegas-based Legacy Records, not to be confused with Sony’s Legacy Recordings, will look to take advantage of the potential press buzz from the announcement. However, in tandem with the release, the label also announced a to-be-name music distributor who has also agreed to pay Legacy Records artists in bitcoin. The label also merged with New Jersey entertainment lawyer Navarro Gray’s ‘The Gray Firm’, to provide legal guidance around digital execution.
McLeod has noted previously that the label has desired being a mainstay in revolutionizing the way music artists do business. In a January interview with the LA Tribune, McLeod cited Netflix’s impact on the film industry, adding that “we haven’t seen that yet in this industry, but it’s coming. We’re going to be a large part of making that happen”.
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Music Artists Emerging Into Crypto
Legacy’s roster has the potential to join a growing list of music artists that continue to engage with crypto and NFTs. Last month, we wrote about long-time hip-hop artist Eminem partnering with Nifty Gateway to release original instrumental beats. Saturday Night Live promptly had a sketch explaining the digital collectibles parodying Eminem’s “Without Me”.
Other musicians engaging with NFTs include DJ Premier, 3LAU, The Weeknd, Linkin Park’s Mike Shinoda, and more.
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Featured image from Pixabay, Charts from TradingView.com
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XRP, Dogecoin, Chainlink Price Analysis: 17 May
Dogecoin required to counter bearish conditions before a jump above $0.569 resistance. Lastly, Chainlink needed to push above $45.5 to trigger a bullish comeback after a descending triangle breakdown.
Gains made over the last three days were impressive especially considering a bearish broader market, but sellers returned at $1.52-resistance. At press time, the cryptocurrency traded within the channel $1.52-$1.31 and reflected a degree of equilibrium between the buyers and sellers. For those hoping to make profits from a volatile XRP market, ADX’s movement dimmed expectations. Since mid-April, ADX has been on a steady decline and a period of consolidation seemed likely.
RSI hovered in the neutral territory around 50. A symmetrical triangle awaited a breakout to the upside and the Fibonacci tool presented a few target levels above the 200% extension level north of $3 (not shown).
On the daily timeframe, Dogecoin showed some sideways movement as bulls prepared for the next upswing. The channel between $0.523 and $0.373 was bolstered by the 20-SMA (blue) and formed a reliable buy zone should another dip occur.
As mentioned earlier, breaking above $0.569 resistance could trigger another rally in the DOGE market. Steering clear of $0.73-resistance would heighten the chances of DOGE touching $1. However, bearish conditions still presided and had to be countered first before any talks of an upswing. Awesome Oscillator noted bearish pressure after a series of red bars. MACD line remained below the Signal line but a bullish crossover could signal the onset of an uptrend.
Chainlink broke south from a descending triangle and a single candlewick dropped as low as $35.1- representing losses of 14% from the bottom trendline. Now below its 50-SMA (yellow) on the daily timeframe, bearish sentiment could lead to another sell-off towards $31 for LINK. On the other hand, some buying volume was noted on the 4-hour timeframe. A pickup in volumes and buying pressure could lead to a resurgence above $45.5 and this would likely push LINK beyond $50. A broader market recovery could act as a catalyst for such a price swing.
Meanwhile, RSI’s lower highs confirmed weakness after LINK formed a peak at $52.9. Even though Chaikin Money Flow dipped over the past couple of days, the index was still well above the half-line as capital inflows outmatched outflows.
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Speculation Tesla Dumped Its Bitcoin Holdings Denied By Musk
Elon Musk puts to bed rumors that Tesla has sold its remaining Bitcoin holdings. The comments came following his second attack on the leading cryptocurrency. This time, he called out the dominance of Chinese mining pools in a now-deleted tweet.
Bitcoin continued from its weekend slide with another drop today, currently down 5% at the time of writing. Given Musk’s apparent influence on markets, some insist he exercises more restraint on social media.
Tesla Has Not Dumped Its Bitcoin
Last week, the Tesla boss announced his firm would no longer accept Bitcoin as payment for its EVs. The reason he gave was a growing concern about the use of highly polluting coal by miners.
This coincided with a mass sell-off in which Bitcoin was hit particularly hard, closing the day down 13% to $49.5k.
Today, Musk tweeted that Bitcoin is highly centralized due to the small number of mining pools that control the network. He maintains that coal is a significant power source for miners, despite counter claims that the network runs mostly on renewable sources.
“A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound decentralized to you?”
In amongst the responses, @CryptoWhale suggested that Tesla will sell their Bitcoin holdings. Adding that, if that happened, Bitcoiners would only have themselves to blame. He was referring to the outpouring of hate directed at Musk.
Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings.
With the amount of hate @elonmusk is getting, I wouldn’t blame him…
— Mr. Whale (@CryptoWhale) May 16, 2021
Musk replied to the tweet with a response of “Indeed.” Some publications interpreted this as confirmation that Musk had already dumped his Bitcoin holdings.
But in a semblance of grace, Musk put the record straight by saying Tesla has not dumped its BTC holdings.
“To clarify speculation, Tesla has not sold any Bitcoin.”
However, with everything that has gone on since last week, is it only a matter of time before Tesla sells up?
Musk Should Be Aware Of His Influence In Moving Markets
Key crypto figures have rallied together in support of Bitcoin. Michael Saylor announced a $15 million BTC buy adding to MicroStrategy’s already substantial war chest, while Jack Dorsey tweeted a message of support in improving its green credentials.
However, @PlanB took a less nuanced approach by accused Musk of deliberating trying to destroy Bitcoin. The comment came in a poll asking his followers whether Musk has derailed Bitcoin from meeting expectations per the stock-to-flow model (S2F).
S2F refers to a predictive model based on scarcity over time. PlanB, who adapted it for Bitcoin use, puts the price of BTC at a minimum of $100,000 by year-end.
The Managing Partner and Co-founder of Nexo, Antoni Trenchev, said Musk should “wake up” to his influence in moving markets.
“He has to wake up to the reality that with his following, even single-worded tweets can move markets.”
But as some would suggest, he is already well aware of his clout in that regard.
Source: BTCUSD on TradingView.com
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