March 29, 2024

European researchers did not find the difference between stock tokens and instrumental tokens

European researchers conducted a comparative analysis of instrumental tokens and equity tokens, in whichas a result, revealed the absence of fundamental differences between them.

Oxford Law School BlogUniversity article appeared on the regulation of cryptocurrencies, compiled by professors of financial sciences and business law Dmitry Boreyko, Paolo Giudici (Paolo Giudici) and Guido Ferrarini (Guido Ferrarini). Scientists have dedicated research to the differences between utilitarian tokens and stock tokens, as well as to two financing models: initial token placement (ICO) and primary exchange offering (IEO).

In accordance with the provisions of the AmericanRegulators, the token has the characteristics of securities, especially when it comes to an investment agreement, when the purchase of digital assets is considered as investment in an enterprise from which investors expect to make a profit. A utility token, in contrast, is used only as payment for products or services provided by the issuer of that token.

However, according to Boreyko, Giudichi and Ferrarini,there are no clear differences between these two types of tokens. They substantiate their position by the fact that in the event of a large-scale development of the ecosystem, utilitarian tokens can be converted into bitcoins, ethers or other cryptocurrencies, and even exchanged for ordinary money. Utility tokens are a means of payment, have practical value within an ecosystem or a specific platform, and also have an investment component as a traded asset. Therefore, from a regulatory perspective, the difference between cryptocurrencies, financial assets, and the consumption of goods and services becomes blurred.

Regarding ICO and IEO, in both casesresearchers note a high volume of trading operations. According to them, investors consider the purchase of tokens through ICOs and IEOs as investments in liquid assets in order to make a profit. Cryptocurrency investors face the same financial risks as in the traditional securities market, because utilitarian tokens and stock tokens have “all the characteristics of an instrument used in the stock market”. Therefore, these two types of tokens should be regulated as securities, regardless of their practical value.

Recall that according to a survey conducted inlast month, The Block analysts, the main obstacle to the development of the cryptocurrency industry in the United States is precisely regulatory uncertainty. The other day, US presidential candidate Andrew Yang called for clear rules and regulations regarding cryptocurrency regulation.

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