Opinion by: Axel Schorn and Dr. Duc au
Traditional stocks, bonds and commodity markets have long benefited from the well -established standards governing the flow of information and data. These standards are subject to seamless functioning of trading, regulating and regulatory compliance, ensuring that all participants can rely on the same consistent frameworks.
As the financial industry moves Decentralized Finance (DEFI) In the introduction of digital assets, such as crypto assets and tokenized securities, the lack of such standards presents A growing challenge.
While digital assets promise potential changes, Integration with greater financial ecosystems.
Independent platforms such as CoinMarketCap or Coingecko provide information on various tokens, but this data has changed dramatically about market capitalization, total supply and other relevant reference data. Many global initiatives through private foundations and associations are working toward standardization.
Traditional frameworks as a guide
Just as the standard financial data has been instrumental in developing confidence and facilitation of growth, digital assets need their global standards. According to studies, the standards develop a general economic benefit estimated at 17 billion euros a year only in Germany.
For traditional ownership, a clear hierarchy of the International Organization for Standardization (ISO) exists to unlucky to categorize and identify each property. The International Securities Identification Number (NIN) is the global standard for unique recognition of all types of financial instruments, including equality, debt, debt, derivatives and index. The Certification of Financial Instruments (CFI) is the international system that is international for the classification of financial instruments. This is defined when a financial or reference instrument is issued and remains unchanged. The financial instrument of the short name (FISN) outlines a standard approach to short names and descriptions for financial instruments. Unlike Nin and CFI, FISN is not intended to be given a machine but to provide a brief format for basic security information for human use.
The National Numbering Agencies (NNA), which is responsible for collecting registration data such as providers, instrument types, terms and trading conditions, assign Sin, CFI and FISN. The Association of National Numbering Agencies maintains identities and data in a global database. For countless countries, four global replacement agencies have assigned the identity to those countries.
Recently: Definition requires a more cohesive narrative for mass adoption
The deals are allocated to financial instruments regardless of the technology used for the creation of their instruments, both in the form of paper and electronic form, thus along with tokenized instruments such as crypto security security according to the German Electronic Securities Act. For tokens with a apparent geographic reference, such as provided a security token that lives in Germany, the responsible NNA will allocate the surname. About tokens for referral instruments without a apparent geography reference – e.g.Btc), where the country of the giver is not determined – a “XT” prefix is allocated from Etrading software.
This will help to identify the instrument at the token level. The more exemplary data fields at the token level are the type of token, hash function and generation mechanism. Focused on instrument level, additional data elements such as token blockchain are required.
For this purpose, the digital token identifier foundation, responsible for the allocation of this new identifier, provides the so-called digital token identifier-eg DTI, ISO 24165.
The main thesis about the standardization of digital assets
Crypto identities can be mandatory. Similar to traditional possessions that use systems such as essentials, digital assets will adopt unique identities for cryptocurrencies and tokenized securities. These identities will facilitate monitoring, trading and reporting throughout the exchange and providers, which enables the seamless integration into legacy financial systems.
Data standards will enhance transparency and compliance: with increasing regulatory evaluation, standardized data formats will appear for compliance and risk management.
Global coordination will bring interoperability: the standardization of digital assets relies on global cooperation with regulation bodies and financial institutions. International organizations will be performed with securities in creation Frameworks This ensures interoperability in the constituents and reduces market destruction and, thus, inconsistencies in handling information.
Preliminary steps were taken toward the unambiguous recognition of digital assets with generally accepted ISO identifiers. Combined with a regulation throughout the European Union such as regulation in Crypto-Assets markets (MICA)The industry places a foundation for more significant adoption.
It remains to be seen how investors and the digital assets player are further emerging toward more criteria and what may appear in road barriers.
Opinion by: Axel Schorn and Dr. Duc au
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
