![]() ![]() Because tokens serve different purposes, they can be treated differently under the law and the law governing tokens and blockchains is not uniform across jurisdictions. “Digital tokens” are financial digital assets that refer to a unit of value, which can be owned, assigned (traded) or redeemed later. Digital assets are stored (carried) on digital appliances/storage devices that function like a filing cabinet (eg, computers, telecommunication devices and other modalities). Physical assets can be converted to digital assets when they are scanned and uploaded to a computer. In the broadest sense, the term “ digital asset” refers to anything that exists in a digital format, including photos, documents, audio, electronic records, websites, data related to individuals or accounts and cryptocurrencies. PART TWO: A Digital ‘Token’ for Their Thoughts - Digital Finance from a Regulatory Perspective In part one of our two-part series, we discuss what “digital assets” are, the blockchain infrastructure that supports them and the emerging products, applications, processes and organizations that use them, known as digital finance (DiFi). This facilitated the transfer of a broader range of units of value, digitized other types of tangible and intangible assets and enabled the satisfaction of counterparty obligations under smart contracts wholly unrelated to assets. As of June 2020, at least 45 central banks were reported to be researching payments technology and applications, known as Central Bank Digital Currencies (CBDC), and in October 2020 the Bank for International Settlements as well as seven central banks (including the Federal Reserve, the European Central Bank and the Bank of England) published a report laying out key requirements for CBDCįast following on the heels of cryptocurrency innovation, other forms of digital tokens were created, and the use of blockchain and “blockchain – like” technology was expanded in the public and private domains. ![]() Today, there are some 4,000 cryptocurrencies in the digital ecosystem with a total market cap reaching $2.2 trillion last month. Two months later, Satoshi created 50 Bitcoins with the very first transaction on a blockchain on January 3, 2009. “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party. Emerging from the ashes of the financial wildfire that spread across the world in 2008, the seeds of a new digital financial ecosystem germinated from an email sent by Satoshi Nakamoto to a group of techies that November: ![]()
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