The Enterprise Ethereum Alliance (EEA), an Ethereum member driven consortium, has announced the launch of a blockchain-neutral Token Taxonomy Initiative which includes, among many high profile partners, the Wall Street financial institution J.P. Morgan Chase.
According to the press release published on April 17, the EEA’s Token Taxonomy Initiative intends to drive enterprise adoption by defining tokens in non-technical, cross-industry terms. As cryptocurrency and blockchain grows, varied token adoption is beginning to spread across a number of industries. EEA and their proposed Token Taxonomy is one initiative that seeks to bring some standardization to the space, regardless of use case.
As stated in the press release, the initiative will address the need to universally define tokens and how their implementation can occur, interchangeably, across platforms,
“While some form of tokens and tokenization have existed throughout time, blockchain-derived tokens have the potential to transform business models for goods and services offered by distributed or decentralized applications – even if they are built on top of different blockchains. 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.”
With the rise of cryptocurrency from its industry beginning in Bitcoin, to the thousands of coin projects that now fill the space, the variety of tokens has created a conundrum for classifying and sorting purposes. The EEA believes that their Taxonomy Initiative will ease the burden of defining coin projects based off aset of standardizations. Despite previous attempts and existing models of coin taxonomy, the press release reports that the industry is currently “lacking a venue for all participants to work together.”
EEA, in particular, is targeting interoperability with its new system–an industry buzzword that was most recently highlighted by Cardano Founder Charles Hoskinson as crucial to cryptocurrency growth. As more tokens come online, including those proposed by J.P. Morgan Chase and Facebook, the need for communication and industry standardization will become more prevalent. As EEA Executive Director Ron Resnick put it, standardizing tokenization will further the potential for adoption,
“Standardizing tokens to work anywhere could hold the key to one of the greatest economic opportunities in modern history. 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.”
EEA’s Taxonomy Initiative includes a number of high-profile institutions, such as J.P. Morgan Chase, Santander Bank and the global consulting firm Accenture. ConsenSys, Intel, Microsoft and IBM are also reported to be included in the initiative, as the taxonomy further shows its appeal to a broad variety of industries. As cryptocurrency adoption continues to grow, and the number of coin projects turns exponential, taxonomy could be one important way for simplifying the classification of new and existing tokens.