Milbrook Group, including NEM (XEM), GSX Group, tZero, Builds Security Token Framework
As legalized token sales look like the next logical step for crypto assets, a group of startups in the sector gathers to build a security token framework.
A consortium of leading blockchain projects announced the establishment of a common framework for the interoperability of security tokens. The agreement was formed at the Blockchain South Leadership Summit 2018 at the Millbrook Resort in Queenstown, New Zealand.
Companies working on the framework include SharesPost, Techemy, tZERO, Gibraltar Stock Exchange (GSX) Group, Global Advisors, ERCDEX, NEM, HyperLink Capital, Alchemist Ventures, Bankorus, Blockchain Labs, and AnyPay.
What will be known as the Milbrook Group is governed by the Blockchain Token Association, and will work to promote security token initiatives and the development of new crypto-based asset classes. To facilitate the adoption of tokens as part of investment tools, the Verified Token Framework was built, putting together code guidelines, interoperability tools and bringing in the community interested in security token investments.
The Milbrook Group believes security tokens can tap into a large-scale market for investments:
“The addressable market for security tokens is estimated to be around $500 trillion, with investments in the new asset class having already exceeded $500 million in 2018 alone.”
Security tokens are issued to represent traditional financial products, but with an added layer of technological security. While token technology is relatively easy to use, synchronizing token creation and sales with the registration of securities and proof of real-world assets has been more difficult. Hence the need for special exchanges and services.
“The primary purpose of the Millbrook Accord is to put forward practical solutions in order to facilitate a more seamless process for verifying identities, navigating jurisdictions, and ensuring compliance among token holders, exchanges, and platforms,” explained the partners.
Interoperability is a great concern for the upcoming array of security tokens. Several platforms allow for the creation of tokens, including Ethereum, NEM, NEO, QTUM, and others, but they are incompatible and may require exchanges and brokers to be able to handle the disparate technologies.
So far, jurisdictions are still in the decision stage regarding security token, but the basic requirement for the issuance of digital assets would follow the rules for registering and selling a security.