The Enterprise Ethereum Alliance (EEA) announced the formation of the blockchain-neutral Token Taxonomy Initiative (TTI), which addresses the need to universally define tokens to better understand how their use and implementation can occur interchangeably across all token-enabled blockchain platforms. The purpose of this initiative is to clearly define a token in non-technical and cross-industry terms using real-world, everyday analogies so that anyone can understand them.
On a blockchain, tokens enable users to trade assets – like cash and securities – without using native blockchain currency. Today, developers are required to navigate multiple token standards and write code for every conceivable blockchain platform to ensure a single use case interoperates across all blockchain platforms. To scale tokenization worldwide, a digital security token on one blockchain network will need to follow a similar standard as a cash leg token on another network, which, in turn, should follow a similar standard as a collateral management token implemented on yet another network, for example.
The group’s mission will be to develop a clear definition and scope of the token concept, including use cases, taxonomy and terminology, and a specification. Marley Gray, EEA board Member and principal architect, Microsoft, will be the Token Taxonomy Initiative Chair. Members of the initiative include Accenture, Banco Santander, Blockchain Research Institute, Clearmatics, ConsenSys, Digital Asset, EY, IBM, ING, Intel, J.P. Morgan, Komgo, Microsoft, R3, and Web3 Labs, among others.
The TTI’s work will be independent of the ongoing EEA standards work, which enables the EEA’s global member base to work together to produce informational specifications for use in the EEA’s standards-based testing and certification process.
“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. 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,” said John Whelan, chairman of the Board of the EEA, and head of Digital Investment Banking at Banco Santander, in a statement.
“J.P. Morgan is encouraged by the formation of the Token Taxonomy Initiative, given the developments with Quorum and other blockchain initiatives at the firm. With this significant step, the industry leaders — from the world’s largest companies and innovative startups — are coming together to define tokenization in ways designed to address the needs of the global enterprise community,” said Oli Harris, a founding EEA member and head of Quorum at J.P. Morgan, in a statement.