First round-table session of 2Tokens project aligns efforts towards tokenisation
On November 6, 2019, the 2Tokens project organised the first round table session, at De Nieuwe Littéraire Sociëteit De Witte with approximately 60 attendees. There were lively discussions at the different tables and the participants enjoyed the in-depth knowledge that was shared across the different discussion slots.
The session was split into three phases, with each table focusing on a separate theme. The first phase focused on the Why we need tokenisation. The second phase was about What we need to achieve tokenisation and in the third phase, the focus was on How to move ahead with Tokenisation.
Why we need tokenisation
Although the six tables each looked at tokenisation from a different perspective, the reasons why we need tokenisation were very much aligned:
New Financing Models
- Tokens allow companies to obtain funding in new, innovative ways, that are often cheaper, more effective and faster.
- Tokenisation lowers the barriers of entry for raising capital.
Interchangeability, liquidity and programmability
- Tokens are programmable, and they offer new opportunities for companies to be more flexible with regard to ownership, voting rights, dividends and financing. It becomes possible to embed the rules of shareholders and corporates into the tokens.
- Tokens will also have a profound effect on liquidity in the world’s economy as tokens enable fractional ownership. This enables small investors anywhere in the world to invest in anything, starting from a few cents.
Transparency, Security and Compliance
- Tokens can make financial transactions cheaper, faster, more secure and it offers more transparency to understand transactions across stakeholders.
- Compliance can be enforced automatically since the rules of the game can be embedded in the code.
What Do We Need to Do to Achieve Tokenisation
The next round in the discussions was to understand what The Netherlands needs to do to achieve tokenisation. What are the requirements for the Dutch ecosystem in order to benefit from tokenisation?
Clear Definitions and Standards
Above all, we need standards. Standards in regulations (not only The Netherlands but also across Europe), technology and audits. To achieve this, The Netherlands cannot act alone but should aim to achieve change on a European level.
Education and Talent
The token ecosystem still needs to be developed and there is a lot of misunderstanding to tokenisation. Therefore, we need education of all stakeholders and we need to grow the pool of talent in The Netherlands.
Tokenisation requires first movers. First movers in the investment landscape as well as first movers in the startup scene. The government can play a role here by developing favourable regulation for investors. Those investors who do want to invest need to see the secondary value that can be achieved with tokenisation.
Self-Sovereign Identity as an Enabler for Decentralisation
Self-sovereign identity is becoming a key enabler for the decentralised ecosystem. It gives back control to the user and gives power to the people. Regulation is required to help citizens adapt to the new digital reality that is emerging. Standard protocols and a well-developed infrastructure will be important for self-sovereign identities.
How to Move Forward with Tokenisation
The right infrastructure is essential to move forward with tokenisation. The third session of the day was focused on the How and what we require to become successful with tokenisation in The Netherlands.
Sandbox, sandbox, sandbox
All tables agreed that to move forward, we need a sandbox, where organisations, regulators and governments can experiment with the new digital reality of tokens. The Dutch Financial Authority (AFM) has a sandbox for financial innovation, but it is very difficult for organisations to take part in it. If The Netherlands develops a flexible and inclusive sandbox, it can become an important differentiator in the token ecosystem. In fact, it can make The Hague a digital hub when it comes to tokenisation.
Lobbying through Education
- Organisations such as the 2Tokens project should lobby the government to make clear what The Netherlands will miss if we do not move ahead with tokenisation.
- Education can be achieved by developing e-books, (online) courses, have 2Token ambassadors, organise events and ensure close collaboration on various levels of the government.
Collaboration and Clear Use Cases
Apart from raising awareness and explaining the benefits of tokenisation, the best approach is to demonstrate the benefits of tokenisation. Several case studies, where there is a close collaboration between startup, government, regulators and the financial industry will help to understand the impact of tokenisation and see the benefits of it.