GSX, tZERO, +10 others Form Open-Source Consortium Focused on Security Token Interoperability and Compliance
Business, Technology

GSX, tZERO, +10 others Form Open-Source Consortium Focused on Security Token Interoperability and Compliance

The Millbrook Accord was recently established by a collective of 12 blockchain industry leaders. The group— which will be governed by the Blockchain Token Association (BAT)— is set to provide open source collaboration to achieve solutions regarding interoperability and regulatory compliance for security tokens.


Security Token Consortium ‘The Millbrook Accord’ Explained

Industry leaders in the Distributed Ledger Technology (DLT) sector have formed an association to collectively tackle the remaining obstacles for security tokens: interoperability and regulatory compliance.

The Millbrook Accord was formed at the Blockchain South Leadership Summit 2018 in New Zealand. The group includes tZERO, HyperLink Capital, Gibraltar Stock Exchange (GSX) Group, SharesPost, Techemy, Global Advisors, ERCDEX, NEM, Alchemist Ventures, Bankorus, Blockchain Labs, and AnyPay.

The consortium has established the Verified Token Framework (VTF) which aims to provide collaborative, open-source industry guidelines for security token interoperability. It will also work to facilitate streamlined regulatory compliance processes. These will include identity and investor status verification, adherence to multiple regulatory jurisdictions, and compliance among all parties involved— exchanges, platforms, and token holders.

The VTF codebase is entirely open-source, as the Millbrook Accord hopes it will become the leading codebase and general reference document for the emerging security token ecosystem.

Saum Noursalehi, tZERO CEO, described the need for such solutions in the security token industry.

“In order for the security token movement to grow, companies need to agree on an unbiased standard. The Verified Token Framework is a step toward ensuring that digital assets are interoperable and that the unique challenges presented by security tokens are addressed.”

How Interoperability is Needed in the Security Token Industry

Security tokens involve the tokenization of real-world financial securities, such as real estate, investment funds, equity, or even ownership of fine art. Given the existing securities industry estimated to be worth around $500 trillion USD, some have predicted the security token market to surpass the entire cryptocurrency market cap.

In order to reach such a level of implementation, interoperability will likely be key. A review of history, says BTA Chairman Jeff Pulver, shows us just that.

“In the Voice over Internet Protocol (VoIP) 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. 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.”

Some enterprises have already focused on interoperability. Securrency, for example, has established the world’s first multi-ledger security token protocol. Further, enterprises in Singapore have developed blockchain agnostic prototypes to shorten settlement cycles.

Yet the founders of the Millbrook Accord believe industry-wide collaboration will be needed to ensure the successful future of security tokens. Further details of such collaboration were discussed by Techemy Founder and CEO Fran Strajnar:

“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. 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.”

What do you think of the Millbrook Accord? Will the collaborative effort actualize the bright future of the security token industry? Let us know what you think in the comments below.


Image courtesy of the Verified Token Framework (VTF).

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December 7, 2018

About Author

GaryStevens Gary Stevens is a full time developer based in Canada. He's an early bitcoin investor and loves everything open source. Gary believes in a decentralized future and has worked with a number of corporate clients helping them understand blockchain technology and innovation.