Crypto industry giants agree on security token standards roadmap
The groups involved in the Millbrook Accord aim to have agreeable standards by this time next year.
A number of crypto industry giants have put their names down in support of a new framework for unified security token standards. The lack of standardisation is a major problem in the industry, and so far developments in the space have largely oriented around several different early movers trying to develop quickly enough to enshrine their own standards into wide usage.
The Verified Token Framework (VTF) is the same on one level as a new standard aiming to gain traction. It's quite different on another level in that it's an adaptable roadmap aimed at discovering a favourable and widely-accepted security token standard by this time next year.
The level of support it's gaining from a range of industry giants, all of whom are in a position to actively use and promote the established standards, is also different.
VTF has signed up some big names, including Overstock and tZERO, the NEM foundation, Gibraltar Stock Exchange, SharesPost, Techemy, Bankorus, HyperLink Capital and more, in an agreement dubbed the Millbrook Accord. But they're not signing on to any specific standards yet. Rather, they're supporting the discovery roadmap that should lead to useful and high quality standards within a reasonable time frame.
VTF illustrates the road ahead as follows:
The tail end of this year is focused on establishing nomenclature and industry needs, ahead of a series of "bake-offs" throughout 2019 to help develop and hone the final product into something that works for everyone – and works well.
This kind of bake-off system has proven its worth before by accelerating the adoption and standardisation of VOIP protocols, explains Jeff Pulver, chairman of the Blockchain Token Association.
"In the Voice over Internet Protocol era, we invited industry leaders to bring their production-ready code to quarterly bake-offs, where developers sought to make their code interoperable. The result was a free and open source set of standards, which ultimately led to interoperability of services," he said. "We believe a similar collaborative approach to technological advancement will assist in the acceleration of blockchain adoption and the maturation of the global security tokens ecosystem."
In this case, the Millbrook Accord aims to create a practical system for verifying investor identities, navigating jurisdictions and ensuring compliance among token holders, exchanges and platforms.
"In order for the security token movement to grow, companies need to agree on an unbiased standard," agrees tZERO CEO Saum Noursalehi.
And with the blockchain and security token space developing so quickly, the best time to implement effective and mutually-agreeable standards is probably now, suggests Fran Strajnar, CEO and Founder of Techemy.
"The members of the Millbrook Accord and the BTA have come together due to our shared belief that the security token industry is set to experience an interoperability crisis," he explained. "Tokens issued by various groups will be incompatible between blockchains, within market participants, including the exchanges that will list them, as well as the custodians and broker dealers who will handle them. The Millbrook Accord is an effort to create an interoperable framework for security tokens, which can be adopted on any smart-contract enabled blockchain and in any country."