Brian Quintenz, a Republican commissioner of the CFTC, understands that the blockchain industry is full of hype and still possesses the potential to radically alter market structures.
This past week, at the Eurofi High Level Seminar in Sofia, Bulgaria, Commodity Futures Trading Commission (CFTC) commissioner Brian Quintenz shared[1] his views on the "tokenization revolution" and the evolving US regulatory framework for cryptocurrencies. "I believe it is important to separate the idea of cryptocurrencies, whose main purpose is only to serve as a medium of exchange or a store of value, from the proliferation of 'tokens' generally," he declared.
Note: For our purposes, it's best to understand tokenization as the blockchain-based representation of goods or services.
Quintenz said that tokenization can be used:
- as a "marketing ploy,"
- for potential efficiency improvements in tracking asset ownership, or
- to create secondary markets for intangible goods and services.
In simpler terms, the first category is purely about capitalizing on the "speculative mania surrounding all things 'token.'" To some, blockchain technology is the flavor of the day, a chance to cash in or gain traction with the latest buzzword. Take, for example, Oscar Mayer's new Bacoin[2], which presents itself as a cryptocurrency but is essentially a digital coupon for bacon. Each Bacoin grows in value depending on how many times it is shared on social media but it can only be redeemed for Oscar Mayer brand bacon, and it can't be cryptographically mined. The marketing campaign is cutesy, but it doesn't drive our society forward.
The second category, Quintenz explained, is about using tokens to "enable and realize the efficiency of the blockchain construct in assigning and tracking ownership." He referred to this as the "back office tokenization revolution," and predicted that this "will continue to have
